Industry Analysis Report of BKash

Course: Strategic Management (MGT-490)

Semester: Autumn 23’
Sec: 7
Submitted by: Team Pink Ladies

Name ID
1. Naima Haider(Give an overview of the company, Executive summary, Conclusion) 1730660
2. Orpa Tabassum (Industry Analysis-Industry Size and Growth Trends, Maturity of 2010418
the Industry, Seasonality of the industry)

3. Mohosina Afrin Shoborna (External Economic Factors and their effect on the 2010455
industry, Competitive Environment and Changes in the Competitive Environment)

4. Sumaia zannaty saika (Industry Analysis-Technological factors, Regulatory, 2021415

political and legal concerns)

5. Sajir Bin Zahir (Key Challenges Facing the Industry, Company's Steps to Meet Three 2030721
Key Challenges)

Submitted to: Dr. Imranul Hoque (Marketing, School of Business. IUB)

Table of Contents

Contents Page Number

Letter of Transmittal 3
Executive Summary 4
Company Overview: BKash 5-6
Industry Analysis 7-16
● Growth Analysis
● Maturity of the Industry
● External Economic Factors
● Seasonality
● Technological Factors
● Regulatory, Political and Legal Concerns
● Competitive Environment: Porter’s 5 Challenges

Key Challenges Facing the Industry 17-19

Company’s Steps to Meet Three Key Challenge 20-21
Conclusion 22
References 23

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Letter of transmittal

December 10th, 2023

Dr. Imranul Haque

Lecturer, School of Business

Independent University, Bangladesh

Subject: Submission of the Industry analysis report of BKash

Dear Sir,

It is our pleasure that we were able to submit this report, which was assigned by you on time.
The report is an important part of this course and we have tried to give our level best to complete
this assignment with the help of your guidance and instruction.

We would like to convey our deepest gratitude and thank you for such an amazing experience in
this course and for all the new things we could learn in this course. We have tried to give my
time and effort to utilize all the information available to make this report according to the
guidelines.

Yours sincerely,

Team Pink Ladies

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Executive summary

This report talks about and showcases BKash’s industry analysis and its company overview.
BKash is the market leader in the mobile banking industry and is one of the high market share
holders of the mobile banking industry. The report is divided into 5 categories consisting of
analysis such as Mission and Vision of BKash, PESTLE Analysis, STEEP Analysis and Porter’s
5 Forces Analysis.

Every analysis gives an in-depth insight of the major business strategies, the strengths, and
opportunities in contrast with threats and weaknesses, the mode of rivalry and competition in the
market for BKash also the brief glimpse of how well the company is responding to the affecting
factor in the industry.

Finally, the classic Porter's 5 powers study delves into the advantages and disadvantages of a
company in the industry in terms of the rate of alternative products risks, the number of rivals,
and how to minimize the purchasing power of both sellers and buyers in the market. In addition,
how to deal with such societal interest classes. In addition, BKash’s shortcomings are addressed.

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Company overview

Established in April 2013 as a joint venture between BRAC Bank Bangladesh Limited, Money in
Motion, LLC, the International Finance Corporation (IFC), and the World Bank Group, bKash
Limited is a subsidiary of BRAC Bank. Offering a broad range of financial services to
Bangladeshis is bKash's goal. It started with International Finance corporation (member of World
Bank Group) in 2013, in 2014 Bill and Melinda
Gates foundation became investors of the
company and in 2018 Ant Financial (Ali pay, an
affiliate of Alibaba Group) invested in the
company as well. BKash’s main aim was to
help the low-income households to have access
to easily accessible, dependable, and affordable
mobile banking services.

Most people in Bangladesh—more than 70% of them live in rural areas without access to official
banking facilities. These services are mainly used by them to get money from faraway relatives
or to employ financial instruments to better their situation. More than 68% of them possess a cell
phone, and they have access to official banking services. Other than communication, these
phones can carry out more intricate and practical tasks. a network that securely offers banking
services to Bangladesh's rural poor population.

