Mobile Banking (Banking In Your Hand)-A Study On Dutch-Bangla Bank Limited, Satmosjid Road Branch.
Abbreviations ATM
: Automation Telex Machine.
CIB
: Credit Information Bureau.
EVA
: Economic Value Added.
IT
: Information Technology.
LRA
: Liquidity Ratio Analysis.
DBBL
: Dutch-Bangla Bank Limited.
SLR
: Statutory Liquidity Ratio.
SSI
: Small Scale Industries.
CSR
: Corporate Social Responsibility
NID
: National Identity
M-Banking
: Mobile Banking
E-Money
: Electronic Money
STD
: Short Term Deposit
IT
: Information Technology
LC
: Letter of Credit
DPS
: Deposit Plus Scheme
SWIFT
: Society for Worldwide Interbank Financial Telecommunication
SMS
: Short Message Service
GPRS
: General packet radio service
3G
: 3ed Generation
1.Executive Summary Importance of banking system in a country is increasing day by day. It is quite impossible for any country to develop in industrial and commercial sector without sound banking system in modern economic era. General Banking and Mobile Banking is one of the significant functions of the bank. It plays a vital role in overall economy of the country. Bank collects information from numerous sources relating to cost and revenue from Customer Management. Globalization of national economies has given a boost to international trade. The seller and the buyer in an international trading transaction must agree for a product or its quality, price etc. enter into a sales contract, spelling out precisely shipping and delivery details, terms of payment, required documentation and other related issues including dispute settlement procedure and legal framework available. 2. General Introduction Company Profile
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2.1 DBBL In Bangladesh: Banking system occupies an important place in a nation’s economy. Banking institution is indispensable in a modern society and it plays a vital role in the economic development of a country. Against the background of Liberation of economic policies in Bangladesh. DutchBangla Bank Ltd. Emerged as a new commercial bank to provide efficient banking services with a view to improving the socio-economic development of the country. The Bank provides a broad range of financial services to its customers and corporate clients. The Board of Directors consists of eminent personalities from the realm of commerce and industries of the country.
2.2 Historical Background: Dutch-Bangla Bank Limited is a second generation bank that was established in 1995 with a dream and a vision to become a pioneer banking institution of the country and contributes significantly to the national economy and society also. The banks journey began when it was incorporated as public limited company on July 04, 1995. The registrar of Joint Stock Companies and firms issued the Certificate of Commencement of business of the bank on the same date. The banks first branch was inaugurated at the busiest commercial hub of the country at 1, Dilkusha Commercial Area, Dhaka on June 03, 1996. In its arduous journey since, Dutch-Bangla Bank Limited has succeeded in realizing the dreams of those who established it. Today is one of the leading banks in the private sector, contributing significantly to the national economy and society also. The authorized capital of the Bank is today Tk. 4000.00 million. Its Paid-Up-Capital Tk. 2000.00 million and Reserve reached to Tk. 2524.72 million as on September31, 2010. The Dutch-Bangla Bank Limited was established by the leading business personalities and eminent industrialists of the country and abroad with stakes in various segments of the national economy. They established the Bank with a vision to bring efficient and professional banking service to the people and the business community of Bangladesh to help the national economy to grow. The incumbent chairman of the bank is Mr. Abedur Rashid Khan. The Bank’s operations are built upon unequivocal emphasis on effective corporate governance. The objective here is to create, promote and build long-term company value. The Banks first and highest priority is to provide effective services and maximum satisfaction to the customer. The ethos of harmony and co-operation is widely practiced in the bank. It believes that transparency in decision-making, monitoring mechanism and full disclosure to shareholders and regulatory authorities are essential aspects of bank’s corporate governance and that they create an intense pressure to rationalize bank’s services and search for new competitive advantages. It works ceaselessly within these parameters. A team of efficient professionals manages the bank. They create and generate an environment of trust and discipline that affects everybody in the bank to work together for achieving the objectives of the bank. A commitment to quality and excellence in service is the hallmark of their identity. Now, the Dutch-Bangla Bank Limited has become a synonym of quality banking products and services. It has an array of such products services tailored carefully to cater to the needs of all
segments of customer. It has been achieved much of its goals but it has been performing its activities to satisfy the country people as it did before well.
2.3 Objective of the Dutch Bangla Bank Limited: 2.3.1 Objective: To achieve positive Economic Value Added (EVA) each year. To be market leader in product innovation. To be one of the top three Financial Institution in Bangladesh in terms of cost efficiency. To be one of the top five Financial Institutions in Bangladesh in terms of market share in all significant market segments we serve. 2.3.2 Financial Objectives: To achieve a return on shareholders’ equity of 20% or more, on average. 2.3.3 Vision: Dutch-Bangla bank, as a first class pioneer banking financial institution, dreams of a better Bangladesh, where arts and letters, sports and athletics, music and entertainment, science and education, health and hygiene, clean and pollution free environment and above all a society based on morality and ethics make all our lives worth living. DBBL’s essence and ethos rest on a cosmos of creativity and the marvel –magic of a charmed life that abounds with spirit of life and adventures that contributes towards human development. 2.3.4 Mission: The Dutch-Bangla Bank engineers enterprises and creativity in the business and industry with a commitment to social responsibility. “Profits alone” does not hold a central focus in the banks operation; because “man does not live by bread & butter alone.” 2.3.5 Core values: The Dutch-Bangla Bank believes in its uncompromising commitment to fulfill its customer’s needs and satisfaction and to become their first choice in banking. Taking cue from its pool of esteemed clientele, the bank intends to pave the way for a new era for a banking that upholds and epitomizes its vaunted marques “Your trusted partner.” •
For the community strengthening the corporate values and taking environment and social risks and reward into account
2.4 Functions of DBBL: Dutch-Bangla Bank is one of the well known second generation private bank in Bangladesh. It has much better reputation, position in, and contribution to the economic sector of Bangladesh only for its better quality services and efficient team of performers. But it has not reached here
over night. It has some distinction features so that it is now very close of the peak of success. Those distinctive features are as stated: The Dutch-Bangla bank provides service with high degree of experienced & expert & use of modern technology. The bank has the biggest IT investment as a bank in the country. The institution creates long term relationship based on mutual trust. It responses to customers needs with speed & accuracy. It shares its values & beliefs with the clients. It provides products & services at competitive pricing. It ensures safely & security of customers valuables in trust with us. It introduces diversified & dynamic banking system. It targets every income level person for its banking service. The financial institution ensures higher level of transparency and accountability at all level of doing business for having efficient and effective business operation. It is the pioneer in maintaining Corporate Social Responsibility (CSR) as a banking financial institution all over the country. It holds the biggest ATM (Automated Teller Machine) network.
