Letter of Transmittal

August 09, 2023

Tanzina Haque
Lecturer
European university of Bangladesh
Subject: Submitting a project paper on "Mobile Banking System of Bangladesh".

Dear Madam,
We are glad to submit the project report on the topic you’ve assigned us, “Mobile Banking
System of Bangladesh.” When preparing this report, we tried our best to follow your
instructions.
We made an honest effort to preserve your recommendations and comments carefully
while putting in this project paper. We need to offer our heartiest gratitude to you for your
dreary attempt for us, which allowed us to install our project. We got acquainted with
research methodology when we wrote this project paper.
We hope this project paper will meet your expectations. We will be happy to provide
any clarifications if required on any of the relevant matters.
Thank you.
Sincerely yours,

Team Break Even

European university of Bangladesh

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 Declaration

We hereby declare that the project paper is based on our original work except for
quotations and citations that have been duly acknowledged. We also declare it has not
been previously or concurrently submitted for any other degree at EUB or other
institutions.

Team Break Even

European university of Bangladesh

2
 Acknowledgment

First, we would like to thank Allah for allowing us to complete this project paper. We also
want to express our earnest appreciation and thankfulness to our supervisor, Tanzina
Haque, for constantly directing us with the utmost perseverance throughout the study.
With her ongoing cooperation, encouragement, and support, we succeeded in preparing
this resourceful project paper.

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 Executive Summary

Mobile banking in Bangladesh has experienced remarkable growth over the past
decade, driven by factors such as limited access to traditional banking services in rural
areas, increasing smartphone penetration, and government initiatives to promote digital
financial inclusion. Leading mobile banking providers, such as bKash, Nagad, and
Rocket, Upay, MYCash have played a pivotal role in expanding financial access to the
previously unbanked and under banked populations.

Key Players
- bKash: Established in 2010, bKash has become the market leader, offering a wide
range of financial services including money transfer, bill payment, mobile top-up,
and merchant payments.
- Nagad: Launched in 2018, Nagad has rapidly gained prominence by offering
innovative services, focusing on digital payments and enhancing financial literacy.
- Rocket: Introduced by Dutch-Bangla Bank, Rocket has contributed significantly to
mobile banking's growth, offering various financial services and partnerships with
e-commerce platforms.
- Upay: Started its journey in early 2021, offering a broad range of mobile financial
services to people from all walks of life such as mobile transactions, utility bill
payment, in-store and e-commerce payment, inward remittance, salary
disbursement, airtime recharge and other value added financial services.
- MYCash: MyCash is a mobile wallet that lets you do it all with electronic cash.
Removing the need for a bank account, MyCash provides a way to make fast,
reliable, safe, and convenient daily financial transactions – all at the convenience
of your mobile phone.

Benefits:
The mobile banking system has brought several notable benefits to Bangladesh:
- Financial Inclusion: Mobile banking has extended financial services to previously
underserved populations, fostering economic empowerment and reducing poverty.
- Convenience: Customers can perform transactions anytime, anywhere, reducing the
need for physical presence at bank branches.
- Cost Efficiency: The digital nature of mobile banking transactions often results in
lower costs compared to traditional banking methods.
- Empowerment of SMEs: Small and Medium Enterprises (SMEs) can access
capital more easily through mobile banking services, driving economic growth.

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Challenges:
While mobile banking has made substantial progress, challenges remain:
- Digital Literacy: A significant portion of the population lacks the necessary digital skills
to effectively use mobile banking services.

- Security Concerns: Instances of fraud, phishing, and unauthorized transactions raise

security concerns among users.
- Regulatory Framework: Striking a balance between innovation and robust regulatory
measures is crucial for maintaining the integrity of the financial system.

Future Prospects:
The future of mobile banking in Bangladesh holds immense potential:
- Financial Innovation: Continued innovation in service offerings and technology will
enhance customer experiences and drive further adoption.
- Partnerships: Collaborations between mobile banking providers, traditional banks,
and fintech startups can lead to a more integrated financial ecosystem.
- Enhanced Security: Investment in robust security measures will be critical to building
and maintaining trust among users.
- Rural Penetration: Increased efforts to educate and onboard rural populations will
contribute to even greater financial inclusion.