By offering straightforward, reasonably priced, and dependable financial services, bKash is

dedicated to growing its network of financial inclusion. Bangladeshis will be able to send and
receive money securely via mobile devices thanks to bKash's highly scalable mobile
money-based mobile financial services technology.In Fortune Magazine’s annual list of
Companies that changed the world in 2017, BKash was ranked 23rd among 50 other companies.
BKash has also been recognized as the best brand of Bangladesh in 2019 and 2020 after a
consumer survey was done. BKash was also selected as the No.1 Mobile Financial Service
company for the fourth time in a row.

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Mission statement

BKash conveys a clear message to its consumers that it provides financial services that are
convenient, affordable, and reliable. BKash wants to provide a solution for Mobile Financial
Services, built on a highly scalable Mobile Money platform, allowing the people of Bangladesh
to safely send and receive money through mobile devices.

Vision

The ultimate objective of BKash is to ensure access to a broader range of people in Bangladesh
especially the people who have no access to banks in rural areas and to also motivate unbanked
people.

BKash’s service has no special market segments, it is available for everyone to use. The services
of BKash are:

Cash-in: Process of depositing money to a BKash account

Cash-out: Process of withdrawing money from a specific BKash account

Sending money: Transferring money from one BKash account to another

Payment: Making payments via BKash to stores that accept this payment.

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Industry analysis
Mobile Banking

Mobile banking refers to the practice of conducting various banking activities and transactions
using a mobile device, such as a smartphone or tablet. The development of banking over time
and its current state is both a result of advances in technology and rising internet usage. Mobile
banking has become increasingly popular due to the widespread use of smartphones and the
convenience it offers to customers. The initial goal of banks, which was to satisfy customers, can
be fulfilled easily and it can be accessed from anywhere at any time due to mobile banking.
Typically, mobile banking is available around-the-clock. Only a mobile device and a mobile
network or Wi-Fi are needed for mobile banking. It allows customers to access their bank
accounts, manage finances, and perform banking transactions remotely, without the need to visit
a physical bank branch. Mobile banking in Bangladesh started from 31st March 2011. Dutch
Bangla Bank Limited introduced the idea of Mobile Banking Services (MBS) in Bangladesh.
This banking is mostly helpful for people in remote areas (GSMA Mobile and Development
Intelligence, 2012). There are more than 4 billion mobile subscribers or around 61% of the
world's population, it is the greatest approach for banks to take advantage of this situation by
interacting with customers through mobile banking. Mobile banking lowers costs for banks,
consumes less storage space, and processes transactions faster than traditional banking does.
When compared to e-banking and mobile banking, mobile banking is also safe compared to
e-banking as there is no risk of being hacked and e-banking requires an extra set of skills to
operate it whereas mobile banking does not. The global economy has been significantly impacted
by mobile banking, which, although still developing and becoming more widely accepted in
some nations, is already well-established in others.
There are two different ways to go about mobile banking. First, the bank serves as the major
intermediary and offers the service directly to the users, which means they have their own
network infrastructure. The alternative method is when banks are using third parties as a medium
for offering the mobile banking service. In this method, the bank only has a database of the users
whereas the service providing data is done by a third party. The services are either provided over
the GPRS protocol or the SMS protocol in both processes. SMS is often more common and
widely used in developing countries due to its affordability and simplicity.

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Global view on mobile banking

Mobile banking has become a transformative force in the global financial landscape, reshaping
how individuals manage their money and access financial services. Mobile banking was first
introduced in 2001 and till 2006 there were only 10 Mobile Banks in the world, and it has been
gradually increasing since then and by the end
of 2011 there were more than 140
organizations. The major commerce boom has
happened in African region following by Asian
countries (Michael U. Klein, 2011). There are
several mobile banking firms in Africa, but
M-Pesa by Vodafone has the most influence
because it has roughly 13 million users in
Kenya and 6 million users in Tanzania. About
20% of Americans regularly use mobile
banking services. In Japan, more than 1.5
million people are subscribed to mobile
banking and are quite active and in India 77 banks have been given the approval to start their
mobile banking operations. However, mobile banking did not succeed in European nations like
Spain and Austria, and even in Germany, the number of banks that were permitted to use mobile
banking fell from 22 to 14 banks in 2006.