2.5 Corporate Strategy: •
Financing establishment of small units of industries and business and facilitate their growth
• • • •
Small Balance Sheet size composed of quality assets. Steady and sustainable growth. Investment in a cautious way. Adoption of new banking technology.
2.6 Organizational Goals: •
To employ funds for profitable purposes in various fields with special emphasis on small scale industries.
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To undertake project promotion on identify profitable areas of investment.
•
To search for newer avenues for investment and develop new products to suit such needs.
•
To establish linkage with other institutions which are engaged in financing micro enterprises.
•
To cooperate and collaborate with institutions entrusted with the responsibility of promoting
2.7 Different Operations of Dutch-Bangla Bank Limited:
As one of the leader of banking financial institutions of the country, the Dutch-Bangla Bank Limited has a wide variety of operations. It earns a lot of profit from those operations. The important thing is that the operations are little unique from the competitors. The different operations are as stated shortly here: 2.7.1 Deposit Collection: As a leading commercial bank of the country, Dutch-Bangla Bank Limited collects huge amount of idle money from the country people as deposit in against of paying interest depending upon the account features. It pays different percentage of interest for different maturity of fixed deposits. It disburses flat 4% interest for savings account. As usual, it does not pay any interest for the current account 2.7.2 Life line Disbursement: The bank has a wide variety of life line. The collected idle money is distributed among the applicants after judging their possibility. Life line can be for commercial, personal, business, home, car, health, children, education, marriage etc. It takes interest based on the maturity period of the life line. It earns almost 85% of its income from this operation 2.7.3. Foreign Trade: Foreign trade is another source of income for the bank. It is involved in both export and import business. It earns little from this sector but it contributes a lot to the national economy. Here, L/C (Letter of Credit) is the main source of income. 2.7.4 Foreign Currency Endorsement: Foreign currency endorsement is another source of income for the bank. It supplies money of the different recognized foreign currency like US Dollar, British Pound, Japanese Yean, Saudi Real etc to the immigrants after having their passports and visa. 2.7.5 Investment: Investment is an important operation of the bank. It can be of long and short term. It contributes significantly in the profit earning of the bank that goes to the stockholders ultimately. This investment improves the infrastructural, national development. 2.7.6. Social Responsibility: Social Responsibility is a very important operation for the bank. Though it is not a major operation from the view of profit earning but it has generated a very strong image of the bank among the national and international community also. Through this image, it has reached to the top of the success. The bank often arranges different types of social campaign like eye replacement, blood donation, free medical check up, various natural calamities, social awareness against of dowry system, early marriage, Scholarship of different level and other social problems .
2.8 Overall Standings of Dutch-Bangla Bank Limited: The Dutch-Bangla Bank Limited began its journey with only tk. 200 million as authorized capital. But its expansion of business has led it towards this position. Now it has tk. 4000 as authorized capital, tk. 2000 as paid up capital and a total capital of tk 6257.29 million and a capital surplus of tk, 902.15 million which is remarkable for the banking industry. In 2010, it had a net profit of tk. 1410.01 million after tax where the total operating income was 5134.67. It had a statutory reserve of tk. 2524.72 million. It earned total revenue of tk. 9887.59 million and had total expenses tk. 7054.26 million. It possessed a total asset of tk. 99,877.43 million of which earning asset is tk. 81,566.84 million which was outstanding. (As per diluted financial statements ended Sep 30, 2010)
At first the bank had begin its operation with only 3 branches and a very few officials. Those branches are Motijheel Local Office, Agrabad branch and Banani branch. But now it has a strong network of service consisting of 97 branches and over 2000 officials over the country. [ 2.9 Corporate Profile: : Corporate Profile Of Dutch Bangla Bank Ltd Name of the Bank Status Corporate Slogan Commencement of operation Authorized capital Paid up capital Industry Nature of Business Target customers Number of ATM Number of Branches Number of employees SWIFT
Dutch Bangla Bank Limited Private Limited company Your Trust Partner April 1995. Tk.4000 million. Tk.2000 million. Banking industry of Bangladesh Banking Business with different financial services/products. Individuals and corporate customers 1351 101 Around 3000 DBBL BD DH
2.10 Organizational Structure: Chairman Managing Director (MD) Additional managing Director (AMD) Deputy Managing Director (DMD) Senior Executive Vice President (SEVP) Executive vice president (EVP) Senior vice president (SVP) Vice President (VP) Senior Assistant Vice President (SAVP) Officer (General) AssistantAssistance Vice President (AVP) First Assistant Vice President (FAVP) First Vice President (FVP) Senior Executive Officer (SEO) Executive officer (EO) First Executive Officer (FEO)
Trainee Officer (cash)
Mobile Banking (Banking in your Hand)
�Mobile banking� is not simply another delivery channel but represents a fundamental shift in the paradigm of consumer banking.�
4.1 Introduction to Mobile Banking:
Internet Banking helped give the customer's anytime access to their banks. Customer's could check out their account details, get their bank statements, perform transactions like transferring money to other accounts and pay their bills sitting in the comfort of their homes and offices. However the biggest limitation of Internet banking is the requirement of a PC with an Internet connection, not a big obstacle if we look at the US and the European countries, but definitely a big barrier if we consider most of the developing countries of Asia like Bangladesh. Mobile banking addresses this fundamental limitation of Internet Banking, as it reduces the customer requirement to just a mobile phone. Mobile usage has seen an explosive growth in most of the Asian economies like Bangladesh. The main reason that Mobile Banking scores over Internet
Banking is that it enables 窶連nywhere Anytime Banking'. Customers don't need access to a computer terminal to access their bank accounts, now they can do so on-the-go while waiting for the bus to work, traveling or when they are waiting for their orders to come through in a restaurant. The scale at which Mobile banking has the potential to grow can be gauged by looking at the pace users are getting mobile in Bangladesh.The mobile subscriber base in Bangladesh hit 70 million in 2011. The explosion as most analysts say, is yet to come as Bangladesh has about one of the biggest untapped markets. We see that in Korea which is now witnessing the roll-out of some of the most advanced services like using mobile phones to pay bills in shops and restaurants.