In conclusion, the mobile banking system in Bangladesh has made significant strides,
reshaping the country's financial landscape and offering unprecedented access and
convenience to a diverse range of users. While challenges persist, the sector's potential
for growth, innovation, and positive impact on financial inclusion remains high.
Continued collaboration between stakeholders, regulatory bodies, and technological
advancements will be key to realizing this potential and driving the industry forward.

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 Title Fly

Serial Topic
No.

1 Letter of Transmittal

2 Declaration

3 Acknowledgment

4 Executive summary

5 Intro of the study

6 Background of the study

7 Methodology of the report

8 Analysis and Discussion

9 Confliction, Limitation and Recommendation

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 Table of Contents

LETTER OF TRANSMITTAL .................................................................................................. 1

DECLARATION ...................................................................................................................... 2

ACKNOWLEDGMENT ............................................................................................................ 3

EXECUTIVE SUMMARY ......................................................................................................... 4

CHAPTER I: INTRODUCTION ................................................................................................ 8

1.1 INTRO OF THE STUDY ............................................................................................ 9

1.2 BACKGROUND OF THE STUDY ............................................................................. 10

CHAPTER II: METHODOLOGY ............................................................................................. 11

2.1 REACHARCH DESING .......................................................................................... 12
2.2 SMPLING PLAN .................................................................................................... 12
2.3 DATA COLLECTION METHODE ........................................................................... 12
2.4 LIMITATION OF THE STUDY ................................................................................. 12

CHAPTER III: ANALYSIS AND FINDINGS........................................................................... 13

3.1 DATA ANALYSIS ................................................................................................... 14

3.2 ANALYSIS TOOLS................................................................................................. 14

CHAPTER IV: RECOMMENDATIONS AND CONCLUSION ................................................. 21

4.1 CONCLUSION ...................................................................................................... 23
4.2 LIMITATION ..................................................................................................................... 23

4.3 RECOMMENDATIONS ........................................................................................... 23

REFERENCES ...................................................................................................................... 24

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 CHAPTER I: INTRODUCTION

1.1 Intro of the Study

1.2 Background of the Study

8
1.1 Intro of the Study

One of the most interesting technological developments of the past decade has been
the growth of mobile phones in developing countries. In fact, in the developing world, more
people likely have mobile phones than bank accounts (Porteous, 2006). There were
approximately 16 million people in Bangladesh in 2012, but only 13% of them had bank
accounts. Consequently, Bangladesh Bank decided to permit commercial banks to offer
financial services to "the banked and the unbanked" via mobile networks, also known as
mobile banking, mobile transfers, and mobile payments.
The mobile platform offers a convenient additional way to manage money without
handling cash. Mobile phone providers see M-banking as a possible service to provide
users with. However, banks and other financial institutions view mobile banking as a way
to reach "the unbanked" and offer services to them. Although they are addressing its
security and taxation concerns, government regulators also recognize a similar appeal.
Surprisingly, there needs to be more academic research on how mobile banking systems
affect developing countries.

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1.2 Background of the Study

Mobile network operators first came to Bangladesh in 1993 through Advanced Mobile
Phone Service (AMPS) technology. Later, Code-Division Multiple Access (CDMA)
technology was introduced, and mobile banking services were first made available in
September 2011 under a clear directive from Bangladesh's central bank on "Mobile
Financial Services for Banks." Despite being a more recent service in the country, mobile
banking service has quickly gained popularity due to the need for adequate traditional
banking facilities.
Customers can access banking services anywhere with mobile banking. Businesses and
business owners can now save time by using mobile applications to process payments
or even receive money from clients directly to their phone numbers. Thanks to mobile
technology, banks can reduce operational costs while still maintaining customer
satisfaction. Any bank customer can use their app to request a service, like opening an
account or even to schedule debit orders or other payments. This enables higher
transactional volumes, which ultimately spurs business growth. A mobile banking app
gives a user quick access to various banking services. Users can, for instance, check the
balance in one's savings account, transfer money to another user, ask for a new
checkbook, set up standard instructions, start money transfers, open a Fixed Deposit
account, and pay utility bills.

