Every cell-phone holder may not have personal computer (PC) but every PC holder has a mobile phone. This reality is putting the mobile banking, ahead of any other type of distribution channels in banking industry. We have a number of infrastructural problems hindering development of our business sector. Considering this reality, banks should opt for branch-less banking, because setting up a branch in the remote areas is expensive. In rural areas, costly banking services will not be welcomed by the target customers. To bring unbanked people under the banking umbrella, the so-called branch expansion will not be wise in the long run. The prudent bank management has already realised this fact and started taking appropriate steps. Let us think about the people of remote areas where running a new branch is costly enough but mobile banking can be there at affordable costs for both the banker and clients. Mobile banking has already proved it wrong that banking is only for the rich.

The banking sector in Bangladesh is now experiencing a perfectly competitive market. With existing 47 plus three non-resident Bangladesh (NRB)-owned banks plus more six new private commercial banks (PCBs) -- the letter two types having already getting the letters of intent from the central bank, the banking sector will face all the more a competitive turf. Undoubtedly, the market is thus going to be tougher reminding everyone of the 21st century's slogan, 'survival of the fittest'. So, now it is time to capture the market. Any sort of dillydally will lead to losing a part of the market share in the end. So, other then going digital, the banks have few alternatives left for them.

In Bangladesh, 83% of the population live with an average income of less than $2.0 a day and access to finance can help in improving their economic situation. Less than 15% of the Bangladeshis are connected to the formal financial system whereas 44% of total population are having mobile phones. Providing financial services using this mobile-phone network can make the service more accessible and cost effective for the vast population of Bangladesh.

There are around 160 million people in Bangladesh, of whom only 13% have bank accounts. By using mBanking platform, a bank can now reach the rural and unbanked population, among whom 45% are mobile phone users. Every such cell phone-user needs banking services, whatever may be the volume of transaction. With capabilities to conduct local and international money remittance, the Bangladeshi expatriates will also be able to easily remit money to the mobile accounts of their families, who can then make their withdrawal of fund from the nearest retailer or cash point.

In the banking sector in to-day's world, mobile banking is a fast growing sector. This has come to improve the level of services rendered through banking system, making the whole affair a stress-free and convenient venture. This can be described as the provision of banking or financial services with the aid of a mobile telecommunication device. The area of services offered under this system of banking may include facilities to perform bank and stock market transactions, to run accounts and to verify customised information.

With the coming of internet services, mobile banking has been made a lot easier. This has created new institutions such as online brokers and wealth managers. This is meant to manage the insignificant aspect of this banking system.

The pace at which this system of banking is growing has witnessed a phenomeoral increase and is now being reckoned as one of the fastest growing areas in the world today. The number of mobile phone users is about to hit 6.0 billion or 87% people of the world. With this technology, banks can offer such services as making fund transfers, receiving online updates of stock prices and other information, or even performing stock trading at customers convenience, even when they are busy with other things. Currently, in places like India, China, Bangladesh, Indonesia and the Philippines, they are known to make full use of the capabilities of their mobile phones in banking. And, in the European countries, the rate is much higher, attracting more and more people.

This type of banking can offer a wide variety of services, ranging from account information, which has to do with alerting the customers on the updates and transactions on their account through their mobile phones. It is no longer a new thing for the people to receive short messages on their phones, informing them of their immediate transactions through their bank accounts. Also, all such services help in making payments, deposits, withdrawals and transfers. In this aspect, one can easily recharge his or her mobile phone through respective bank account and transfer funds through mobile phone to the bank accounts of friends, relatives or siblings. This can also involve transferring to one's own bank account abroad or to a different bank account. The payment of bills can be easily done from the buttons of one's mobile phone.

Mobile banking has an edge over internet banking. In case of online banking, you must have a computer with internet connection. This is a problem in a developing country like that of ours. However, with mobile banking, connectivity is not a problem. You can find mobile connectivity even in the remotest places where having an internet connection is a problem. The number of netizens in Bangladesh is only 8.0 million (80 lakh) which is much less than cell phone users. The number of cell phone subscribers is about 80 million (8.0 crore) in our country. Though number of internet users is increasing as the number of mobile-phone users is going up, it can be easily said that the number of net users can not surpass the number of mobile phone-users. From security aspects also, this is safer than internet banking.

This is simply 'any time any where' banking. You can make transactions or pay bills anytime. It saves a lot of time -- the most invaluable thing in this world. In this age of globalization, people are getting busier day by day. They need to do banking by adopting any easier way that is available. They are busy enough to keep pace with trends of this 21st century. Truly speaking, the existing facilities provided by modern science and technology are making us more inclined to welcome the quickest means of doing anything.

