Mobile banking or m-banking facilitates mobile phone users to access fundamental financial services even when they are miles away from their nearest branch or home computer. This financial service is emerging as a vital and contemporary tool for financial inclusion with the intent to alleviate poverty and uphold the standard of life worldwide, particularly in the emerging and developing countries.

These financial services are classified as pull and push transactions based on information flows. The core mobile financial services includes the transaction services like funds transfer, bill payment, share trade and check order in the form of pull command whereas the inquiry services like minimum balance alert, credit/debit alert and bill payment alert in the form of push command and account balance inquiry, account statement inquiry, check status inquiry and transaction history in the form of pull command. 

In many parts of the globe, such as the Philippines, Brazil, India and Africa, mobile financial services are tremendously flourishing. In Bangladesh bKash, a sister concern of BRAC has stared the mobile financial service jointly with the telecom service providers Grameenphone and Robi which will take the financial inclusion strategy adopted by Bangladesh Bank, the central bank of Bangladesh, to the next stage through m-banking.

Moreover, other telecommunication service providers will be integrated in the platform to enhance the m-payment services in near future. Some other banks are delivering the m-banking or m-money services through the Banglalink and Citycell cellular operators to bring poor people from remote areas under smart banking service. 

The banking industry in Bangladesh has shown a remarkable growth, but there are concerns that banks have not been able to include vast segment of the population, especially the underprivileged sections and rural people into the fold of basic banking services. There are 10 barriers identified in a working paper of Bangladesh Bank, including poor banking infrastructure, lack of proper documentation, and poor level of technological infrastructure to financial inclusion in Bangladesh.

With the application of modern mobile technology which has almost 100 per cent network coverage nationwide and the widespread number of branches of banks in Bangladesh, the un-banked people (48.49 per cent in terms of deposit accounts) can be brought into the banking channels. 

The mobile financial service will be a competitive and cost-effective strategy for the rural banking services which can reduce the operating cost of SMEs and agro-based financing towards the cost-effective and improved quality output in the agriculture sector. 

Moreover, promoting technological innovation, particularly the mobile based services as a means, could expand the financial system access and use. Recent data show that number of mobile phone subscribers and tele-density have been increasing substantially over time creating an opportunity for banks and micro financial institutions to use the mobile technology in the financial services.

This approach can serve un-banked people with affordable costs especially in the rural areas and boost the rate of overall financial inclusion. Furthermore, the higher dependence of small and marginal farmers on non-institutional sources can be reduced significantly to achieve wider coverage of financial inclusion in Bangladesh. 

There are several aspects that can be addressed for the overall growth of mobile financial services in Bangladesh. First and foremost, there is a huge need of mobile banking for faster and in large scale financial inclusion with the incorporation of rural banking services. Second, more banks are rolling out mobile banking solutions, paralleling a move by major mobile phone service operator to upgrade their networks to deliver faster data speeds.

At the same time, people are investing in more advanced especially the urban people are adopting toward the advanced mobile devices which may help the banking sector to provide them the modern sophisticated products and services. 

As the mobile financial services require partnership with telecom service provider, the financial institutions should properly keep eyes on the implementation competence, financial soundness, business reputation, security and controlling capacity and many more of the telecom operators. 

There are incredible uptakes of mobile phones, a large number of un-banked or under-banked people in Bangladesh and a vast number of population lives in rural locations with very little access to banking infrastructure. All these issues have created a good prospect to expand the mobile financial services here in Bangladesh. On the other hand, the financial institutions have been on a quest to satisfy their customers' need for more convenience and there is high demand from the stakeholders to bring larger scale banking financial service to boost financial inclusion.

So, this is the right time for banks and non-banking financial intuitions to follow the guideline issued on ICT Security for Scheduled Banks and Financial Institutions-2010 by Bangladesh Bank and ICT Act-2006 to address the security issues of mobile financial service prudentially while serving the people for not only inclusion of people in banking fold but also for a good Corporate Social Responsibility. 

Financial Express/Bangladesh/ 8th March 2012