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 CHAPTER II: METHODOLOGY

2.1 Research Design

2.2 Sampling Plan

2.3 Data Collection Method

2.4 Limitations of the Study

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The procedures used to find, select, process, and analyze information about a topic are
referred to as research methodology. The methods section addresses two major issues:
How was it investigated? How was the information gathered or generated? A research
methodology gives research credibility and results that are scientifically valid.

2.1 Research Design

The majority of research falls into one of three categories: exploratory, descriptive, or
causal. Each has a distinct function and can only be utilized in specific ways.
Exploratory: Exploratory research is the preliminary research to clarify the exact nature
of the problem to be solved. It focuses on the discovery of new ideas and insights. It is
most typically used to clarify company concerns, possible growth areas, and alternate
courses of action.
Descriptive: When studying a population or phenomenon, descriptive research
describes its characteristics. It does not explain how, when, or why the characteristics
developed. Instead, it responds to the "what" question. In contrast to exploratory
research, descriptive research is organized and structured so that the data gathered
may be statistically inferred from a population.

Causal: It is also regarded as conclusive research. The goal of causal research is to

explain the cause and effect relationship between variables. This is in contrast to
descriptive research's observational style, which uses experiments to determine whether
a relationship is causal .This research is descriptive in nature.

2.2 Sampling Plan

A sampling plan will address whom to survey, How many to survey, and How to select
them. In other words, the sampling plan will address three issues sampling unit, sample
size, and sample procedure. Here, the study considered 5 mobile banking provider, and
the selection procedure followed simple random sampling.

2.3 Data Collection Method

We collected data from primary sources. This report is categorized based on primary
sources. We created a questionnaire with 16 items. A self-administrative questionnaire
was used to obtain primary data. The sample size was 40. The questionnaire was
divided into two sections. The first phase involved describing financial information such
as yearly transaction. The second section of the study focused on number of customer
who using Mobile banking.

2.4 Limitation of the Study

We faced some challenges and barriers while collecting the data and creating the project
paper. Moreover, the major limitation of this research project paper is the small sample
size.

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 CHAPTER III: ANALYSIS AND FINDINGS

3.1 Data analysis

3.2 Analytical Tools

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3.1 Data analysis

In our research, we considered 5 mobile banking company. We chose them randomly

through a questionnaire by our self.

3.2 Analytical Tools

We began our survey by developing questionnaires. Microsoft word was used to
make this questionnaire. After obtaining the data, we used Microsoft Excel to evaluate
it. To make our report more appealing, we used a variety of pie charts, bar diagrams,
and many more charts.

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3.2.1 bKash
bKash is a mobile financial service (MFS) company in Bangladesh. It was launched in
2011 by BRAC Bank and Grameenphone. bKash is the largest MFS company in
Bangladesh, with over 50 million active users. bKash is a convenient and affordable way
to send and receive money, pay bills, and make purchases. It is also a valuable tool for
businesses and individuals who need to access financial services .
Transaction
Transaction (Bn)
8000

6000

4000

2000

0
2018 2019 2020 2021 2022
Transaction (Bn)

The graph shows the number of transactions of bKash in billions by year. The x-axis
shows the years 2018, 2019, 2020, 2021, and 2022. The y-axis shows the number of
transactions in billions. The graph shows that the number of transactions has increased
steadily over the past five years. In 2018, there were 2,703.1 billion transactions. In 2019,
there were 3,332.8 billion transactions. In 2020, there were 4,310.6 billion transactions.
In 2021, there were 5,862.1 billion transactions. And in 2022, there were 7008.1 billion
transactions.

Customer
Number of customer (Mn)
80
60
40
20
0
2018 2019 2020 2021 2022

Customer (Mn)

The graph shows the number of customers of bKash who have purchased a product or
service over the past five years. The x-axis shows the years, from 2018 to 2022, and the
y-axis shows the number of customers in millions. The graph shows that the number of
customers has been steadily increasing over the past five years. In 2018, there were 30
million customers. This number increased to 40 million in 2019, 50 million in 2020, 60
million in 2021, and 70 million in 2022.

