Published on February 19, 2014
M-Finance Industry of Bangladesh: Global Value Chain (GVC) Analysis Prepared by: Maleeha Tarannum
Macro Economic Overview of Financing in Bangladesh • Only 2.221 banking branches and 1.443 ATM booths per 100 square kilometre • 5.28 banking branches and 1.28 ATM booths per 1,00,000 people Low financial inclusion
Banks Starting Mobile Financial Service Delivery
Global Value Chain Analysis
Dimensions of Global Value Chain Analysis Input-Output Structure Geographical Context Institutional Context Governance
Input-Output Structure Extended
Mobile Banking Value Chain (Bank-led) Design Account Opening Cash In/Out Network E-Money Issuance Deposit Holding Value Added Services Network Channel Account and Transaction Management Key Bank Mobile Network Operator (MNO) Independent MNO Agents Source: (Ahmed, Haque, Iqbal, Ahmed, & Rahman, 2013)
Mobile Banking Value Chain (MNO-led) Design Account Opening Cash In/Out Network E-Money Issuance Deposit Holding Value Added Services Network Channel Account and Transaction Management Key Bank Mobile Network Operator (MNO) Source: (IBM, 2010) Independent MNO Agents
Typical Payment Value Chain Processor Merchant Acquirer/ Gateway Network Bank Alternative Payment Providers Source: (KPMG International, 2011) Consumer
Mobile Payment Value Chain Mobile Software/Platform Provider Technology Provider Mobile Network Operator Source: (KPMG International, 2011) Consumer
Global Mobile Banking Value Chain Technology & Software Provider Account Opening Design Remittance Exchange House E-Money Issuance VAS Recipient Account Key Bank Cash In/Out Agent Recipient Local Network Channel Global Financial Network Global Account and Transaction Management Deposit Handling Local Account and Transaction Management Mobile Network Operator (MNO) Independent MNO Agents Global Global/Local 3rd Party
GVC Governance DBBL bKash IBBL Other Banks Government Customers Service Price Robi Axiata Software Supplier i.e. SAP Revenue Sharing Airtel Banglalink GP Bharti Airtel Orascom Telenor
Global Value Chain Analysis
Value Addition Process: Input-Output Structure
Value Addition Process: Bank-led Model
Industry Life Cycle
Drivers of Change in Industry Involvement of Multinational banks in mobile financial services Value Added Service of MNOs Interest on deposit in virtual account Diversified needs of consumers Involvement of single MNO with several banks Drivers of Change Value added service of Banks
Geographic Spread Factors to consider • Several multinational banks in Bangladesh • Advancement in telecommunication across globe • Active involvment of international development organization in the country • Significant number of workers working outside • Several countries are now allowing migration of workers
Industrial Up- gradation Partnership with single MNO Mobile Financial Service for Niche Market Innovation in term of Value Added Service Value chain led by Development organization Emergence of technological trainer as a partner
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