‘Inter-operator transactions' crucial in unlocking full potential of digital banking

Bangladesh Bank is building a platform to provide inter-operator transactions, says central bank executive director

Analysts at a seminar have said Bangladesh must ensure security and introduce “inter-operator transactions” to tap into the potential of digital banking.

Speaking at “Digital Banking for All: Bridging Gap in Financial Inclusion” on Thursday, speakers said one reason digital banking has yet to reach the desired level in Bangladesh is a lack of public trust.

In his keynote, Sanjid Hossain, head of commercial partnerships of mobile operator Robi Axiata, said Bangladesh’s progress in the $20.43 billion global digital banking market remains minimal.

“One major factor is online fraud. About 40 percent of the population does not use banking services, and public trust has not grown yet,” he said.

He added that Bangladesh’s digital banking market could grow to $30 billion, but this requires building a safe online presence with a coordinated cyber security ecosystem. Otherwise, there are risks of major setbacks.

Digital banking in the form of mobile financial services has been growing since its introduction in 2011. Around 24 percent of banking transactions are now conducted digitally or online.

At the seminar, a Bangladesh Bank Executive Director Ezazul Islam noted that despite this growth, the use of cash is also rising.

“A significant portion of this money is being used in corruption. If digital banking expands, so much cash will not remain in people’s hands,” he said.

“To make online transactions safer, everyone’s cooperation is required. Bangladesh Bank is also building a platform for inter-operator transactions,” Ezazul added.

Raising the question of whether Bangladesh needs new digital banks, Arif Khan, vice chairman of Shanta Asset Management Ltd, said: “We already have 64 banks. Everyone offers digital services, yet new digital banks are being planned.”