Bangladesh view of mobile banking

The concept of mobile banking in Bangladesh began to take shape in the early 2010s with the
launch of various services by different banks and telecom operators. One of the earliest and most
significant initiatives was "bKash," launched in 2011 as a joint venture between BRAC Bank and
the world's largest NGO, BRAC. bKash provided a platform for basic financial services such as
money transfers and bill payments through mobile phones. In 2013 The Central Intelligence
Agency (CIA) came up a report that Bangladesh is the eighth largest populated country with
about 161 million people and among them almost 90 million people have mobile phones. Even
though Bangladesh is a developing nation it is still yet to implement the electronic banking due

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to obstacles like poor infrastructure, unskilled labor, lack of policies and central networking
system. The Bangladesh Bank has informed other banks about mobile banking but most of the
banks are not capable to improve their ICT systems and thus it is not possible to reach the people
with the current bank system and therefore mobile banking is the only way to reach these people.
Bangladesh Bank has given licenses to 23 banks to run this mobile banking operation and among
these, 14 banks have full mobile financial service permission, and the other 9 banks have the
permission for international remittance transaction only through mobile. (Bank, July 2012).

bKash and the mobile banking industry:

Mobile financial services were first introduced in Bangladesh in 2011 with the launch of a
service called "bKash." This was a joint venture between BRAC Bank and Money in Motion
LLC, a subsidiary of BRAC. Bkash are the current leaders of this mobile banking industry in
Bangladesh. This industry is mostly controlled by all the national banks and the main companies
are bKash by BRAC Bank, Rocket by Dutch Bangla Bank Ltd, MYCash by Islami Bank
Bangladesh Ltd, MyCash by Mercantile Bank Ltd, Ucash by United Commercial Bank Ltd and a
recent new entry like Nagad. There are many other banks that started their operations but have
not made a big impact like these banks. These banks could not have done mobile banking
without the help of the mobile phone network operators like Banglalink, Robi, Grameenphone,
Airtel, and Teletalk. The IT companies also play an important role in this industry, and it consists
of both foreign companies and local companies. This industry is financed mostly by foreign
companies, the general public and parent banks. Normal banking services, micro finance services
and cross-border transaction companies are competitors of the mobile banking industry. There
are substitutes for mobile banking like credit and debit cards, online transaction services, checks
and cash. Moreover, more than 30 non-banking financial institutes and mobile phone operators
are also potential entrants in the industry.

Rocket: "Rocket" is the brand name of a mobile financial service offered by Dutch-Bangla Bank
Limited (DBBL), one of the leading private commercial banks in Bangladesh. Rocket, like other
mobile banking companies, does banking processes without the physical bank itself. It was also
one of the first to offer their services through a
variety of mobile phones. They have their own

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app called Rocket and it provides services like cash-in, cash out, merchant payment, utility
payment, salary disbursement, foreign remittance, government allowance disbursement and ATM
money withdrawal. They have a savings program that lets their customers adapt to savings habits
and they also provide online banking at an affordable cost.
Nagad: "Nagad" is another popular mobile financial service in Bangladesh, operated by the
Bangladesh Post Office. It was launched as a digital financial service to provide basic banking
and financial services to the unbanked and underbanked population of Bangladesh. The service
was officially launched in March 2019, and it quickly gained traction due to its widespread reach
through the extensive network of post offices across the country. Their purpose is to improve the
lives of the people who are unable to access
the normal banking processes and thus
Nagad is providing them with financial
flexibility. Their main services are cash-in,
cash-out, person-to-person money transfer
and mobile top-ups. It also allowed users to open accounts digitally and perform transactions
through their mobile phones. The company contributes to the socio-economic development of
the country.

UCash: United commercial bank Ltd was given the approval to start
mobile banking for its customers and they came up with Ucash. UCBL
believes that everyone should have access to all the banking facilities,
and they believe in ‘Financial Inclusion” and thus that is the reason they
are trying to bring all the unbanked closer. Ucash is acting as a catalyst
for economic development of the unbanked people by supplying fast and safe banking services.
They are introducing those who previously were not able to access any banking activities.