Mobile banking through a cell phone is user friendly and does not require one to be an expert cell phone-user. The interface is also very simple. Not only that, for doing banking over mobile highly configured mobile hand sets are not also necessary. You just need to follow the instructions to make the transaction. It also saves the record of any transactions made.

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, fund transfers etc. You will get a notice as soon as any amount is deducted from, or deposited in, your account.

With effective partnerships and technical choices (which affect customer uptake), it is believed that there is a strong market opportunity to reach the poor people with a broad range of financial services. There are some basic or core strategies that banks may have to follow to promote and protect growth. Mobile phones may support each strategy. Such strategies are reinforcing, but banks may need to prioritize them in order to be able to develop a coherent, focused strategy.

Mobile banking is one of the best means of increasing market penetration. The banks need to go for the underserved population segments, and to facilitate the growth of their total revenue pie. Mobile banking can serve primarily to reduce the cost of deploying customer touch-points into lower income or more remotely located population segments. Mobile-as-ATMs can enable merchants to become cash-in/cash-out points; mobile-as-POS can serve to substitute cash and electronically capture transactions at the store. Mobile-as-Internet-machine can allow customers to transact remotely (sending remittances or paying bills) without having to physically access a service point.

By this latest service distribution channel, the bankers can sell more services to their existing customers. This is very important in this competitive market. For thus, new products that target the unmet needs of the existing customers have to be developed. These new services can help exploit the new functionality available through a mobile phone.

Mobile banking can be the best alternative for those intelligent bankers who prefer retention of most valuable customers to induction of new ones. The interests of roughly 20 per cent of customers who bring roughly 80 per cent of the value can be protected by offering them a quality and breadth of service that will make them less vulnerable to churn. Individual services are rarely unique to a bank, because they are easily replicable. Rather, the important thing is to embed the non-unique services within a unique customer experience. Having an informational and transactional capability in customers' pockets (the mobile-as-Internet-machine), banks may be able to propose new services to their customers in a much more targeted way. Banks also can fully exploit the immediacy of the mobile environment to extend the benefits of control and choice, and hence convenience, across their entire product range.

Cell-phone banking is cost effective. Various banks provide this facility at a lower cost as compared to banking by self. The primary emphasis here has to be put on bottom-line over top-line, growth. Cutting costs is not only about margin: seeking low(est) cost position in the market also should deter competitors from engaging in value-destroying price wars, thereby protecting the revenue base. This is fundamentally about replacing more expensive channels and devices with the cheaper mobile solution.

Running a small business often means travelling to meet clients, participating in industry events and looking for new business. While such kinds of activities can be the key to your business success, they can make it difficult to keep up with your banking - especially if you don't have immediate access to a branch or bank machine. With mobile banking, you can make important financial decisions to manage your cash flow even when you're away from the office. Mobile banking allows you to bank securely, 24/7.

Mobile banking puts you in charge of your finances, allowing you to securely bank from anywhere, anytime. The less time you have to spend doing banking in a branch or in front of a desktop computer, the more time you can devote to building your business and getting in front of clients and prospects. We must not forget that time is money.

In sum, mobile banking has come to stay, providing its customers with an expedient way of banking. This is not, however, without challenges, but they are minimal and can be handled without much stress. The shortcomings in mobile banking can be overcome if the respective regulatory bodies pay due attention to address them properly. Till to date, our central bank is striving whole-heartedly for realising the mobile banking goals and objectives in our country. After all, this type of banking is one of the components of making a digital Bangladesh.

The Bangladesh Bank approved 17 banks for operating mobile banking operation; out of them, eight banks have already launched the service; the central bank has also issued operating rules for the banks in order to build a 'regulatory framework' to provide financial services to the people through mobile banking. Thanks to the central bank for its timely action. Time has come to think about inter-bank transactions through internet banking and mobile banking. For implementing this big job, Bangladesh Bank should coordinate its actives with the Bangladesh Telecom Regulatory Commission (BTRC) as early as possible. Another barrier to mobile banking is that its services are limited within the country's boundary. The concerned authority should ponder over the matter how to address it.

Those days are not far away when even the beggars will take alms and rickshaw pullers will take the fare through mobile banking in lieu of cash notes. What is wrong if that comes true? We should not forget technology is for us and we are not for it. The Almighty has created the whole universe for our benefits only. We just need to enjoy that rationally.

Financial Express/Bangladesh/ 15th April 2012