MFS reshaping economic landscape

Mobile financial services (MFS) have revolutionised the financial landscape in Bangladesh, providing greater access to financial products, convenient payment options, and streamlined commercial transactions. However, the sector faces challenges, particularly in terms of fraud and security breaches.
Fraud in mobile financial services takes place in various forms, such as stolen PINs, illicit transactions, data and e-money theft during SIM swaps, SMS spoofing, fraudulent calls/emails, and compromises to customer security and privacy. These risks stem from weak app security, limited digital literacy among users, complex redressing methods, and inadequate data governance and privacy regulations.
To tackle these risks, MFS providers must prioritise enhancing app security. This can be achieved by implementing encryption and authentication mechanisms with multiple factors. Additionally, providers should regularly deliver security upgrades to protect against data breaches and hacking attempts. Educating consumers on safe mobile banking practices is another crucial aspect of mitigating fraud risks. Users should be informed to rely on verified pages on social media platforms and to exercise caution when engaging with online content. By promoting digital literacy and awareness, users can become more vigilant and better equipped to identify and avoid fraudulent activities.
Furthermore, establishing clear and effective issue settlement systems is essential in addressing consumer complaints promptly. By implementing efficient conflict resolution mechanisms, MFS providers can build trust and confidence in the system, ensuring that consumers feel supported and protected in the event of any fraudulent incidents.
In addition to these measures, MFS providers must enforce stringent data protection and privacy regulations. Regular data audits should be conducted to identify and address vulnerabilities, while secure storage techniques should be adopted to safeguard sensitive information. Moreover, data sharing should always be based on explicit consent from customers.
As mobile banking services continue to gain popularity in Bangladesh, it is crucial to address fraud threats and strengthen security measures. By enhancing technological security measures, increasing digital literacy, establishing transparent redressing procedures, and adopting robust data governance and privacy regulations, we can create a safer and more trustworthy environment for mobile financial services. Collaboration among MFS providers, regulators, and law enforcement agencies will be instrumental in establishing a resilient mobile financial services ecosystem that supports consumer trust and facilitates continued growth of the industry.

Jarin Tasnim
BBA Department
North South University
[email protected]