Didital Banking and Crypto Currency(1).pptx

Crypto related information for bankers

1. Bangladesh Institute of Bank Management (BIBM) Dhaka, Bangladesh. Presented By   Md. Mahbubur Rahman Alam B. Sc. (Statistics) Dhaka University M. Sc. (Econometrics) Dhaka University PGD(ICT)BUET, M. Sc. (ICT) BUET Associate Professor, BIBM, Mirpur , Dhaka. Cell: 01556323244, Mail: [email protected] Digital Payment & Future of Currency: Block Chain, Crypto Currency and other Digital issues

2. Issues to be Discussed Current Status of IT in Banks Impact of IT on Banking Business Digital Payments Crypto Currency Future Banking Challenges

3. Total Branches

4. Total Advance (Crore Taka)

5. Total Deposit (Crore Taka)

6. 6 Kiosk Branch Internet Customer POST PSTN ATM Branch Other Bank Mobile

7. Remote Backup and Restore Data Center WAN Far Disaster Recovery Site WAN Firewall WAN Alternate Data Center (ADC) Near Disaster Recovery Site Firewall Firewall

8. The Ecosystem 61 Banks 210.7 Million Bank Accounts Accounts Per Adult: 3.25 Mobile Phone Operator: 5

9. Delivery Channels 2015 2016 2017 2018 2019 CAGR Total Branches 9453 9,654 9,753 10,160 10,545 2.77 ATMs 7839 9,019 9,522 10,355 10,924 8.65 POSTs 30336 32,953 37,379 45,896 58,527 17.86 Call Center 26 30 35 36 36 8.48 MFS Agent (Millions) 0.56 0.71 0.79 0.89 0.97 14.72 MFS Terminals (Millions) 31.8 41.1 58.8 67.5 79.6 25.78 AB Agent 208 2334 2577 4506 7914 148.36 Sub Branch   -   - -   -   393   -   Web Terminals 1.53 1.53 1.74 2.04 2.47 12.72 Mobile Apps Terminal   - -   -   -     -   Source: Bangladesh Bank Banking Delivery Channels in Bangladesh File: Current Status of IT in Banks Up to 2019.xlsx

10. Total Number of Bank Accounts in Millions (2015-2019) Source: Economic Trends and Financial Stability Report, Bangladesh Bank and BIBM Type of Accounts 2015 2016 2017 2018 2019 CAGR (%) % of Total Accounts (2019) Deposit 76.22 81.43 87.52 95.23 106.6 8.75 42.78 Advance 9.89 10.14 10.57 10.63 10.83 2.30 4.35 MFS Agent Accounts 0.56 0.71 0.79 0.89 0.97 14.72 0.39 MFS Clients Accounts 31.8 41.1 58.8 67.5 79.6 25.78 31.94 Social Safety Net (SSN) Program 3.9201 4.2497 4.5806 5.0622 5.6007 9.33 2.25 Employment Generation Program for the Poorest 2.0416 2.2026 2.2729 2.5792 2.6622 6.86 1.07 Freedom Fighters 0.1914 0.2168 0.201 0.2061 0.2475 6.64 0.10 Farmer's Account 8.9339 9.0436 9.238 9.6868 10.1866 3.33 4.09 Others* 10, 50, 100 Taka Accounts 0.5862 0.7582 0.7771 0.944 1.8232 32.80 0.73 Agent Banking Agents Account 0.000208 0.002334 0.002577 0.004506 0.007914 148.36 0.00 Agent Banking Clients Account 0.097037 0.525144 1.214561 2.456765 5.257769 171.31 2.11 Credit Card Accounts 0.62 0.95 0.91 1.18 1.54 25.54 0.62 Debit Cards 8.62 9.95 11.65 14.3 18.23 20.59 7.32 Prepaid Cards 0.14 0.18 0.14 0.21 0.41 30.82 0.16 SME Accounts 0.7049 0.6067 0.712 0.6608 0.7513 1.61 0.30 School Banking 1.035 1.2574 1.4539 1.8184 1.9929 17.80 0.80 Internet Banking Customers 1.53 1.53 1.74 2.04 2.47 12.72 0.99 Total 146.89 164.85 192.57 215.40 249.18 14.12 100.00 File: Impact of IT Monograph

11. Types of Transactions 2015 2016 2017 2018 2019 CAGR BACPS (Started on 07 Oct, 2010) 22.83 22.2 23.17 23.26 22.4 -0.47 BEFTN (Started on 28 Feb, 2011) 13.76 15.28 18.64 24.8 37.01 28.06 RTGS (Started on 29 Oct, 2015) - 0.22 0.79 0.86 1.85 103.35 NPSB (Started on 27 Dec, 2012) 7.78 10.48 17 24 30.7 40.94 Total Card (Credit Card, Debit Card, etc.) 137.23 170.91 182.16 217.49 253.42 16.57 Internet Banking 6.39 7.76 7.28 9.54 15.23 24.25 Mobile Banking (Started on October, 2011) 1166.1 1473.2 1875.6 2272.8 2589.8 22.08 Agent Banking 0.84 4.2 9.87 22.64 49.46 177.01 ATM 141.95 172.78 184.62 178.27 205.59 9.70 POST 14.08 17.36 21.16 26.02 31.67 22.46 Total 1510.96 1894.39 2340.29 2799.68 3237.13 20.98 Total Number of E-Banking Transactions (In Millions) Source: Economic Trends and Financial Stability Report, Bangladesh Bank