MYCash: MYCash is a customer centric mobile financial service by

Mercantile Bank Limited (MBL). MYCash commits to deliver a wide
range of financial products and services through mobile phone to the
people of Bangladesh. MYCash has been authorized by Bangladesh
Bank to offer and operate Mobile Financial Services. MYCash

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promises the public to provide a convenient and secured services to ‘Make Life Easy.’ The vision
of MYCash is to provide easy solution over finance and remove one of the biggest barriers in
Bangladesh which is complication regarding access and control over finances. Their mission is to
provide relief in the lives of their customers. Their main goal is all about helping the people of
Bangladesh, by ensuring easy access over financial services.

Growth analysis

The mobile banking sector is presently in its mature stage, having reached the height of its
development stage in 2014, and the majority of the top players enjoy substantial market shares
and revenues. The market leader is BKash, followed by Nagad in second place. More than 80%
of people currently have access to mobile devices, and the majority of them are familiar with
mobile banking platforms. The percentage of financial transactions completed through mobile
banking has increased from 46.26% in 2014 to around 60% now. The number of active accounts
also rose from 41.22% in 2014 to over 65% now, indicating that many more individuals are using
mobile banking to conduct any kind of transaction.

Globally and particularly in Bangladesh, the mobile banking business was significantly impacted
by the pandemic that struck the world in 2020. During the first lockdown, citizens were unable to
leave their homes to make any purchases and could not physically visit a bank to withdraw
money. Since the virus was spreading quickly, many businesses and individuals preferred using
mobile banking apps like BKash or Nagad instead of using cash. Restaurants, coffee shops, and
online shopping sites all urged customers to pay via mobile banking services rather than
exchanging cash with delivery people. All restaurants and cafes have joined with food delivery
services like Food Panda, Pathao, and Hungry Naki to give promotional deals to customers who
pay with BKash, Nagad, Rocket, and other payment methods. Ride-sharing applications like
Uber, Pathao, Shohoz, and OBhai also provided promotional discounts, and some customers
made using mobile banking services a requirement. The mobile banking sector saw some benefit
from this shutdown because it resulted in a sharp rise in usage. Since the epidemic, mobile
banking has become so popular that practically all organizations and companies use it for
transactional purposes.

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Maturity of the Market

Mobile banking's present industry structure is oligopoly. Mobile financial services have
developed into an oligopoly market due to a sufficient number of service providers, high entry
barriers, and little room for service differentiation. Only a small number of banks in Bangladesh
have been given permission by the Bangladeshi bank to offer this service, and the majority of the
businesses in this sector are banking firms with strong financial histories. Entry barriers include
high capital needs, stringent laws and regulations, uneven access to the distribution network, and
economies of scale of established companies have made it challenging for new enterprises to
enter the market. The product or service in an oligopoly market may or may not be distinct, and
there is little scope of differentiation for mobile.

External Economic Factors

● Economic Expansion: As the economy expands, more individuals have extra money to
spend on mobile banking services.
● Inflation: can have an impact on how much it costs to offer mobile banking services, but
banks can control this by negotiating lower fees with their partners.
● Interest Rates: People may borrow money for less money when interest rates are low,
which may lead to a rise in the demand for mobile banking services.
● Government Initiatives: The Bangladeshi government has encouraged the growth of
mobile banking, which has improved the business climate for banks.

Although there is a favorable general trend,

demand for mobile banking services is
being fueled by the expansion of the
economy and benevolent government
initiatives.

Seasonality

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 Due to the year-round use of mobile banking, seasonality does not truly have a significant
impact on the sector. Perhaps on special occasions like Eid or Ramadan, the rate of usage
increases. However, it has neither good nor bad effects generally.

