Mobile banking in Bangladesh

Don Sambandaraksa
Telcos often find it an uphill struggle when attempting mobile payment ecosystem as they forge closed partnerships and want the entire pie.
But a bank in Bangladesh is trying to prove that an open, carrier agnostic platform can be more successful in bringing financial services to the unbanked masses through the mobile phone.
Bangladesh is a country of 160 million people, only 14% of which are banked. Mobile penetration stands at 55% while mobile coverage is at 90% of the population, sowing the seeds for great potential. Dutch-Bangla Bank is taking full advantage of this convergence and was recently in Bangkok to discuss its business model along with partner SAP.
Sayem Ahmed, chairman of the executive committee of board of Dutch-Bangla Bank limited, explained how DBBL had worked to provide a mobile banking solution that was operator agnostic.
The system relies heavily on simple technologies that anyone with a phone can access. This means USSD and IVR. Running anything on insecure SMS was quite uncomfortable to any banker, he noted.
It is all about moving banking activities out into rural areas to bring around economic inclusion.
DBBL has a small branch network and a much larger network of agents, around 5,000 agents in shops in the streets and growing fast. It is these people who are the main points of interaction and earn the bulk of transaction fees, between 50 to 80%.
A simple deposit account can be opened with as little as 100 Taka or just over one US dollar.
At first telecom companies did not really want to cooperate as it was designed from the outset to be a mobile operator agnostic platform. However, over time operators have grown to like it as it reduces churn and besides, with just 14% and 55% banking and mobile penetration, “there’s a lot of growth left for the banks and a lot of growth left for the telcos,” he said.