State owned banks have launched initiatives to truly turn digitized banking procedures on the brink of situation emergence from Covid-19 which demand human presence less banking.
Most of the government banks and financial institutions are setting strategy to transform their banking regime from physical presence to internet and mobile banking, source said.
The bank CEOs in a meeting with Financial Institutions Division Senior Secretary Md Ashadul Islam recently expressed their move to turn traditional counter based banking services into IT based banking on the new situation.
The Banking Secretary gave them green signal asking to prepare details road map on that particular proposal from each bank’s separately.
“Characteristics of banking service will have to be changed, the idea of 10 am to 6 pm banking time also to be shifted to 24/7 banking,” described by Mohammad Shams-Ul Islam, Managing Director and Chief Executive Officer of Agrani Bank Ltd with Secretary Ashadul Islam during the meeting.
“The state owned banks have to be introduced an uniform IT platform within a cooperation among us. The state owned banks should launch a single software so that such cooperation could be meaningful,” Mr. Shams-Ul Islam added.
Md. Abdus Salam Chief Executive Officer and Managing Director of Janata Bank Limited said if the state-owned banks cannot introduce IT enabled internet and mobile banking, the government banks will not able to survive in the coming reality.
Kazi Alamgir, Managing Directors and CEO of Bangladesh Development Bank Limited (BDBL) said in future there will have no ATM card system for which the BDBL is going to introduce a complete digitized banking regime.
“A truly digitized financial system requires a secured, contactless, and converged financial platform. This platform should be flexible enough to include new technologies like blockchain and artificial intelligence-based customer intelligence.,” Mamun Rashid. Managing Partner, PwC Bangladesh told Bsuiness Mirror.
For the users, it means ease of usage, fluid transfer of funds, and greater flexibility in payment methods, he said adding and for the service providers and merchants, it means less redundancy, greater security, and harnessing strategic partnerships for better customer services.
The journey towards a fully digitized financial service system needs to be supported by an appropriate digitization roadmap from regulatory authorities. This roadmap should address issues like infrastructure improvement, incentivizing digital payment for the right audience, and partnering with key players in digital finance space.
As mobile banking is gaining traction, traditional banks are struggling to adapt to the new reality where physical in-store interactions are no longer the status quo.
“Prior to mobile banking obviously online banking had somewhat of an impact, but I think we’re seeing a greater impact with mobile,” said David Albertazzi, senior analyst at Aite Group, Boston. “It’s starting to force banks to rethink their retail branch infrastructure. They are moving basically from a transactional to a more relationship building model similar to what you’ve seen in the retail industry.
“I think it’s more about rethinking your retail strategy and it’s about right-sizing, not necessarily downsizing the branch, even though there are some shortcuts here involved, but I think it’s more about rightsizing the branch infrastructure,” he said.
According to Bangladesh Bank data, 87% of bank branches in Bangladesh are online and 8% are partially online, meaning 95% of bank branches in Bangladesh can do online banking. While 95% online coverage for bank branches is an impressive number, statistics are meaningless without proper context.
So, when we know that according to financial inclusion insights, only 35.3% of the Bangladeshi population has access to banks, then the 95% availability of online banking is certainly not enough coverage for digital financial services and financial inclusion.