4.2 Reason of Genesis of M-Banking: Introduction of new technologies Control costs, removal of cost duplication To increase online channel customers Personalize customer interactions Unparalleled convenience & proactive customer service
4.3 Mobile Banking A New Business Models For Banking: Sector: A wide spectrum of Mobile/branchless banking models is evolving. These models differ primarily on the question that who will establish the relationship (account opening, deposit taking, lending etc.) with the end customer, the Bank or the NonBank/Telecommunication Company (Telco). Models of branchless banking can be classified into three broad categories - Bank Focused, Bank-Led and Non Bank-Led. The bank-focused model emerges when a traditional bank uses non-traditional low cost delivery channels to provide banking services to its existing customers and new customers in rural area where commercial bank can not reach till now
4.4 Mobile Banking:
Mobile Banking is a Banking process without bank branch which provides financial services to un-banked communities efficiently and at affordable cost. To provide banking and financial services, such as cash-in, cash out, merchant payment, utility payment, salary disbursement, foreign remittance, government allowance disbursement, ATM money withdrawal through mobile technology devices, i.e. Mobile Phone, is called Mobile Banking. Mobile banking (m-banking) involves the use of a mobile phone or another mobile device to undertake financial transactions linked to a client’s account. M-banking is one of the newest approaches to the provision of financial services , made possible by the widespread adoption of mobile phones even in low income people. The roll out of mobile telephony has been rapid, and has extended access well beyond already connected customers in rural area. There is mounting evidence of positive social impact on poorer people and communities as a result. There are sound reasons for the hope that m-banking could have similar impact. A mobile network offers a high technology platform onto which other services can be often provided at very low cost to deliver an effective result. Mobile data channels are often under-used and therefore may be offered at low cost by the network operator. M-banking services which use channels such as text messaging/ SMS can be carried at a cost of less. The low cost of using existing infrastructure makes such channels more amenable to use by low income customers. M-banking is new in our country, and there has been limited donor support in this sector to date. This report considers the case for donors to support m-banking as a sector. Bangladesh Bank permitted 10 commercial bank to do such kind of mobile banking business that the rural people who have mobile but haven’t banking facilities, Service holders can get there salary by the mobile banking.
4.5 Objective of Mobile Banking:
Around 87% of the total population of Bangladesh is un-banked. To bring such a huge population into the banking channel, DBBL is implementing a system to launch mobile banking soon. The project is in its final stage now. With this facility any person having a mobile number will be able to use his number as a bank account. In this mobile account they will be able to do the following: ● Cash deposit to any Agent of DBBL ● Cash withdrawal from any Agent of DBBL ● Cash withdrawal from DBBL ATMs ● Funds transfer to another mobile account ● Utility bill payment, Tuition fee payment, Air time top-up. ● Receive remittance from home and abroad ● Salary disbursement ● Disbursement of Govt. allowances ● Merchant Payment ● Balance Inquiry
4.6 Benefits of Mobile Banking: By providing electronic access to money, it is possible to ultimately alleviate poverty, because of the following reasons. Real time on-line banking Available anytime, anywhere throughout the country It is convenient, affordable and secure It is much more effective in developing savings habits It will make access to banking and advanced payment transactions at affordable cost It is much safer, speedy and safeguard against fraudulent transaction.
4.7 Some other purpose of Mobile Banking:
While poor people have little money, they are active managers of what they have. Holding cash comes at high price to poor people because of the risk of crime in many poor People, but they often have few alternatives to cash based services.
In particular, appropriate financial services help poor people to access usefully large lump sums of money, which may either enable a pathway out of poverty through investment in income generating activities (such as micro enterprises) or asset creation (such as housing); or may reduce vulnerability to sudden shocks to cash flow, as a result for example of illness or climate conditions. In our country, poor people are forced to rely on informal financial services, which may be unsafe, or fringe formal financial products which may be expensive as well as unsafe. In other words, their exclusion from formal financial services has economic and social impacts which may exacerbate their poverty. The cost efficient provision of formal financial services (payments/ remittances, savings, credit or insurance) is predicated on customers having access at least to a basic transactional account, from which electronic transfers can be made as like purchase product and pay one another by M-banking and cash withdrawn as necessary. M-banking holds the prospect of offering a low cost, accessible transaction banking platform for currently unbaked and poorer customers. In addition, as mobile networks expand their coverage, they offer the opportunity of bringing payment and remittance services into that areas where banking services is unable able. However, not all m-banking products will be transformational in the sense of broadening access to financial services substantially at first or even at all. However, it is likely that even m-banking services which start targeted at existing banked customers may over time extend to un-banked groups.
4.8 Why Mobile Banking is Necessary: • In low income people, m-banking may enable to use such kind of Banking where Banking facilities can’t reach till now the cost and safety of using m-banking is comparatively low. • M-banking potentially brings new Customer where banking sector is running as like as dog for there product marketing; these may be stronger than retail banks and better placed to reach out to un-banked customers. • M-banking is still very new, whereas other forms of e-banking are quite well established; the potential to influence and adapted to the customer may be higher compare to former banking because a lot of people use mobile phone in our country
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4.9 Why DBBL chose Mobile Banking:
Rapid expansion of Mobile Phone Nation wide coverage. Enhanced Mobile Phone Services Failing cost of Technology Increasing competition in Commercial Banking Ability to offer low cost banking services Affordable and secure High level of Mobile phone literacy among client Existing of Mobile payment platform which is save and secure & recognized by Bangladesh Bank
4.10 Partner of Mobile Banking: Banglalink & citycel are two Leading mobile phone operator in Bangladesh. 152 outlets. It is reliable as telecom company that turns a mobile phone into an electronic wallet.
Where DBBL M-Banking is available?