15
3.2.2 Nagad
Nagad, the digital financial service of the Bangladesh Postal Department, has gained
significant popularity since its launch. It offers services such as fund transfers, utility bill
payments, merchant payments, and cash-in and cash-out services through an extensive
network of agents. Nagad's advantage lies in its integration with the country's postal
infrastructure, providing accessibility even in remote areas. However, limited
interoperability and a relatively smaller user base are areas for improvement.
Transaction

Transaction(Bn)
8
6
4
2
0
2019 2020 2021 2022

Transaction(Bn)

The graph is a bar graph showing the number of transactions by year. The horizontal
axis shows the years 2019, 2020, 2021, and 2022. The vertical axis shows the number
of transactions in billions (Bn).The bars in the graph show the number of transactions for
each year. In 2019, there were 0.5 billion transactions. In 2020, there were 2.48 billion
transactions. In 2021, there were 5.83 billion transactions. And in 2022, there were 6.18
billion transactions.
Customer

80
Number of Customer (Mn)

60

40

20

0
2019 2020 Customer 2021 2022

We can see the number of customers in year 2019 is 10 Mn which is 20 Mn in year 2020.
An increase of 20-10 = 10 Mn in difference. In the next year, 2021, the number increases
to 50 Mn. An increase of 50-10=40 Mn than the previous year. In 2022 the number of
customers increases 70 Mn.

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3.2.3 Rocket
Rocket is the name of the mobile financial service offered by Dutch Bangla Bank Limited
(DBBL). It was rebranded from DBBL Mobile Banking in September 2016. ROCKET
offers a range of products and services, including cash transfers between individuals
(P2P) and between businesses/organizations and individuals (B2P), bill payments,
merchant payments, mobile top up and international payments.

Transaction
Transaction (Bn)
1500

1000

500

0
2017 2018 2019 2020

Transaction (Bn)

The graph shows the number of transactions in billions of tk over the years 2017, 2018,
2019, and 2020. The x-axis shows the years, and the y-axis shows the number of
transactions in billions of tk. The graph shows that the number of transactions has been
increasing over the past four years. In 2017, there were 916.730 billion transactions.
This number increased to 994.801 billion in 2018, 899.876 billion in 2019, and 1225.523
billion in 2020.

Customer
Number of customer (Mn)
40
30
20
10
0
2018 2019 2020 2021 2022

Customer(Mn0

The graph shows the number of customers of rocket from 2018 to 2022. The x-axis
shows the years, and the y-axis shows the number of customers in millions. The graph
shows that the number of customers has been steadily increasing over the past five
years. In 2018, there were 16.29 million customers. This number increased to 17.93
million in 2019, 17.93 million in 2020, 26.65 million in 2021, and 31.82 million in 2022.

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3.2.4 MYCash
MyCash is a mobile wallet that lets you do it all with electronic cash. Removing the need
for a bank account, MyCash provides a way to make fast, reliable, safe, and convenient
daily financial transactions – all at the convenience of your mobile phone.

Transaction
Transaction (Mn)
12
10
8
6
4
2
0
2018 2019 2020 2021 2022

Transaction (Mn)

The graph shows the number of transactions in MYCash from 2018 to 2022. The
horizontal axis shows the years, and the vertical axis shows the number of transactions
in millions. The line graph shows that the number of transactions has been increasing
steadily over the past 5 years. In 2018, there were about 6.60 million transactions, and
in 2022, there were about 10.42 million transactions. There was a slight dip in the
number of transactions in 2020, but this was likely due to the COVID-19 pandemic. The
number of transactions rebounded in 2021 and 2022.

Customer
Customer (Mn)
0.8
0.6
0.4
0.2
0
2018 2019 2020 2021 2022

Customer (Mn)

The graph shows the number of customers who have purchased a product or service over the
past five years. The horizontal axis shows the years, and the vertical axis shows the number of
customers in millions. The graph shows that the number of customers has been increasing
steadily over the past five years. In 2018, there were about 0.58 million customers, and by 2022,
the number of customers had increased to about 0.0.73 million.

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3.2.5 Upay
Upay mobile banking company is a brand of UCB Limited or a subsidiary company of
the United Commercial bank (UCB). Upon receiving the license from Bangladesh Bank,
Upay started its journey in early 2021, offering a broad range of mobile financial services
to people from all walks of life.

