remittance innovations and digital finance

8/9/2019 Remittance Innovations and Digital Finance

1/16

Session 4:Remittance Innovations & Digital Finance

Firoz Ahmed Khan

Head of Retail Banking

BRAC Bank, Bangladesh

Forum on Promoting

Remittance For Development Finance18-19 March !1"


2/16

The challenges developing countries face

# $orld%ide, more than &" 'illion ad(lts do not ha)e an acco(nt at a

financial instit(tion

# *nl+ 1 ercent of ad(lts in de)eloing economies ha)e an acco(nt

# .n de)eloing co(ntries, onl+ /0 ercent of %omen ha)e acco(nts,comared to ercent of men&

# Most oor ho(seholds oerate almost entirel+ in the cash econom+,

and mostl+ (se informal ro)iders to meet financial needs 2

# .nsec(re

# 34ensi)e

# Comlicated to (se

# *ffer limited reco(rse


3/16

Seeing the world in a new way

# 8"5 of the %orld6s +o(th 71!-" +ears old li)e in de)eloing

co(ntries

this com'ination co(ld otentiall+ 'e the tool to fight o)ert+

!"#$

%n

!"'%n

(")$

%n


4/16

The device that can fight poverty

Apollo Guidance Computer

:ecs; K'+te of memor+ < oerated at !&!/MHz

Res(lts; a'le to g(ide astrona(ts across/",!!! km of sace from earth to moon andret(rn them safel+

Nokia 105 Mobile Phone

:ecs; 8 MB of memor+ < oerated at 1!! MHz

=rice; >:? 19

Res(lts; &


5/16

*mpowering the poor via new technology

# ?igital finance holds an enormo(s oort(nit+ for greater

financial incl(sion and e4ansion of 'asic ser)ices& @earl+ "!5

of eole in the de)eloing %orld o%n a mo'ile hone&

# he challenge is enormo(s, %ith &" 'illion indi)id(als and o)er

!! million small '(sinesses lacking access to 'asic financial

ser)ices and credit&

# ?igital finance is a o%erf(l means to e4and access 'e+ond

financial ser)ices to other sectors, incl(ding agric(lt(re,

transortation, %ater, health, ed(cation, and clean energ+&


6/16

Digital Finance: +,-ectives

# Red(cing the amo(nt of time and mone+ that oor eole

m(st send to cond(ct financial transactions

# .ncreasing oor eole6s caacit+ to %eather financial

shocks and cat(re income generating oort(nities

# enerating econom+-%ide efficiencies '+ digitall+

connecting large n(m'ers of oor eole to one another, to

other cons(mers, to financial ser)ices ro)iders, to

go)ernment ser)ices, and to '(sinesses&


7/16

Initiatives for inclusive financing: .o,ile

Financial Services /.FS0

1hy .FS in %angladesh

Agro-'ased li)elihood

Cash 'ased econom+

:ignificant domestic remittance flo%sro%ing (r'anization

*mniresent mo'ile telehone net%ork


8/16

"or current accounts in developing countries#the largest costs are in back-office processing and I

$verage costs# 2%1%

>: ?ollars

1.Customer service

3. Back-office processing

4. I platform ! applicationmaintenance

&. 'upport functions

2. Channel maintenance

otal !-/!

-"

-0

0-11

-"

1-


9/16


10/16

Mone) in Motion


11/16

!! distri'(tors

11/k digital mone+ agents

1" million registered

c(stomers

1&" million dail+

transactions %orth >:E

million

'Kash is a ne% Bengali

verb


12/16

Digital Financial Services: %enefits

# he+ connect oor eole to the formal financial sector and ena'le them

to 'ecome c(stomers and s(liers %ithin the %ider econom+&

# Financial flo%s can 'e acc(ratel+ tracked, res(lting in safer and seedier

transactions as %ell as less corr(tion and theft&

# =ro)iders can (se financial histories to de)elo rod(cts that are 'etter

s(ited to c(stomers6 needs, cash flo%, and risk rofiles&

# ?irect deosits 7incl(ding %ages and go)ernment assistance allo%

mone+ to '+assG the home, heling (sers sa)e rather than send&

# A(tomatic reminders, ositi)e defa(lt otions, and other choices offered

)ia mo'ile hone men(s offer con)enience and sa)e time&


13/16


14/16

Remittance 2 3hannel Distri,ution


15/16

.aret %arriers5overnment Regulations

# .n man+ co(ntries a+ments ha)e 'een considered a financial ser)ice %ith a le)el of riskre(iring hea)+-handed r(dential reg(lations that onl+ 'anks and esta'lished financial

instit(tions are allo%ed to cond(ct

# .n man+ co(ntries the onl+ monetar+ transactions that can 'e handled '+ mo'ile

oerators are those related to reaid to-(, and the sale of digital contents

6nti .oney 7aundering /6.70 and 3om,ating of Financial Terrorism /3FT0

# Mone+ Ia(ndering and Financial errorism are of great concern %ith the emergence of

mo'ile mone+ remittances

# Managing Mone+ Ia(ndering and Financial errorism ma+ add costs and comle4it+ to

this rocess, %hich %ill make it more diffic(lt for ne% entrants to this market to s(cceed

7ac of 8ser *9perience

# $hile the infrastr(ct(re is 'eing '(ilt, m(ch of the h(rdle for imlementation of M-

Remittance %ill 'e on the (ser side& B(t as (sers 'ecome more acc(stomed to this

rocess, M-Remittance %ill to gro% in fre(enc+


16/16

>sef(l links;

%%%&'rac&net

%%%&'rac'ank&com%%%&'kash&com

3-mail address;

firoz&khanJ'rac'ank&com

Than ou
http://www.brac.net/http://www.bracbank.com/http://www.bkash.com/http://www.bkash.com/http://www.bracbank.com/http://www.brac.net/

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