4.11 where DBBL M-Banking is available? Customer can register at any authorized agent point of DBBL – at present these are the retailers of City cell & Banglalink throughout the country who can display ‘DBBL Agent Certificate’ and ‘DBBL Mobile Banking Banner’. Banking is there. Around 152 Banglalink and cetycel agent around the country and all the DBBL branch is the Mobile Banking place. A Mobile account holder can deposit money from DBBL permitted Banglalink and City cell agent and any branch of DBBL, They also can withdrew money from DBBL Banglalink and City cell agent and Branch. They also cash out from ATM. 4.11.1 Benefits of DBBL Mobile Banking By providing electronic access to money, it is possible to ultimately alleviate poverty, because of the following reasons. Real time on-line banking. Available anytime, anywhere throughout the country. It is convenient, affordable and secure. It is much more effective in developing savings habits. It will make access to banking and advanced payment transactions at affordable cost. It is much safer, speedy and safeguard against fraudulent transactions 4.11.2 What does DBBL Mobile banking offer? Customer Registration Cash-in (cash deposit) Cash-out (cash withdrawal) Merchant Payment Utility Payment Salary Disbursement Foreign Remittance Air-time Top-up Fund Transfer 4.11.2 How does it work? Customer fills up the KYC Form and submit to agent along with his photograph & National ID (NID). Agent checks the Application Form, photograph & NID. Agent goes to Customer Registration Menu in his/her mobile and insert customer’s mobile number. Customer receives a call and in reply, s/he gives a 4-digit PIN number of his/her choice (please remember your PIN). A Mobile Account is created in the DBBL system which is his/her mobile number + one check digit. Customer receives an SMS which contains his/her Mobile Account number (please remember your check digit).
According to the Law and Practice the Banker – Customer relation arises only from contract between the two. And opening of Mobile Account is the contract that establishes the relationship between a banker and a customer. So this section pays very important role in attracting customer and therefore be handled with extra care 4.11.3 Necessity A person who wants to open an account he/she should have some documents to open an account, these are1. 2 copies PP size photo of Applicant 2. Photocopy of National ID Card 3. 10 tk as account opening charge. 4.11.4 Mobile Account opening procedure in a flow chart Applicant fills up the relevant application form in the prescribed manner
He/ she is required to fill up the specimen signature
The authorized officer scrutinized the introduction and examine the documents submit
Depositing the cash
Account is opened
After registration of DBBL Mobile Banking DBBL cell center call customer for choosing the password. Customer chose four digit number what they like. The mobile banking number will be like mobile number with one cheque digit. It will be active within 1-2 working day. 4.11.5 Why PIN is required? PIN is required to be inputted during cash withdrawal from an Agent or DBBL ATM. PIN ensures security of your money and protect fraudulent transaction.
4.11.6 Why PIN is strictly confidential?
PIN is the key for transaction of Mobile Banking. Only correct match of PIN & Mobile Number can access the Mobile Account. PIN is needed to verify the A/C owner by the system. If a PIN is disclosed, respective account is at risk; therefore, PIN should be handled very carefully. 4.11.7 Why Check digit? Mobile number is public and known to many people. Without knowing your check digit, none will be able to deposit money at your account, thus it helps to keep your mobile account confidential. On the other hand, a check digit eliminates typing error, thus protects sending or depositing money to a wrong account. 4.11.8 Which Telco’s Mobile can be registered? Customer having any mobile from any Mobile Operator can be registered for DBBL Mobile Banking at any agent point of Banglalink and Citycell. All these Mobile Account holders will be able to deposit and withdraw money from the Agents. However the customers having mobile from operators other than Banglalink and Citycell will not be able to initiate many selfinitiated services like Balance checking, fund transfer, utility payment, Air-time top up, PIN Change etc. Customers having mobile from Banglalink and Citycell will be able to enjoy all the services – agent-initiated as well as self-initiated. 4.11.7 What type of Mobile set is required? Any type of mobile set can be used for DBBL mobile banking. 4.11.8 How much initial deposit is required? Customers can open a DBBL Mobile Account with an initial deposit of Taka 10/- (taka ten) only. 4.11.9 Can I deposit and withdraw money immediately after registration? You can deposit money immediately after registration. However, you can withdraw after your account is fully registered. Bank officer verifies the information on the registration form (KYC form) and authorizes the account for full registration. Normally 1-2 working days are required for full registration. After your account is fully registered, you will get an SMS notification.
4.11.10 How is DBBL Mobile Banking secured?
DBBL Mobile Banking is highly secured as it uses either USSD or SMS+IVR as its communication channel. In case of USSD, both the instructions and PIN are communicated using USSD while in case of SMS+IVR, instructions are sent via SMS and PIN via IVR (voice channel) both the USSD and IVR are secured for transmission of PIN Customer’s money is safe as none can withdraw his/her money without taking possession of Mobile set, PIN and Check digit together. None will be able to deposit unwanted money into a Mobile Banking Account without knowing the check digit (although the mobile number is publicly known). 4.11.11 Where to cash-out (cash withdrawal)? Customer can cash-out (withdraw) at any authorized agent of DBBL (at present Citycell & Banglalink agents), DBBL ATMs and DBBL Branch. 4.11.12Mobile A How does it work?
Customer asks the Agent for withdrawal of an amount from his/her mobile account Agent initiates the transaction from his/her mobile Agent gets prompt menu and in reply agent enters customer’s mobile account number (including check digit) and amount to withdraw DBBL system sends prompt menu to the customer’s mobile (or IVR Call): “You are going to withdraw Tk. XXXX from your mobile account with DBBL. If you want to continue, please enter your 4-digit PIN” Customer enters his/her PIN System debits customer’s account and send an SMS to the customer’s mobile Agent hands over money to the customer 4.11.13 Where to cash-in (cash deposit)? Customer can cash-in (deposit) at any authorized agent of DBBL (at present Citycell & Banglalink agents) or DBBL Branch. 4.11.14 How does it work? Customer hands over cash to the Agent Agent initiates the transaction from his/her mobile Agent gets prompt menu and in reply agent enters customer’s mobile account number (including check digit) and amount Agent enters his/her PIN System credits customer’s account for the same amount Agent issues a receipt to the customer System sends an SMS to the customer’s mobile For security reason, customer needs to check the sending number of SMS and the amount. SMS will be sent from 16216
