Contents

Introduction: ................................................................................................................................................. 2

SWOT Matrix of Bkash: ................................................................................................................................. 4

Further details on SWOT: .............................................................................................................................. 5

Threats for bKash: ......................................................................................................................................... 5

Growth rate of Digital Banking in Southeast Asia: ........................................................................................ 7

Recommendation for Bkash: ........................................................................................................................ 8

References .................................................................................................................................................... 8

Appendix: ...................................................................................................................................................... 9

bKash customers at risk: ........................................................................................................................... 9

Mobile banking surges in Asia: ................................................................................................................. 9

Regulator blames bKash for money theft: .............................................................................................. 10

How “bkash” can successfully expand
worldwide as a mobile banking service?
Introduction:
Mobile banking is the 21st century idea through which the cash flow of numerous businesses around the
world has become more efficient. However, the security involved in mobile banking transactions is
slowly turning into a global concern that compromises our personal and financial data.

The concept of Mobile Banking or M-Banking emerged in 1999 by a European entity called PayBox,
which was financed by the Deutsche Bank (iTavisen, 2017). The technology was initially implemented via
SMS, but the creation of smartphone is now enabling users to transfer money via apps found in Apple
and Google Play Stores. The growth of innovation, especially through technology is allowing the existing
financial institutions to introduce advanced mobile banking facility online.

Bkash is currently monopolizing the mobile banking industry in Bangladesh that operates under the
Bangladesh Bank as a subsidiary of Brac Bank Limited. The inception of Bkash originally started as a joint
venture with Money Motion LLC in the United States of America (Banker). In April 2013, the
International Finance Corporation joined forces with the World Bank Group; moreover, Bill & Melinda
Gates Foundation became the other shareholder in the following year (SyedZain).

Needless to mention that apart from replacing paper cash completely, the mobile banking system also
has the potential to expand the reach of financial institutions. Developing nations like Bangladesh where
the majority of its citizens find conventional banking inconvenient due to various complexities
(TheDailyStar). Bkash has gained massive popularity in Bangladesh with 4.5m transactions per day by
almost 70% of its citizens (DhakaTribune).
 Mahbub, 2015

At present, the mobile banking industry has been thriving exponentially and their revenues are likely to
increase further with time. 100% of the banks have integrated mobile banking system for both Android
and iPhone users worldwide (The Financial Brand); moreover, these highly interactive mobile banking
apps can easily market their offers to potential clients (loan seekers). Acceptance of mobile banking
feature at this remarkable pace was talked about during the mid-1990s that talked about digital cash
that will replace paper cash (The Economist). Mobile banking is a disruptive technology that has the
potential to permanently replace paper money.

With growing competition it is essential for Bkash to adopt more innovative ideas for competing
internationally against forces like the Paytm of India and DBS Bank of Singapore. Unlike the state bank of
our country, the state banks of countries like India and Singapore are constantly facilitating their mobile
banking service providers (Fintechnews). The report will discuss on innovation and the likely strategies
for implementing it successfully by Bkash. Bangladesh will eventually turn into another cashless society.
SWOT Matrix of Bkash:

Strengths:

 First mover advantage and Weaknesses:

monopoly
 Unparalleled technological
support
 Only sustainable system that
can abide by the Federal
Reserve in Bangladesh
 Connected with the four largest
telecom service providers in
Bangladesh
 Limited authorized field agents
across Bangladesh (1600)
 User interface of Bkash is still
complex for users
 Lack of customer support
 No refund policy

Opportunities:
Threats:
 Large number of people that are
 Competition will become more
not familiar with conventional
intense for bkash if it does not
banking system.
adopt innovation
 Ecommerce system has been
 Customer support must be more
growing in Bangladesh since
informative to users
2013
 Public relations build stronger
 Has potential to serve as global
bond with customers.
logistics support
Further details on SWOT:
bKash entered the mobile banking industry following Dr. Younus’s Nobel Prize in Micro Finance that
brought a massive change in Digital Bangladesh. There were other players in the game; however,
bKash’s technology and strict monitoring of transactions kept the company alive. Furthermore, bKash is
integrated with all existing telecom service providers (Grameenphone, Airtel, Banglalink and Robi) in
order facilitate everyone.