Technological Factors
Technical production is a result of technological variables such as production, logistics,
information, and communication resources. technological considerations have a favorable impact
on the MFS in Bangladesh. Every sophisticated finance exchange corporation has quickly
adopted the same invention up to this point. Technology needs to progress and make headway. In
fact, even though every bank is making an effort to provide their customer base with mobile
financial services, or m-banking administrations, they are aware of the advantages inherent in
their stage of operation. Since the beginning of their business, bKash has been ahead of rivals
like ucash and u-pay. Their redesigned mobile app offers all the elements a customer should be
aware of when using the service, yet it's still very affordable for all. The first two companies to
implement QR codes in this benefit framework are iPay and Upay. Mobile Financial Services is
still trying to establish itself and maintain the fierce rivalry in the market, which eventually
benefits the entire sector.

Regulatory, Political and Legal Concerns

Technical production is a result of technological variables such as production, logistics,

information, and communication resources. technological considerations have a favorable impact
on the MFS in Bangladesh. Every sophisticated finance exchange corporation has quickly
adopted the same invention up to this point. Technology needs to progress and make headway. In
fact, even though every bank is making an effort to provide their customer base with mobile
financial services, or m-banking administrations, they are aware of the advantages inherent in
their stage of operation. Since the beginning of their business, bKash has been ahead of rivals
like ucash and u-pay. Their redesigned mobile app offers all the elements a customer should be
aware of when using the service, yet it's still very affordable for all. The first two companies to
implement QR codes in this benefit framework are iPay and Upay. Mobile Financial Services is

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still trying to establish itself and maintain the fierce rivalry in the market, which eventually
benefits the entire sector.

Challenges faced by MFS providers in Bangladesh:

In addition to the regulatory, political, and legal concerns mentioned above, MFS providers in
Bangladesh also face challenges such as:

• A lack of financial literacy: It may be challenging for many people in Bangladesh to use
MFS since they lack a fundamental grasp of financial services.
• The low penetration of smartphones: The potential reach of MFS is constrained by the
fact that only around half of Bangladesh's population has a smartphone.
• The high cost of data: Since data is costly in Bangladesh, using MFS services may be out
of reach for many.

Despite these obstacles, Bangladesh's MFS market is expanding quickly. The restrictions are
intended to safeguard consumers and encourage innovation, and the Bangladeshi government is
supportive of the growth of MFS. These issues will probably be solved as the sector expands.

Competitive Environment

For a competitive environment, porter’s 5 forces model can be conducted to analyze the industry.

Threat of new entry: Even though it was previously difficult for new companies to break into
the market, the likelihood of new entry is still low today. This is because there are numerous
rules and regulations that must be upheld, and because existing businesses have already
dominated the market, new entrants feel under pressure. Nagad and MYCash are BKash's newest
rivals, and they were able to attract attention thanks to their marketing efforts and affordable
prices. Any new firm requires a lot of money to enter this market, and only Bangladesh Bank can
approve it after assessing the businesses. For banks to receive permission, Bangladesh Bank has
several requirements, including capital sufficiency, cash reserve ratios, financial histories, and
secure IT systems. The already operating businesses have access to all resources, have industry
knowledge, are familiar with certain geographic areas, and have a good understanding of their
target audiences.

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Supplier power: Due to the industry's reliance primarily on the internet, collaboration with
regional mobile network carriers is crucial. Currently, Grameenphone holds 42.5% of the market
share for mobile network carriers, followed by Robi with 30.1%, Banglalink with 22.2%, and
Teletalk with 3%. There are no alternatives to the
three businesses that control the mobile network
market in terms of negotiating strength.

The IT infrastructure is crucial for mobile

banking, but because local and international
providers both serve the industry, there is little
leverage in negotiations. Its technology is a
crucial prerequisite for the mobile banking sector, and while there are numerous alternatives,
there are few substitutes for IT systems. Still, established businesses use reliable IT systems for
their operations.

In this sector, investors also play a significant role, and the money they contribute greatly
benefits the businesses. The investors have significant negotiating leverage since they have
access to alternative investment opportunities and will only invest in mobile banking firms if
they can demonstrate significant potential future profits. If the investor does not get what they
were promised, they may withdraw their money and, if they run out of money, the Bangladesh
Bank may not even give them permission to carry on with their operation.