4.11.15 What is transaction limit ?
There may be scarcity of cash at agent points. We want to serve as many customers as possible from each agent points. On the other hand, it is required to minimize fraudulent loss, if any. To arrest all the above, a transaction limit in terms of frequency and amount have been set in the system. Current limit for the customers are as under: Cash-in frequency per day = 5 times Cash-out frequency per day = 5 times Cash-in / cash-out amount per transaction = 5,000/Cash-in frequency per month = 20 times Cash-out frequency per month = 20 times 4.11.16 How to check your account balance? Customer initiates the transaction from his/her own mobile DBBL system sends prompt menu to the customer’s mobile (or IVR Call): “Please enter your 4-digit PIN to know your balance or press Cancel button to cancel the request” Customer enters his/her PIN System sends the balance into his/her mobile 4.11.17 How to change PIN?
Customer initiates the process from his/her own mobile. DBBL system sends prompt menu to the customer’s mobile (or IVR Call): “Please enter your existing 4-digitPIN to proceed or press Cancel button to cancel the request” Customer enters his/her existing PIN DBBL system asks for new 4-digit PIN
Customer enters his/her new PIN The PIN is changed 4.11.17 What is Salary/Allowance Disbursement?
It is a process by which Corporate Office can disburse the salary of their employees and Government can disburse different allowances like elderly allowance, freedom fighter allowance to the people within a few moment in a hassle free way. 4.11.18 How it works? Corporate Office/ Government will send the list of mobile account numbers (including check digit) and monthly salary/allowance to DBBL DBBL will credit all the individual accounts by debiting corporate account centrally by a batch process system The employee/beneficiary will get an SMS regarding the transaction The employee/beneficiary can go to any agent or DBBL ATM or DBBL Branch for withdrawal of money 4.11.19 Benefits of Corporate Office/Government? Time savings Cost savings No need of extra manpower Probability of error is very low Instant service is ensured 4.11.20 Benefits of employee/beneficiary? Instant credit to the account No hassle to collect salary/allowance No queue Money can be withdrawn from any agent or DBBL ATM or DBBL Branch 4.11.21 How foreign remittance can be sent to Mobile Account? Exchange houses at abroad receive remittance against beneficiary’s mobile account number Exchange houses send the mobile account number and the amount to DBBL
DBBL will centrally credit the amount against respective mobile account The beneficiary will get an SMS regarding such transaction. The beneficiary can go to any agent or DBBL ATM or DBBL Branch for withdrawal of money 4.11.22 Fees & Service Charges Registration Fee : Free Cash-in Charges : 1% of the transaction amount or Tk.5/-, whichever is higher Cash-out Charges : 2% of the transaction amount or Tk.10/-, whichever is higher. Merchant Payment : Free for customer Mobile Top-up : Free for customer Salary Disbursement : Free Allowance Disbursement : Free Remittance Disbursement : Free 4.11.23 Mobile Banking Services in DBBL Banks offering mobile access are mostly supporting all of the following Services 4.11.24 Account Information • Mini-statements and checking of account history •SMS Alerts on account • Registration fee, salary and remittance disbursement 4.11.25 Payments & Transfers • Domestic fund transfers • Micro-payment handling • Mobile recharging • Bill payment processing 4.11.26 Transaction • Fund Transfer • Bill Payment • Other financial services like 4.11.27 Enquiry Based • Credit/Debit Alerts. • Minimum Balance Alerts • Bill Payment Alerts • Account Balance Enquiry • Account Statement Enquiry • Cheque Status Enquiry. • Cheque Book Requests. • Recent Transaction History.
4.12 Advantages of Mobile Banking The biggest advantage that mobile banking offers to banks is that it drastically cuts down the costs of providing service to the customers. You can make transactions or pay bills anytime. It saves a lot of time. Mobile banking thorough cell phone is user friendly. The interface is also very simple. You just need to follow the instructions to make the transaction. It also saves the record of any transactions made. Cell phone banking is cost effective. DBBL provide this facility at a lower cost as compared to banking by self. Banking through mobile reduces the risk of fraud. You will get an SMS whenever there is an activity in your account. This includes deposits, cash withdrawals, funds transfer etc. You will get a notice as soon as any amount is deducted or deposited in your account. Banking through cell phone benefits the banks too. It cuts down on the cost of tele- banking and is more economical. Mobile banking through cell phone is very advantageous to the banks as it serves as a guide in order to help the banks improve their customer care services. Banks can be in touch with their clients with mobile banking. Banks can also promote and sell their products and services like credit cards, loans etc. to a specific group of customers. Various banking services like Account Balance Enquiry , Credit/Debit Alerts, Bill Payment Alerts, Transaction History, Fund Transfer Facilities, Minimum Balance Alerts etc. can be accessed from your mobile. You can transfer money instantly to another account in the same bank using mobile banking. Mobile banking has an edge over internet banking. In case of online banking, you must have an internet connection and a computer. This is a problem in developing countries. However, with mobile banking, connectivity is not a problem. You can find mobile connectivity in the remotest of places also where having an internet connection is a problem. Mobile banking is helping service providers increase revenues from the now static subscriber base. Service providers are increasingly using the complexity of their supported mobile banking services to attract new customers and retain old ones. A very effective way of improving customer service could be to inform customers better.
