Mutual Trust Bank going big digitally

Mutual Trust Bank has decided to go big in digital banking to provide services to the tech-savvy clients and bring the unbanked people under the formal financial system, said its top executive.

"As part of the move, we have already materialised various initiatives. The next year will be highly important for us as the bank will implement many digital initiatives," said Syed Mahbubur Rahman, managing director of Mutual Trust Bank (MTB).

Implementing a branchless banking model riding on digital means is the lender's next goal as it has already taken up a plan to set up a maximum of one or two branches per year.

On the occasion of its 21st founding anniversary, the private commercial bank has decided to implement the model by way of setting up more and more agent banking outlets in rural areas instead of establishing full-fledged branches, said Rahman.

The bank has already set up 154 agent outlets under the central bank's agent banking window in rural areas to cater financial services to underprivileged people.

As part of the facilities to provide financial services through different digital modes, the lender's clients are now allowed to transfer funds from their accounts to several mobile financial service (MFS) providers, such as bKash, Rocket and Nagad.

The lender has recently introduced a new platform titled "MEasy", a fully-digitised banking service that provides a cutting-edge and hassle-free digital banking experience.

Through the platform, clients can open new accounts sitting back at their homes.

MEasy has been attached to the bank's mobile phone app–MTB Smart Banking.

Although the ongoing coronavirus pandemic has created a stagnant situation everywhere, the scenario for MTB is quite different as it has put in tremendous efforts to digitise its existing traditional banking system.

For instance, it has launched another digital service–MBOT, which helps clients by way of replying to their questions.

The MBOT is a chatbot, a computer programme that simulates human conversation in interacting with customers through voice commands or text chats or both, costing little to nothing.

It enables attending to customers at all times of the day and week and is not limited by time or a physical location.

The bank's clients earlier had to seek assistance of a call centre to get their problems solved or queries answered at that moment but now the MBOT has added a new dimension to the customer service.

Implementation of a green PIN (personal identification number) has one of the core elements of the lender's latest digital banking initiatives as well.

Green PIN is an interactive voice response-based contact centre which provides an instant and secure PIN generation service for all MTB cards.

Be it anytime and anywhere, a cardholder can generate a PIN for a new card, change an old PIN as well as reset a forgotten PIN.

Cardholders no longer need to visit any MTB branch to place a request for a PIN, nor do they have to wait for a PIN after placing the request; they will get their desired PIN instantly.

"In the past, we made a decorative banking history. During the journey, the lender has gained a magnificent brand image both locally and globally by way of providing multidimensional financial services to clients," said Rahman, who joined the bank in December last year.

The MTB has bagged reputation by ensuring corporate governance.

The management and board of directors have never got involved in each other's jobs that has ultimately helped the lender make the achievement.

The bank always tries to provide all types of banking services, including retail and wholesale banking, to clients keeping up with the demand of time, helping it turn into a full-fledged commercial bank.

"The bank has rolled out almost all financial products on time. As a result, our clients have got the best services from our end," said Rahman.

He earlier successfully served Dhaka Bank and Brac Bank as managing director.

"MTB is not satisfied about what we have done so far. We have a long way to go keeping pace with the latest innovations in the global banking arena. We want to offer all kinds of business solutions," he said.

The bank is now working to discover a new method to give out "nano" or small loans to clients.

"We will be unable to make profit by giving out nano loans as the central bank has set an interest rate of 9 per cent on all types of lending except credit card," he said.

The bank will not manage its desired profit from the nano loan product if it follows the manual approval process.

The credit programme will be implemented within the next year by using the platform of MFS providers and mobile phone operators.

The mobile phone operators store clients' information. The lender will distribute the loan at a faster pace analysing the data compared to the existing timeframe.

"This will widen financial inclusion in the country further," said Rahman, who attained an MBA degree from the Institute of Business Administration at the University of Dhaka.

The lender will train up its manpower such that they cope with the digital banking easily in the days ahead.

The bank will ink more partnership agreements with fintech companies to speed up its digital transformation from the traditional banking.

"MTB clients even will not come to branches to know whether they have got approval to enjoy retail loans and credit cards," Rahman said.

The required information will have to be submitted to the lender's mobile phone app and then MTB will inform clients to this end by analysing the data.

The digital procedure will commence from next year.

The bank has already started to centralise its banking activities, which will fully come into effect next month.

Branches will only process the SME, particularly cottage and small and retail loans.

The whole sanction and disbursement process of corporate loans will completely be accomplished by the head office. Relationship managers will settle the tasks under the guidance of the head office.

Loan disbursement through the bank stood at Tk 18,973 crore as of December last year, up 14.19 per cent from that a year ago. Deposit mobilisation grew 14.91 per cent to Tk 19,094 crore.

The bank, which started journey in October 1999, has geared up its efforts to keep the quality of its assets in good shape.

"We are keeping additional provisioning given the expected credit loss as the central bank has declared a moratorium facility until December this year to tackle the ongoing business slowdown."

Default loan in the banking sector will go up when the moratorium facility ends and the additional provisioning will help strengthen the bank's balance sheet.

Some good borrowers, however, are paying back loans on time despite the ongoing business slowdown.

Rahman also touched upon the ongoing business situation and made some projections on the country's economy. 

"The banking industry has been facing various problems in the last few years. And this type of stress will continue in the days ahead considering the ongoing business," he said.

All stakeholders need to take required measures to protect the banking sector from any unexpected situation.

The country's remittances, exports, imports and foreign exchange reserve are looking good but private sector credit growth is still subdued.

A second wave of the coronavirus pandemic has already hit Europe and North America, which may put an adverse impact on the country's external sector, Rahman said.

Many exporters of the readymade garment sector are facing problems in regaining their export earnings smoothly as they have been forced to reduce the cost of the products as per prices set by the foreign buyers.

In some cases, the foreign buyers are unable to pay the full price of the exported products for the time being and making the payment in phases.

There will be uncertainties in the post Covid-19 period as many businesses may face trouble to make a comeback from the economic hardship.

If businesses enter into the crisis zone, balance sheets of banks will certainly weaken.

Demand for products is still lower than expected as many people have fallen below the poverty line. The spending power of people has gone down alarmingly due to the pandemic.

General people purchase only the essential goods because of the deepening uncertainty that the deadly flu may spread further in the country.

Vaccine is highly important for the country as it will help the economy regain its expected momentum, said Rahman, who started his banking career in 1988.