Threat of substitution: The standard physical banking procedures, bank transfers, microfinance
services, and unofficial payment systems can all be used in place of mobile banking. Because
customers still feel secure using traditional banking methods, traditional banking services pose a
serious threat to mobile banking. The residents of the city have easy access to more than 100
branches and more than 56 scheduled banks.

Other alternatives to the industry could be the Western Money Union, a company that specializes
in international money transfers, or the microfinance sector, which offers financial services on a
small scale to people who cannot access them in rural areas.

Buyer power: Customers in the mobile banking sector are mostly Bangladeshis and companies
that utilize these procedures to accept payments from their own clients via apps. The only

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business that people in Bangladesh have been able to access is BKash. The cost of switching
mobile service providers is also relatively cheap, which means that rural residents' negotiating
power is not particularly strong. However, in cities, things are different since there are more
possibilities. The price for each exchange for cash in and out purposes has been established by
the Bangladesh Telecommunication Regulatory Commission (BTRC) at 2%, and for the smallest
number of exchanges in mobile banking, it is Tk. 5.0. Along these lines, not exclusively are the
administrations delivered normalized, the exchange costs are fixed, giving mobile banking
operators no room to make any extra profit, this gives business extraordinary control over which
company to decide to do their exchanges, which will be of a more noteworthy amount of money,
at that point that made by many clients

Competitive Rivalry: The competitive rivalry is very high in this industry. The industry has
many companies like BKash, Nagad, Rocket, MYCash but BKash has been holding the market
share since the beginning. Nagad is one of the newest MFS companies to entry in the industry,
but It was an instant successful in capturing a large customer base and gained market share. For
this business, the market growth rate was consistently high and reached double digits in 2013. As
a result of the businesses' ongoing need to invest in technology to continuously elevate the
customer experience, this sector has a disproportionately high fixed cost. All businesses in the
sector have a significant sunk cost since they must train their staff. Since no consumer is devoted
to a single provider in this industry, switching costs are relatively high. Nowadays, everyone has
many mobile banking applications, and they utilize them based on the marketing campaigns
other businesses are running. There are no distinguishing qualities about the businesses that may
draw customers. It all comes down to brand recognition, coupled with tactical and strategic
choices made along the route to obtaining an advantage in this market.

According to the results of the Porter's 5 forces analysis, the sector is at a mature stage and any
firm may participate, but they must have a significant amount of money and apply in accordance
with the laws and regulations.

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Key challenges facing the industry

The mobile financial services (MFS) industry in Bangladesh has grown rapidly in recent years,
but it still faces a number of challenges. These challenges include:

• Low financial literacy: Many people in Bangladesh, especially in rural areas, lack the
financial literacy to understand and use MFS services. This can lead to problems such as
overspending, fraud, and financial exclusion.
• High transaction costs: The cost of MFS transactions is still relatively high, especially for
small amounts. This can discourage people from using MFS services, especially for
everyday transactions.
• Lack of competition: The MFS industry in Bangladesh is dominated by a few large
players, such as bKash and Nagad. This lack of competition can lead to higher prices and
poorer quality of service.
• Security concerns: There are concerns about the security of MFS systems. This is a major
barrier to adoption, especially among businesses and organizations.
• Government regulations: The government of Bangladesh has imposed a number of
regulations on the MFS industry. These regulations can be complex and burdensome, and
they can discourage innovation.

In addition to these challenges, the MFS industry in Bangladesh is also facing the challenges of
the COVID-19 pandemic. The pandemic has led to a decline in economic activity, which has
reduced the demand for MFS services. The pandemic has also disrupted the supply chain for
MFS, making it more difficult for operators to provide services.

Despite these challenges, the MFS industry in Bangladesh has the potential to play a major role
in financial inclusion and economic development. The government and the private sector need to
work together to address the challenges facing the industry and to ensure that MFS can reach its
full potential.