4.13 Limitation of Mobile Banking Uncertainties over the speed and nature of customer adoption: This is to be expected with any new offering, although the uncertainty is compounded by the relative lack of knowledge of the needs of un-banked people in many places, and the market potential. Consumer education may speed adoption; but more likely, adoption on scale will happen as it has happened with mobile phones: by forced to adapt their offerings as they encounter feedback in the market place. Therefore, it is necessary to have sufficient providers in the market who can remain in
the market long enough to ensure that to identify the elements of a successful model. Hence, support to providers may assist in overcoming this barrier. Generally available research into the patterns and needs of the un-banked target market may also help. Lack of interoperability with existing systems: Interoperability of different payment systems is primarily a question of market structure and regulation. It arises initially only in markets where there is an existing payment infrastructure with which new providers can inter-operate (and later on, once new infrastructure becomes the standard). Without interoperability, the fixed costs of deploying financial infrastructure may be much harder to recover, since usage per item of proprietary infrastructure will fall. Clearly, one solution may be to give regulators the power to require interoperability; however, it may be sufficient to encourage the identification of appropriate standard upfront. This could take place via support to regulators or industry bodies, where these exist. Regulatory barriers: Specific regulatory impediments vary by market; but in general, a lack of openness to new models of provision and a lack of policy certainty limit the potential of new models. Increasing openness and certainty may require support to regulators to outline high level policy, as well as to amend existing regulations or draft new ones where and when required. The case for donor support therefore rests on removing barriers such as these, thereby making it more likely that transformational models of m-banking will emerge at all, or at least, sooner; and that they will develop more rapidly than otherwise would be the case.
4.14 Challenges before Mobile Banking:
Reaching deeper into rural areas without costly investment in infrastructure. Reducing the costs of servicing. Interoperability Security risks from robbery & holdup. Scalability & reliability Personalization Customer education
Reduce cost of clients High transecting cost Lac of cash out late Cost of cash in and out is high compare to interest rate on bank deposit Marketing to convince more people Merchants and Shops to accept M-cash in payment for goods and services. Overcome initial security of customer money. Interoperability: There is a lack of common technology standards for mobile banking. Many protocols are being used for mobile banking. It would be a wise idea for the vendor to develop a mobile banking application that can connect multiple banks. It would require either the application to support multiple protocols or use of a common and widely acceptable set of protocols for data exchange. There are a large number of different mobile phone devices and it is a big challenge for banks to offer mobile banking solution on any type of device. Security Security of financial transaction, being executed from some remote location and transmission of financial information over the air, are the most complicated challenges that need to be addressed jointly by mobile application developers, wireless network service providers and the bank's IT department. The following aspects need to be addressed to offer a secure infrastructure for financial transaction over wireless network: * Physical security of the handheld device. If the bank is offering smart-card based security, the physical security of the device is more important. * Security of the thick-client application running on the device. In case the device is stolen, the hacker should require ID/Password to access the application. * Authentication of the device with service provider before initiating a transaction. This would ensure that unauthorized devices are not connected to perform financial transactions. * User ID / Password authentication of bank's customer. * Encryption of the data being transmitted over the air. * Encryption of the data that will be stored in device for later / off-line analysis by the customer. Scalability & Reliability Another challenge for the banks is to scale-up the mobile banking infrastructure to handle exponential growth of the customer base. With mobile banking, the customer may be sitting in any part of the world (a true anytime, anywhere banking) and hence banks need to ensure that the systems are up and running in a true 24 x 7 fashion. As customers will find mobile banking more and more useful, their expectations from the solution will increase. Banks unable to meet the performance and reliability expectations may lose customer confidence. Application Distribution Due to the nature of the connectivity between bank and its customers, it would be impractical to expect customers to regularly visit banks or connect to a web site for regular upgrade of their
mobile banking application. It will be expected that the mobile application itself check the upgrades and updates and download necessary patches. However, there could be many issues to implement this approach such as upgrade / synchronization of other dependent components. Personalization It would be expected from the mobile application to support personalization such as: 1. Preferred Language 2. Date / Time format 3. Amount format 4. Default transactions 5. Standard Beneficiary list 6. Alerts
4.15 Prospective: Increasing faster transmission via GPRS 3G technology to be lunched soon in Bangladesh is expected to bring in a mobile revaluation. Users are slowly getting used to the concept of mobile in hand held device as digital cash or wallet to carry out purchase. Presently low value M-commerce transecting are happening. To extent low cost banking services to existing clients & un-banked individuals especially in rural areas. Findings And Analysis
5. Findings and Analysis: 5.0 Findings: The findings of these reports has been enumerated below: All activities are conducted are per customers necessary. Limited number of Invest mode practices. Number of employee is not sufficient. FDR rate is low compare to other Bank Shorter bank space Some department are very slow to deal with customer Poor security system Shortage of ISP as well as capacity of generator is not high as necessary. Behavior of some employee is not good. Card and cheque division are not well arrange as necessary.
Customer available but employee are shortage. Customer are inspire to open account but lone or FDR is discrete. Network Problem as a result customer are sufferer a lot. One employee are not able to other desk in case of gathering of customer because of unable to do most type of work. A lot of missing is being held when customer open a account as like spelling of name, card types, cheque. 5.1 Demographic information analysis of the respondents 5.1.1 Ages of the respondents: Analysis: From the figure 01, it is evident that, among 100 respondents, 44%(the height portion) of the respondents belongs to the age group of 20-30. The lowest portion 13% belongs to the age group of 50+. The second height 26% respondents belong to the age between 31-40. Age
13% 17%
44%
20-30 31-40 41-50 50>
26%
Figure: 01 Age of the respondents Age
No. of Percentage Respondents
20-30
44
44%
31-40
26
26%
41-50
17
17%
50>
13
13%
Total
100
100%
Table: 01 Age of the respondent 5.1.2 Genders of the respondents: Analysis: The total respondents were 100 in number and from the figure 02 it is evident That, among 100 respondents 68 respondents were male and 32 were female.
Gender 80 70 60 50 40 30 20 10 0 Male
Female Figure: 02 Age of the respondents
Gender
No. of Respondents
Percentage
Male
68
68%
Female
32
32%
Total
100
100%
Table: 02 Age of the respondents 5.1.3 Professions of the respondents: Analysis: From the figure 03, it is evident that, among 100 respondents, 35%(the height Portion) of the respondents belongs to the other professional like student. The lowest portion 10% belongs to Professional The second height 25% respondents belong to the Service Holder
.
Profession 40 35 30 25 20 15 10 5 0 Student
Professionals Business ManServices Holder Housewife
Figure: 03 Age of the respondents
Reason opening Required
of
A/C No. of Respondents
Percentage
53
53%
Attractiveness
14
14%
Facilities
21
21%
Near from my place
12
12%
Total
100
100%
Table: 03 Qualification of the respondent 5.1.4 Reason for opening A/C: Analysis: From the figure 03, it is evident that, among 100 respondents, 53%(the height portion) of the respondents belongs that they have require Mobile A/C. The lowest portion 12% belongs to the near from my place. The second height 21% respondents belong to the Facility.
