SIM re-registration to boost mobile financial services: analysts

The introduction of biometric fingerprints for SIM re-registration and information verification will bring safety, curb fraudulence and ultimately boost mobile financial services (MFS), said analysts at a discussion yesterday.

Authentication was the main challenge for MFS in Bangladesh, and after completion of the SIM re-registration process, the sector will see new investments flow in.

Experts also emphasised establishing interoperability systems for MFS services, which will allow any MFS account holder to make transactions with bank accounts. They spoke at a roundtable titled ‘Mobile banking: prospects and safety’ organised by leading Bangla-language newspaper Prothom Alo at its office.

“For ensuring safety, taking thumbprints is an appropriate initiative,” said Khondkar Ibrahim Khaled, a former deputy governor of Bangladesh Bank.

The MFS sector plays an important role in financial inclusion, but customers have lots of complaints and both the banking regulator and telecom regulator need to introduce complaint registration systems to address the issue, he said.

“When any service expands quickly, it creates risks as well.” Currently, there are 13.11 crore active SIMs in the market and more than 3 crore MFS accounts.

Khaled said mobile operators can join the MFS sector as a partner, but it should be a bank-led model, and both banks and mobile operators should take initiatives to strengthen security.

He said adoption of new technology also creates new challenges, especially in the banking sector, for a lack of trained people. “We learned a lot after the central bank incident.”

Kazi Azizur Rahman, chief information officer at City Bank, said within six months to one year, after the completion of the re-registration process, the industry will get a clean image. “It is my assumption that new investments will come after getting a fresh database of SIMs that has no fake users.”

There are currently 24 commercial banks that have approvals for MFS; of those, 18 launched the service though only four to five have a notable footprint in this field.

TIM Nurul Kabir, secretary general of Association of Mobile Telecom Operators of Bangladesh, said after SIM re-registration, fraudulence will come down.

Mobile operators have the expertise of using secure technologies and have invested huge amounts in this sector in the last 20 years, he said. They are the legitimate partners of MFS, he added.

Md Abul Kashem Khan, executive vice president and head of mobile banking at Dutch-Bangla Bank Ltd, said authentication was the main challenge in this sector, and after the SIM re-registration is completed, it will be over.

He also emphasised users' awareness, which he said will help bring maturity to the market within the next few years.

In 2015, total transactions through MFS were Tk 157,773.31 crore, according to a central bank report.

Reyad Hasnain, Bangladesh Country Manager of Mahindra Comviva, said the Bangladeshi market already crossed the foundation stage and is between the foundation and evaluation states.

According to his suggestions, if the regulator introduces interoperability, it will take the next five years to become a mature market.

Prajna Paramita Saha, a joint director of Bangladesh Bank, said they are currently busy with some internal issues, and after introducing internet banking, they will go for interoperability.

Lt Col Mohammad Zulfikar, a director of Bangladesh Telecommunication Regulatory Commission, said the SIM registration process will be a milestone for the MFS sector.  The industry now needs appropriate policies, he added.

“Interoperability is a must and it should not be bilateral, it needs to be open for every MFS operator.” Md Shahadat Ullah Khan, chief executive of Sure Cash, and Rasheda Sultana, senior specialist of financial services at Grameenphone, also spoke at the discussion moderated by Abdul Quayum, associate editor of the Prothom Alo.