Mobile Banking With Islami Bank Bangladesh Limited

March 2012

Bangladesh Demographics:

Population: 150 million% below poverty line: 31.5%% of Urban population: 27%% under age 25: nearly 60%

Banking Infrastructure:

Bank Branches: 7,961ATMs: 3,000 (approximate)Bank Accounts: 55 millionMobile subscription: 98.29 million

Mobile Banking:

Banks licensed by Bangladesh Bank: 10Banks operating Mobile Banking: 5*Mobile Account opened : 1.6 million (approximate)Appointed agents: 36,000 (approximate)

* DBBL, BRAC(bKash), Trust, Prime, MBL

Source: Bangladesh Bank

Bangladesh telecom market

Telecom Industry Contributes ~ 6% GDP Growth

2012 (October) – Mobile Subscribers ~ 98.293 mn

2015 – Forecasts Mobile Subscriber ~ 194.990 mn representing a mobile penetration rate of 110.59%, surpassing the 100% for the first time.

Industry’s average ARPU continue to foresee a downtrend due to intense competition and aggressive pricing tactics from operators to gain market share.

Monthly APRU is < US$ 3…Lowest cost mobile phone service in the world. The fall in ARPU relates to expectations that the prepaid subscriber base will continue to increase as a proportion of the total, a trend that is encouraged by network expansion into rural markets, where three-quarters of the population reside.

Annual Churn Rates are increasing.

Average Minutes Per User is declining.

Plans to transform Bangladesh into a digital country by 2021 are gaining traction after the Bangladeshi government announced plans in September 2010 to implement seven projects at a cost of BDT64.34bn (US$923.75mn).

The seven projects will focus on rolling out next-generation technologies such as broadband wireless and fibre optic cable networks in order to improve Bangladesh's inadequate broadband infrastructure.

Source: IBM

Bangladesh mobile banking marketDBBL bKash MBL Trust Bank Asia

Launch Date May,11 Jul’11 Feb’12 Aug’10 Mar’12

Customer 800,000 770,000 5,000 3,000 112

Agent 18,500 15,000 2,200 329 80

ATM 22,000 100 100 0 0

Branch 123 80 72 71 52

Merchant point 0 23,000 0 0 0

Services •Cash in•Cash Out•P2P•Top up•F. Remittance•Salary•Donation•BTS payment• Merchant payment

•Cash in•Cash Out•P2P•University payment•Donation•Merchant payment

•Cash in•Cash Out•P2P• DPS

•Cash in•Cash Out•P2P•P2B•B2P

•P2P• G2P

• Major players are DBBL and bKash. With highest numbers of agent points and customer base.

New EntrantIslami Bank Bangladesh Limited (IBBL)highest foreign remittance carrier in BD

Islami Bank Bangladesh Limited• Largest carrier of foreign remittance in Bangladesh ( around 30% of total foreign remittance amounting upto USD 3.7 billion)

• Have the largest branch network (246 Branches & 30 SME/Krishi Branches i.e. total 276 Branches)

• Have 253 ATM booth

• Placed among Top 1,000 world banks 2012 list. UK based century old financial magazine ‘The Banker’ published this list analyzing in depth-data & industry’s performance.

• CRISL has reaffirmed the Long Term rating of Islami Bank Bangladesh Limited (IBBL) to ‘AA+’(pronounced as Double A plus)

• Their core banking solution and mobile banking solution is developed in-house. So they have the flexibility to design products and services more competitively than other players such as bKash and DBBL.

SWOT analysis of Islami Bank Mobile Banking Strength

- 30% foreign remittance carrier- Flexible in-house built system .- IBBL own 8 million customer base - Own healthy distribution channel

Weakness- Late entrant

Opportunity- Customer preliminary

education is done- Government allowance

distribution

Threat- In-house built system,

not tested yet

Product Line

• Customer can deposit money to his wallet

Cash in

• Customer can withdraw money from his wallet through IBBL agent points, Branches and ATM

Cash out

• Customer can purchase from a merchant point and pay through their wallet

Merchant Payment

• Customer can transfer money from their own wallet to other account holders wallet

P2P

• Customer can top up their prepaid and postpaid accounts thrugh their wallet

Top up

Business proposition

MNO IBBL

Platform

Retail channel

Training and education

Preserve customer right

Customer Service

USSD Channel

SMS gateway

Market communication

Thanks