Lack of server support but growing number of subscribers every day, existing users often experience
technical glitches during transactions. From personal experience, it takes long for agents to input details
of users that line also want to draw out cash or sending money. Therefore, bKash must design its own
automatic hardware support through which users can themselves input information without waiting.
Instead of paying the agents commissions, they could be paid a fix sum of money or share a portion of
expenses incurred by their outlets.
Bkash users complain about terrible customer support and it is highly crucial that bKash starts
improvising its public relations (PR) support for gaining more exposure. Most importantly, bKash does
not guarantee any extra support for wrong transactions (Parvez J). In case the money gets sent to a
wrong bKash wallet, which can get recovered only if the receiver agrees to resend that money back to
the sender.

The concept of Digital Bangladesh has been growing exponentially and will continue to thrive for
another 10 years. As a monopoly, bKash is the number one choice for the emerging ecommerce
Shadmart and Daraz for connecting it as a payment gateway system. Secondly, the majority of
Bangladesh’s citizens are illegible for conventional banking system. Using one cellular device and a SIM
card, anyone can register for bKash. Surprisingly, it does not require a smartphone only; however, it is
time for bKash to utilize the internet at the same time for overcoming server failure.

With investments come from various parts of the world, bKash can facilitate remittance worldwide.
Through a special edition Windows Smartphone, bKash can contribute its own application of money
transfer support worldwide. However, strict restriction imposed by the government of Bangladesh is the
ultimate challenge for bKash. Countries of southeastern Asia on a race for cashless society.

Threats for bKash:

The mobile banking technology is constantly upgrading as financial information needs to be protected
against hackers. bKash is not yet capable of securing KYC fully while operating online. KYC is like digital
gold for other businesses of different industries that pay remarkably large sums of money in exchange
for KYC. As a result, customer security must be protected from hackers that steal data for money.

bKash still continues using USSD code, which is simple text that easily read to find out. Technology,
along with security have improved; as a result, data is now stored in (#) format to prevent third parties
from deciphering sensitive information about users (Tareque). Before stepping inside the internet, it is
essential that bKash adopts the latest technology for protecting KYC at all costs.

There is almost zero possibility of refund in case of wrong transactional number. As a result, users are
constantly suffering if the provided receiving number is wrong. Customer support will simply contact the
receiver and instruct the user for resending the money. Unless the receiver agrees, there is no
guarantee for refund. With growing competition, it is probable for a new company with an advanced
software for solving that one problem bKash is yet to solve (Tareque). As competition grows new
entrants are likely to brand themselves with a new unique selling proposal in order to outrun the
existing competition.

Lastly, messenger applications such as Skype and Messenger are becoming popular due to the
expansion of the internet. As a result, bKash must conduct extensive R&D for an impenetrably secured
platform for channeling online transactions. A successful transaction between a buyer and a seller
signifies the success rate of a business. The flow of cash between a buyer and a seller is halfway to a
successful business, which bKash is facilitating. The remaining success rate depends entirely on a seller’s
capability for delivering its product to their right customers.
Growth rate of Digital Banking in Southeast Asia:

1Fintechnews Singapore, 2017

The estimated growth rate of mobile banking facility is 1.8bn by 2019, and the leading force will be led
by ASEAN (Fintechnews). DBS Bank, the largest bank in Singapore that has tied SGD 200mn in mobile
banking technology. DBS digibank has made banking tremendously simple with intuitively meaningful
interactions within its app. The app is now operating in India since 2015 by ICICI Bank. Following the
launch of DBS Banking system in India, the OCBC’s latest mobile fintech app became popular through
Apple Watch (Fintechnews).

The other bank named VPBank launched its own mobile banking app called Timo through which users
can apply for a bank account and sort personal finance with only a few steps (Fintechnews). To hike the
level of competition, a South Korean bank named Sunny Club introduced its own mobile banking app in
Vietnam, and the app is used as a platform for showing South Korean fashion, beauty and cultural
aspects among foreign users (Fintechnews).
Recommendation for Bkash:
The growth rate of bKash users has risen from 5mil to 25mil in two years, and due to its growth rate the
industry still remains a lucrative one for the financial institutions currently operating in Bangladesh
(Tareque). Mobile banking service relies entirely upon the right technology that assists in its growth
rate. Without the right technology, it is likely that bKash will soon be outcompeted in the mobile
banking sector it had initially dominated. The growing number of users for bKash eventually tarnish the
brand value of bKash, which will soon opt for newer methods of money transfer.

The security aspect must be considered by bKash for securing its customer information. As technology is
evolving, and the internet is playing a major role for inducing mobile banking service. Bkash must adopt
improved technology before initiating its operation online; as both the strategies are equally important
for the company to survive in the growing competition.