Reason For A/C opening
12% Requred
14%
Facility 53%
Attractiveness Near from my place
21%
Figure: 04 Reason of A/C Opening of the respondents Reason of A/C No. of Respondents opening Required 53
Percentage
Attractiveness
14
14%
Facilities
21
21%
my 12
12%
Near from place Total
100
53%
100%
Table: 04 Reason of Account opening of the respondents 5.1.5 Education Level of respondents: Analysis: From the figure 05, it is evident that, among 100 respondents, 38%(the height portion) of the respondents belongs that they are HSC level. The lowest portion 9% belongs that haven’t no formal education. The second height 25% respondents belong to the SSC Level.
Education Level
9%
16%
No Formal Eduction 25%
12%
SSC HSC Graduate Post Graduate
38%
Figure: 05 Education Level of the respondents
Education Level No Formal Eduction SSC HSC Graduate Post Graduate Total
No. of Respondents 9 25 38 12 16 100
Percentage 9% 25% 38% 12% 16% 100%
Table: 05 Education Level of the respondent 5.1.6 Responses analysis from the survey questionnaire: Mobile Banking is new but modern: Analysis: From the figure 9, it is evident that among 100 respondents, the highest respondents 61 agreed with the statement that Mobile Banking is new but modern. The second highest, 25 respondents also strongly believes that statements. For the data tables of this analysis.
70 60 50 40 30
Series1
63
20 27
10 0 Strongly Agree
Agree
7
3
Neutrial
Disagree
0 Strongly Disagree
Figure: 06 M-Banking new but modern of the respondents You feel safe in your transaction through mobile Analysis: From the figure 9, it is evident that among 100 respondents, the highest respondents41 agreed with the statement that You feel safe in your transaction through mobile. The second highest,29 respondents also strongly believes that statements. For the data tables of this analysis.
You feel safe in your transaction through mobile 45 40 35 30 25 20 15 10 5 0
41 29 20 10 Strongly Agree
Agree
Neutral
0 strongly Disagree
Disagree
Figure: 07 seem safe trangection of the respondents Call center services are always available when you require Analysis: From the figure 9, it is evident that among 100 respondents, the highest respondents 52 agreed with the statement that Call center services are always available when you require. The second highest, 27 respondents disagree believes that statements. For the data tables of this analysis. You feel safe in your transaction through mobile 60 50 40 30 20
50
10
27
18
3
2
0 Strongly Agree
Agree
Neutral
Disagree
strongly Disagree
Figure: 08 cell center service availability of the respondents The Cost of cash In and out is affordable in case of Mobile Banking. Analysis: From the figure 9, it is evident that among 100 respondents, the highest respondents 59 Strongly Disagreed with the statement that The Cost of cash In and out is affordable in case of Mobile Banking. The second highest, 21 respondents also strongly Agree believes that statements. For the data tables of this analysis.
Cost of M-Banking 70 60 50 40 30
Series1
59
20 10
21
20
Strongly Agree
Agree
0
0 Neutrial
Disagree
0 Strongly Disagree
Figure: 09 cost effecitive of the respondnts Available agent and branch for m-banking Analysis: From the figure 9, it is evident that among 100 respondents, the highest respondents 36 agreed with the statement that Available agent and branch for m-banking.The second highest, 24 respondents also strongly believes that statements. For the data tables of this analysis.
You feel safe in your transaction through mobile 40 35 30 25 20 15 10
36 24
20
5
14
6
0 Strongly Agree
Agree
Neutral
Disagree
strongly Disagree
Figure: 10 Available Agent of M-Banking M-banking is save your time Analysis: From the figure 9, it is evident that among 100 respondents, the highest respondents 31 agreed with the statement that M-banking is save your time.The second highest, 29 respondents also strongly believes that statements. For the data tables of this analysis.
Save Time 35 30 25 20 15
31
Series1
29
27
10 11
5 2
0 Strongly Agree
Agree
Neutrial
Disagree
Strongly Disagree
Figure: 11Save time of M-Banking I feel safe in my transactions with this bank. Analysis: From the figure 9, it is evident that among 100 respondents, the highest respondents 50 agreed with the statement that I feel safe in my transactions with this bank. The second highest, 21 respondents also strongly believes that statements. For the data tables of this analysis. You feel safe in your transaction through mobile 60 50 40 30 20
50 21
10 0 Strongly Agree
Agree
12 0 Neutral
Disagree
17 strongly Disagree
Figure: 12 Feel safe in Trangection of the respondents DBBL understands your specific needs Analysis: From the figure 9, it is evident that among 100 respondents, the highest respondents 41 agreed with the statement that DBBL understands your specific needs. The second highest, 20 respondents also Disagree that statements. For the data tables of this analysis.
You feel safe in your transaction through mobile 45 40 35 30 25 20 15 10 5 0
41 17
Strongly Agree
12
Agree
Neutral
20 10 Disagree
strongly Disagree
Figure: 13DBBL understand specific need of the respondents Time taken to process of Mobile transaction of this bank is acceptable Analysis: From the figure 9, it is evident that among 100 respondents, the highest respondents 58 agreed with the statement that Mobile Banking is new but modern. The second highest, 25 respondents also strongly believes that statements. For the data tables of this analysis. You feel safe in your transaction through mobile 70 60 50 40 30
58
20 25
10 0 Strongly Agree
Agree
17 0 Neutral
Disagree
0 strongly Disagree
Figure: 14 Trangection Time acceptance of the respondents In your experience, the approximate waiting time for cash in isAnalysis: From the figure 25, it is evident that, among 100 respondent , the highest 38% waits 15 min, for deposit., 28% needs to below 10 min., 18% waits for 30 min. and 16% waits for above 30 min.