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Here are some quotes from local Bangladeshi bank CEOs or their executives about the
challenges facing the MFS industry:

• "The biggest challenge for MFS is financial literacy. People need to understand how MFS
works and how it can benefit them." - Shakil Rizvi, CEO of bKash
• "The cost of MFS transactions is still relatively high. This needs to come down if we
want to see more people using these services." - Syed Mahbubur Rahman, CEO of BRAC
Bank
• "The lack of competition in the MFS industry is a problem. This can lead to higher prices
and poorer quality of service." - Mohammad Monirul Islam, CEO of SureCash
• "Security concerns are a major barrier to adoption of MFS services. We need to do more
to address these concerns." - Mashrur Arefin, CEO of Nagad
• "The government regulations are complex and burdensome. This can discourage
innovation in the MFS industry." - Mohammad Shamsuddin, CEO of Upay

These quotes highlight the challenges that the MFS industry in Bangladesh is facing. However,
they also show that the industry is committed to addressing these challenges and to making MFS
services more accessible and affordable for all.

In order to overcome these challenges, the MFS industry needs to focus on the following:

• Reduce transaction costs: The cost of MFS transactions needs to come down in order to
make these services more affordable for everyone. This can be done through economies
of scale, competition, and government subsidies. Economies of scale can be achieved by
increasing the number of MFS users and transactions. Competition can also help to drive
down prices. Government subsidies can also be used to make MFS services more
affordable for low-income people.
• Increase competition: The government needs to create a more competitive environment in
the MFS industry. This can be done by removing barriers to entry and by ensuring that all
players are treated fairly. A more competitive environment will lead to lower prices and
better services for consumers.
• Address security concerns: The MFS industry needs to address the security concerns of
users. This can be done through the use of strong encryption, fraud detection systems,

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 and other measures. Security is important because it helps to protect users from fraud and
other financial losses.
• Streamline regulations: The government needs to streamline the regulations for the MFS
industry. This can make it easier for operators to comply with the law and to innovate.
Simplified regulations will make it easier for new MFS operators to enter the market and
for existing operators to offer new and innovative services.

By following these steps, the MFS industry in Bangladesh can overcome the challenges it is
facing and play a major role in financial inclusion and economic development.

Here are some additional things that the MFS industry can do to overcome challenges:

• Partner with banks and other financial institutions to offer more comprehensive financial
services.
• Expand into rural areas where there is a lack of access to traditional financial services.
• Develop innovative products and services that meet the needs of specific target groups,
such as women and small businesses.
• Invest in research and development to stay ahead of the curve and meet the evolving
needs of customers.
• Build strong relationships with regulators to ensure that the industry is operating in a safe
and transparent manner.

By taking these steps, the MFS industry can play a significant role in improving the lives of
people in Bangladesh and promoting economic development.

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Company’s Steps to Meet Three Key Challenge

Challenge 1: Lack of financial literacy

● Partner with financial institutions and NGOs to provide financial literacy training. Bkash
could partner with financial institutions, such as banks and microfinance institutions, and
NGOs, such as BRAC and Grameen Bank, to provide financial literacy training to people
in Bangladesh. This training could cover topics such as how to save money, how to
manage debt, and how to invest money.
● Use technology to make MFS more accessible. Bkash could use technology to make MFS
more accessible to people with low financial literacy. For example, Bkash could develop
a chatbot that can answer questions about MFS in simple language.

Challenge 2: Low penetration of smartphones

● Partner with mobile phone manufacturers and retailers to promote the sale of
smartphones. Bkash could partner with mobile phone manufacturers and retailers to
promote the sale of smartphones in Bangladesh. This could help to increase the number
of people who have access to smartphones, which would make it easier for them to use
MFS services.
● Offer discounts and other incentives for people to use MFS services on their
smartphones. Bkash could offer discounts and other incentives for people to use MFS
services on their smartphones. This could make it more attractive for people to use MFS
services, even if they do not have a smartphone.
● Develop MFS products and services that can be used on feature phones. Bkash could
develop MFS products and services that can be used on feature phones. This would make
it possible for people who do not have a smartphone to use MFS services.