References

"The World's first WAP Bank is Norwegian". itavisen.no. 1999-09-24. Retrieved 2010-10-18.
The Financial Brand. (2014). 20 Top Mobile Banking Apps. The Financial Brand. Retrieved from
https://thefinancialbrand.com/40109/best-mobile-banking/
The Economist, ‘Digital money: the end of the cash era’, 15 February 2007, cover story
Weise, Elizabeth. (2017). Uber paid hackers $100,000 to hide year-old breach of 57 million users. USA
TODAY. Retrieved from https://www.usatoday.com/story/tech/2017/11/21/uber-kept-mum-year-hack-
info-57-million-riders-and-drivers/887002001/
Al-Mahmood, Syed Zain (24 June 2015). "Mobile Banking Provides Lifeline for Bangladeshis" –
via www.wsj.com.
"BKASH: TIP OF THE ICEBERG". The Daily Star. 2017-04-07. Retrieved 2017-07-29.
"Fortune lists bKash among 50 companies that are changing the world". Dhaka Tribune. 11
September 2017. Retrieved 20 September 2017.

Fintechnews Singapore. (2016). Mobile Banking Surges in Asia. Fintechnews Singapore.

Retrieved from http://fintechnews.sg/2311/mobilepayments/mobile-banking-surges-asia-dbs-
poised-become-regional-leader/
Parvez J.,Islam A., Wooderd J.,(April,2015), Mobile Financial Services in Bangladesh, A Survey of
Current Services, Regulations, and Usage in select USAID Projects.
Tareque, Moretaza. (2015). bKash Customers At Risk. The Independent Bangladesh. Retrieved
from http://www.theindependentbd.com/post/16546
Mahbub Ibrahim (2015). Mobile Banking, bKash, And Future Of Mobile Financial Services. Future
Startup. Retrieved from https://futurestartup.com/2015/06/24/mobile-banking-bkash-and-future-of-
mobile-financial-services/

Appendix:
bKash customers at risk:
“Fraudsters by impersonating the bKash short code may send masked SMS or make call to our
customers, tricking them to conduct transactions.” It seems bKash for now has no solution to tackle
this kind of fraud. The bKash statement only said, “Masked call/SMS has been an issue around the
telecommunications industry for long. The regulators are aware of it and are working on it to restrict
it.”
By using masked SMS, fraudsters are able to send anonymous SMS to a mobile phone, but the
recipient will see the name or number selected by the criminals instead of the original mobile
number. But bKash Ltd, in which the International Finance Corporation (IFC), a member of the
World Bank Group, has become an equity partner and Bill & Melinda Gates Foundation has invested,
is shy to let its customers know about the risks involved in transacting through its system. There has
been no noticeable effort on part of the company to find a solution to the problem. The company
statement only said, “We request our customers to remain aware of this kind of fraudulent activities.
We ask them to check their account balance before and after making any transaction to avoid these
kinds of fraudulent activities.” All cases of fake SMSs that The Independent checked carry bKash
numbers.

Mobile banking surges in Asia:

Mobile is already the largest banking channel by volume of transactions and its adoption by
new customers is entering an exceptionally rapid phase. A survey (pdf) by McKinsey and
Company found that across ASEAN (Singapore, Malaysia, Brunei, Cambodia, Indonesia, Laos,
Myanmar, Philippines, Thailand and Vietnam), the proportion of people using digital banking
doubled from 2011 to 2014, with Indonesia and Vietnam showing about sevenfold growth.
KPMG estimates that the number of mobile banking users will double to 1.8 billion by 2019 and
similarly, argues that Southeast Asia will be a main driver of this trend. The growing importance
of digital banking throughout Asia opens opportunities for incumbents and attackers alike.

Regulator blames bKash for money theft:

It appears that the crooks withdrew 157 SIMs from the telecom operator re-registering them in
their own names under the biometric system. Later, the wrongdoing was discovered thanks to
the biometric system, Bari said. “This shows that biometric verification is a tool for the law
enforcement agencies to track the real criminals,” he said at a press conference at BTRC office.

The bKash transactions also require personal identification numbers (PINs), which the criminals
obtained somehow, he added.

On Sunday, Chittagong police arrested two men on charges of stealing money from the bKash
accounts of some people by fraudulently collecting their Robi SIM cards registered with
biometric details.

The telecom regulator also asked Robi on Tuesday to explain how the fraudulent activities took
place through the use of its re-registered SIMs.