A Comparative Study on Mobile Financial Services in Bangladesh: Prospects and Challenges

Abstract

Mobile financial services are running remarkably well in the financial system of Bangladesh though it has some drawbacks. The benefit of modern technology has led to a notable improvement in the development of various financial services. Mobile banking, SMS banking, internet banking, mobile money accounts and agent banking are the latest development of the recent years. Bangladesh has experienced significant increase in the number of customer accounts, transaction volume, and transactions values in MFS since its inception in 2011. But there is still room for innovation and diversification in MFS sector in Bangladesh. This study provides an overview of Bangladesh's prospects, constraints and regulation for mobile financial services. The research methodology used in this paper is descriptive in nature and has derived from secondary qualitative and quantitative data. This study finds that MFSs are growing faster in Bangladesh in recent times, but the service should be multi diversified to continue its consistent growth. In Bangladesh, excessive service charges, transaction caps, fraudulent actions using MFS and internet, monopoly of some service providers and lack of appropriate infrastructures are affecting MFS growth adversely. The study may be used by policymakers while designing policies regarding enhancement of mobile financial services, digitalization of monetary sector and promoting financial inclusion in Bangladesh.