Transaction

Transaction(Mn)
40
30
20
10
0
2021 2022

Transaction(Mn)

The graph shows the number of transactions between 2021 and 2022. The horizontal
axis shows the years, and the vertical axis shows the number of transactions in millions.
The graph shows that there were 13.2 million transactions in 2021, and 31 million
transactions in 2022. This represents increase of 17% in the number of transactions from
2021 to 2022.

Customer

Customer(Mn)
8
6
4
2
0
2021 2022

Customer(Mn)

The graph shows the number of customers between 2021 and 2022. The x-axis shows
the years, and the y-axis shows the number of customers in millions. The graph shows
that there were 3.9 million customers in 2021, and 6.67 million customers in 2022. This
means that the number of customers increased by 2.77 million from 2021 to 2022.

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3.2.6 Overview

Customer

14%
bKash
2%
40% Nagad

18% Rocket
Upay
others
26%

The pie chart shows the percentage of customerby mobile Banking in Bangladesh. The
largest share of the pie, 40%, is held by Bikash. Nagad is the second-largest app, with
26% of the market share. Rocket is in third place, with 18%. Upay has 2% of the market
share, and the remaining 14% is shared by other apps.

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 CHAPTER IV: Conclusion, Limitation,
Recommendations,

4.1 Conclusion

4.2 Limitation

4.3 Recommendations

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4.1 Conclusion

The study also produces intriguing results regarding mobile payments made by
Bangladeshi households. Mobile banking are primarily used by family households to
pay bills and buy online or offline goods. The use of mobile payments reduces
transaction times and expenses. For the users, mobile banking also present some
very serious issues. Criminals or pretend distant relatives will occasionally call and
demand payment via mobile device.

Therefore, understanding mobile banking services will help the different stakeholders
of Bangladesh. The findings of this research can be used as input by the policy-makers
to create policies that will assure the expansion of this industry. This study serves as a
resource for all parties involved. This study is a reference for all stakeholders in this
regard. Further works in this area are highly suggested so that others in the sector can
constantly be kept informed about Bangladesh's mobile banking industry's dynamics.

4.2 Limitations
Some limitations of the mobile banking system in Bangladesh were:
1. Limited Connectivity: In rural areas, the mobile network coverage might be
inadequate, leading to difficulties in accessing mobile banking services.
2. Low Smartphone Penetration: Not everyone in Bangladesh owns a smartphone,
which restricts the reach of mobile banking services to a significant portion of the
population.
3. Digital Literacy: Many people may lack familiarity with mobile banking technology,
hindering their ability to use the services effectively.
4. Security Concerns: Cyber security risks, such as data breaches and phishing
attacks, could deter users from adopting mobile banking.
5. Transaction Limits: Mobile banking services might impose certain transaction
limits, which could be restrictive for some users.
6. Network Congestion: During peak hours, the mobile network can experience
congestion, causing delays in processing transactions.
Please note that the mobile banking landscape in Bangladesh might have evolved
since my last update, so it's essential to check for the latest information to get a
comprehensive view of the current limitations.

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4.3 RECOMMENDATIONS

We have some recommendations regarding the mobile banking practice in

Bangladesh concerning the security issue, charges per transaction, and customer
satisfaction, which all are described below.

 More and more prominent measures of the association are moving to

application- based help, so keeping up the adaptable applications'
convenience
for better customer experience and neighborliness is a significant test.
Associations must drop a couple of resources to plan striking UI (User
Interface) interfaces for their applications.

 Pin code issue is a worry for some clients; the security of pin codes and
sometimes numerous clients' failure to remember their pin and the square issue
is an upsetting worry for some clients. Organizations need to focus on this
issue.

 The principal stresses from the customers are all about the assistance charge;
various respondents feel that standard trade piles up horrific help charges,
which are not reliably sensible for the general mass. So the company should
reduce their charges.
 Mobile financial clients face massive problems with fake exercises. A circle of
culprits has framed who stunt individuals prompting monetary mischief. The
organization initially bringing a more upgraded security framework would have
an additional benefit for catching the more substantial piece of the pie.

23
References
Dutch Bangla Bank Ltd.
bKash Ltd.
Mercantile Bank Ltd.
UCB Fintech Company Ltd.
Bangladesh Post office (with interim approval of BB)
www.linkedin.com
dhakatribune.com

tbsnews.net
businessinspection.com.bd
bb.org.bd/en/index.php

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