Focus on digitisation of financial services

The lack of digitisation in the social security system of Bangladesh has become apparent after the outbreak of the Covid-19 epidemic. However, the government of Bangladesh has shown good efforts in promptly containing the economic direness caused by the crisis by introducing various stimulus packages through efficient use of the country's digital and mobile financial services (MFS).

Despite the obvious infrastructural problems, credit goes to the impressive collaboration of both the private and public sectors for the combined efforts towards swift economic recovery.

In fact, during the global crisis, the well-distributed MFS agent network in Bangladesh was favourably positioned for supporting informal, private, and public responses in support of low-income households.

Against this backdrop, it is important that in addition to global leaders such as Rt Hon Jacinda Ardern, Bill Gates, Sundar Pichay, and many respected others, Kamal Quadir, the Chief Executive Officer of Bangladesh's bKash Limited, is attending the Singapore FinTech Festival (SFF) as one of the designated speakers. bKash is one of the largest mobile financial service (MFS) providers in the world today.

It is to be noted that since its inception, Singapore FinTech Festival (SFF) has been championing challenging topics that the financial services industry faces, from financial inclusion to sustainability.

This year, the event goes digital, global and bigger than ever as over 500 speakers taking stage at SFF on December 7-11, 2020. This, coming amid the global pandemic, will bring different communities together to focus on plans on economic recovery by creating a robust infrastructure for digital economy.

Details of the event are available at : https://www.fintechfestival.sg/world-fintech-festival.

Following last year's successful edition, this year, SFF and Singapore Week of Innovation and Technology (SWITCH) has returned as SFF x SWITCH as the world's first week-long round-the-clock, hybrid digital and physical event accommodating attendees from all over the world to reach a global audience.

It is important to note that the Policy Research Institute of Bangladesh (PRI) has been working on the aspect of digital/mobile financial services for a while now.

Their recent policy note titled, 'Reaching Out to the Poor and Needy with Direct Cash Support: Dealing with the Last-Mile Delivery Challenge' suggests employing a practical approach of using digital means to transfer financial assistance to the needy where families may be asked to self-register with the help of their National Identity Card (NID) for the purpose of beneficiary selection.

Several rounds of discussion have taken place throughout the year by PRI directors, Dr Ahsan H. Mansur, Dr Bazlul Haque Khondker and Dr M.A. Razzaque, who have been articulating the significance of DFS/MFS in the journey of Bangladesh's economic progress and recovery.

Despite the recent efforts on increasing access to digital services, there remains the issue of digital divide in the country.

Dr Razzaque recently mentioned that "between 2011 and 2016, the gap between the financial inclusion of women has increased by 11 to 29 percentage points. One of the obstacles is the limited expansion of women's ownership of mobile phones."

He further mentioned that, "women as a recipient of a family should be given priority in providing assistance. There is a lot of evidence in various studies that women take advantage of the authority to use income or resources, which provides opportunities for greater well-being for children and older members of the family."

The significance of interoperability has also been echoed by PRI during various discussions. While some form of interoperability is noticed in the digital services sectors of Bangladesh, a universal gateway for greater financial interoperability, connecting all platforms and payment mechanism throughout the economy, is what the aim should be.

In a recent virtual discussion, Dr Mansur spoke of the three major components that have been identified for the facilitation of financial interoperability. These are (i) technology adaptation; (ii) developing a business model; and (iii) governance and regulatory factors. To develop an adequate level of financial interoperability, all three components need to be properly addressed.