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Challenge 3: High cost of data
● Negotiate lower data rates with mobile phone operators. Bkash could negotiate lower
data rates with mobile phone operators. This could help to reduce the cost of data for
people who use MFS services.
● Offer data bundles that are specifically designed for MFS users. Bkash could offer data
bundles that are specifically designed for MFS users. This could make it more affordable
for people to use MFS services.
● Work with the government to subsidize the cost of data for MFS users. Bkash could work
with the government to subsidize the cost of data for MFS users. This could make it even
more affordable for people to use MFS services.

In addition to these specific steps, Bkash could also take a more general approach to addressing
the challenges facing the MFS industry in Bangladesh. For example, the company could focus on
building strong relationships with regulators, policymakers, and other stakeholders. This would
help to ensure that Bkash has a seat at the table when decisions are being made about the future
of the MFS industry.

Bkash could also invest in research and development to develop new and innovative MFS
products and services. This would help the company to stay ahead of the competition and meet
the needs of its customers.

By taking these steps, Bkash can help to address the challenges facing the MFS industry in
Bangladesh and continue to grow its business.

Here are some additional thoughts on how Bkash can meet these challenges:

● Partner with banks and other financial institutions. This could help Bkash to reach a
wider audience and offer a wider range of financial services.
● Expand its agent network. This would make it easier for people to access MFS services,
even in rural areas.
● Invest in security measures. This would help to protect users from fraud and other crimes.
● Promote MFS through marketing and advertising campaigns. This could help to raise
awareness of MFS and its benefits.

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 Conclusion
There is a big population in Bangladesh that does not have bank accounts, and mobile
banking has made it possible for them to access a variety of financial services. This has
resulted in new prospects for growth and inspiration. The residents of Bangladesh have
enthusiastically embraced this new technology, as indicated by several reports that have
been carried out. If the businesses in Bangladesh can live up to the expectations of the
public, mobile banking will become a significant success in the not-too-distant future.
Considering the rapid expansion of the economy, it is imperative that the financial sector
likewise expands at a quick pace. Additionally, the development of the nation's economy
will be aided by the provision of financial services like mobile banking. It is also
necessary for it to have additional options that can assist in the expansion of the economy.

An increasing number of individuals from different nations are currently keeping a close eye on
the mobile banking scene and contemplating the benefits that this activity offers. For instance,
bKash has been instrumental in teaching the market about mobile banking and has played a big
role in this way. Increasing one's creative capacity is necessary to meet the demands of
individuals and to differentiate enterprises. Mobile banking is a linked framework that must
function in conjunction with traditional banking techniques. This is since mobile banking assists
banks in expanding their customer base. Concerns about safety, on the other hand, also increase
in proportion to the growing number of transactions.

The Bangladesh Bank is required to play a prominent part in this global market since it is
necessary for the bank to do so.

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References

● BKash company profile, Retrieved from https://www.BKash.com/about/company-profile

● Mobile Banking in Bangladesh. Retrieved from
https://www.businesshaunt.com/mobile-banking-in-bangladesh/
● Mobile Banking Operation in Bangladesh: Prediction of Future. Retrieved from
https://www.icommercecentral.com/open-access/mobile-banking-operation-in-banglades
h-prediction-of-future-1-15.php?aid=37948
● Islam,S,M.(2021). Regulatory oversight in MFS industry. Retrieved from
https://thefinancialexpress.com.bd/views/regulatory-oversight-in-mfs-industry-16125343
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● Ahmed, & Jannat, M. (2015). Factors Influencing Customer Satisfaction of Mobile
Banking Services: A Study on Second-Generation Banks. European Journal of Business
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Vol.7,
No.26.
● Ameen, M. Islam, N. (2018) Factors affecting customer experience in Mobile Banking of
Bangladesh
https://www.researchgate.net/publication/329880836_Factors_Affecting_Customers'_Exp
erience_in_Mobile_Banking_of_Bangladesh
● Donner, J. a. (2008). Mobile banking and economic development: linking adoption,
impact, and use .
https://www.researchgate.net/publication/232947275_Mobile_banking_and_economic_d
evelopment_Linking_adoption_impact_and_use
● Chen, G (2012) The Growth of Mobile Financial Services in Bangladesh. Retrieved from
https://www.cgap.org/blog/growth-mobile-financial-services-bangladesh

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