Waiting for deposit 45 40 35 30 25 20
39
15
27
10
20
14
5 0
Belo 10Min
15 Min
30 Min
Above 30 Min
Figure: 15 Waiting time of the respondent In your experience, the approximate waiting time for cash out is Analysis: From the figure 25, it is evident that, among 100 respondent , the highest 50% waits 15 min, for deposit., 18% needs to below 10 min., 12% waits for 30 min. and 20% waits for above 30 min. Waiting for Cash Out 60 50 40 30 50 20 10
18
12
20
0 Belo 10Min
15 Min
30 Min
Above 30 Min
Figure: 16Waiting for cash out of the respondents Are you regular customer? Analysis: From the figure 21, it is evident that, among 100 respondent , the highest 76% are regular customer and 24% are irregular customers.
Types of customers
24% Yes No 76%
Figure: 17 types of the respondents How often do you use this facility? Analysis: From the figure 9, it is evident that among 100 respondents, the highest respondents 55 use this facility once a week. The second highest, 24 respondents also use this facility more than once a week. For the data tables of this analysis. Use this facility
18%
10%
50%
22%
Figure: 18 Frequent use of the respondents
once a week
More than once a week
once a month
Infrequent
Figure: 18 How Often Use this facilities Overall Responses of the Respondent:
Overall Responds
7% 25%
40%
4% 24%
Strongly Agree Agree Neutrial Disagree Strongly Disagree Figure: 19 Overall respondents in pie chart SWOT ANALYSIS
5.1.1 Strengths Strengths 1. Potential customer in rural and urban area where branch banking is not possible. 2. Partner is available.
3. New investment like Mobile Banking where no bank in Bangladesh is not start such kind of business 4. Low cost for opening Mobile Bank Account. 5. Possible to give hand to the remote area customer of there remittance earn from abroad. 6. Mobile bill pay or recherchĂŠ through Mobile Banking is possible. 7. Out let is available. 8. Tran section process is easy 9. Save money in rural area. 10. Salary/Allowance Disbursement 11. Strong network of telecom company 12. Efficient Employee of DBBL as well as Telecom Partner. 13. Cost effective
5.1.2 Weaknesses Weaknesses 1. Out Let is not available as per requirement. 2. Mobile ATM booth is not available. 3. Amount of transaction is very little. 4. Advertisement is not adequate that most of the people don’t know about Mobile Banking. 5. Employee are not efficient that M-Banking is new in Bangladesh. 6. Insecure out let that rubbery the money in remote area where security is not available. 7. New concept in Bangladesh is the beast weakness 8. Cash in and out cost is more than interest rate 9. Lack of Knowledge of operating Mobile transaction within customer.
5.1.3 Opportunities Opportunities 1. Lot of potential customer in Bangladesh that around 7 corer people use Mobile phone. 2. It may that the shopkeeper receive there payment through Mobile transaction. 3. Salary and allowance may distribute through Mobile Banking 4. Government and other International agencies positive attitude toward low classification rate. 5. Opportunity to expand banking business. 6. Large market for bank. 7. Gain more profit through Mobile Banking. 8. To reach the modern banking facilities to the rural area where banking facilities does not reach till now.
5.1.4 Threats Threats: 1) Customer may not use properly the process of M-Banking.
2) Reaching deeper into rural areas without costly investment in infrastructure. 3) Reducing the costs of servicing. 4) Interoperability 5) Security risks from robbery & holdup. 6) Scalability & reliability 7) Personalization 8) Customer education 9) Reduce cost of clients 10) Lack of out late 11) Cost of cash in and out is high compare to interest rate on bank deposit
Conclusion and Recommendation Conclusions: For service providers, Mobile banking offers the next surest way to achieve growth. Countries like Bangladesh where mobile penetration is nearing saturation, mobile banking is helping service providers increase revenues from the now static subscriber base. Also service providers are increasingly using the complexity of their supported mobile banking services to attract new customers and retain old ones. For the fact is that one day, in most of the world emerging markets, more people will use mobile telephones than use fixed telephone lines. Businesses that are based on mobile financial serviced will thus be a natural fit for these economies. What is more, there is no need to wait for the next generation mobile networks; these businesses can be built using today's technology. But to capture this significant opportunity, financial firms and telecommunications companies will have to partnerships with one another and, possibly, with merchants and retail chains as well. Dutch-Bangla Bank is pionear of Mobile Banking in Bangladesh and it has a lot of possibility to reach customes door as well as banking in the hand of customers.
6.1 Recommendation: Continue Mobile Banking in the rural areas to increase the use of E-Money especially in commercial applications. Continuous pilot testing of the other M-Banking services to model cost effective ways of reaching more and more people in areas farther away from bank. Develop a mobile banking website as information portal particularly for M-Banking. Continuous support and training workshop on Mobile Banking. Procedures develops on going: Developed M-banking system to automated transecting. ďƒ˜
Major problems in a business arises when it’s new. The officer should observe that whether there is loss of the top executive, demand, or any other most important new one has entered and often the change may be worse.
DBBL and concern partner should advertise more for attracting all level of customers. DBBL should encourage students for Mobile account opening because students are a potential source for a bank. DBBL should increase facility to fulfillment customers need. DBBL should increase its outlet. Bank should also be aware of significant changes in the training of M-Banking officer and concern Partners employee. Changes in industry trends may directly affect business so that it can no longer completely profitable. Therefore, the Bank should keep information about the environment of each industry in which its customers operate.
Real value of business can come from making regular visits to the customer’s place of business rather than holding all meetings in the Bank. Against big willful defaulters legal action should be taken promptly for customer MMoney Security. Should arrange more and more campain in public place to expan M-Banking customer. The cost of cash in and out should decrease. Try to involve small business to raise customers.
References and Appendix
References: Books: • Bringham, Eugene F, ‘Essential of Managerial Finance’ Twelfth Edition.
• Syed Ashrf Ali & R.A Howlader “Banking Low & Practice” First Edition November 2009 • Annual Report 2010 DBBL • Ross, Westerfield, Jaffe Corporate Finance Sixth Edition • Gitman, J Lawrence(2003), ‘Principal of Finance’ Tenth Edition Web Site: • Official website www.dbbl.bd.com • www.scribd.com/Dipu01718(Dipock Mondal Dipu) • www.theprofriton.com • www.linkedin.com • www.blog.com Others: • Dutch-Bangla Bank Ltd.2010 Annual Report • Prospectus of DBBL • Mobile Banking PDF
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