12. Types of Transactions 2015 2016 2017 2018 2019 CAGR BACPS (Started on 07 Oct, 2010) 15501.80 17997.80 20431.70 22946.97 23000.40 10.37 BEFTN (Started on 28 Feb, 2011) 873.80 986.00 1333.60 1722.85 2000.50 23.01 RTGS (Started on 29 Oct, 2015) - 11283.88 20063.90 6674.75 13260.96 5.53 NPSB (Started on 27 Dec, 2012) 45.24 67.99 104.00 155.00 211.25 47.00 Card (Credit Card, Debit Card, etc.) 1030.24 1234.31 1335.53 1549.46 1817.34 15.25 Internet Banking 217.57 307.52 364.82 324.67 649.79 31.46 Mobile Banking (Started on October, 2011) 1772.80 2346.90 3146.60 3788.90 4343.20 25.11 Agent Banking 15.09 73.06 210.34 537.14 1332.93 206.57 ATM 1073.23 1253.62 1357.26 1385.30 1627.41 10.97 POST 120.94 123.92 133.03 150.82 176.77 9.95 Total 20650.71 35675.00 48480.78 39235.86 48420.55 23.74 Volume of E-Banking Transactions (Billion Crore Taka) Source: Economic Trends and Financial Stability Report, Bangladesh Bank

13. OPERATOR SUBSCRIBER (IN MILLIONS) Grameen Phone Ltd. (GP) 79.037 Robi Axiata Limited (Robi) 50.901 Banglalink Digital Communications Limited 35.272 Teletalk Bangladesh Ltd. (Teletalk) 4.927 Total 170.137 OPERATOR SUBSCRIBER Mobile Internet 102.353 ISP + PSTN 9.522 Total 111.875 Mobile and Internet Subscribers Dec 2020

14. Number of ADC Transactions in Crore File: Current Status of IT in Banks Up to 2019.xlsx

15. Number of Accounts Number of Transactions Volume of Transactions Comparisons of ADCs

16. Average Cost Per Transaction (in Taka) World Wide Average Cost Per Transaction (in US $)

17.   Total Transactions Transactions Per Employee (Branch Only) Transactions Per Employee ( Online and Branch) Transactions Per Employee ( Branch, Online and SMS) Transactions from Branch (Deposit, Advance and Others) 170.01 9,837.36 19,775.92 35,981.28 Online Transactions 167.51 SMS (Operations) 167.51 SMS (Monthly and Yearly Balance) 120.40 Total 625.43 To do the same amount of Transactions (Branch Only) we need 4.60 Lac Employees Compared to Productivity of Employees of 1980 4.02 Lac Employees Compared to Productivity of Employees of 1990 To do the same amount of Transactions (Branch +Online) we need 9.86 Lac Employees Compared to Productivity of Employees of 1980 8.44 Lac Employees Compared to Productivity of Employees of 1990 Currently we have 1.73 Lac Employees!

18. Cloud Computing Big Data and Data Analytics Artificial Intelligence Machine Learning Blockchain IoT

19. Fintech

20. FinTech is a new industry that uses technology to improve activities in finance by reducing cycle time and costs of services and by improving the quality of services. FinTech -enabled payments processing will also reduce the amount of cash required for the printing and distribution of currency notes. Additionally, it will help mitigate the risks of counterfeit currencies getting circulated in the country. Reduced requirement of cash will help the central bank reduce costs and manage risks. Fintech

21. Payments banks are particularly useful for people who don't have any bank account but participate in payments activities.  They compete with cash transactions to provide an easier, faster and inexpensive option to their customers. With the right kind of guidelines from the regulators, the payments sector in Bangladesh can grow rapidly . FinTech has the capability to automate traditional financial activities in a significant way. Retail financial activities such as granting of loans or approval of an insurance proposal require verification of the applications using standardised techniques. FinTech can automate these verification processes entirely. Fintech

22. FinTech can help in setting up a robotic platform for financial advisory services where the services are delivered by robotic software, also known as robo advisors.  FinTech is also redefining customer interactions in financial services institutions. Now, customers have the option to chat with their financial service providers online. On FinTech -enabled platforms, chat discussions are facilitated by software robots, also known as chatbots . Similarly, when customers call service centres , their calls get answered by digital voice assistants or humanoid software. Fintech

23. PayPal is a service that enables customers to pay, send money , and accept payments by registering credit card or debit card with PayPal account of customers . Customer can pay by simply choosing PayPal at checkout , logging into your PayPal account, and confirming payment . China: Alipay - the world’s leading third-party payment platform. Fintech

24. In India, SERV’D, which is building an app that helps households and the informal workers they employ (e.g ., nannies, drivers, cooks , delivery services) create simple formal work contracts and pay them online. CreditFix is tapping into the data accumulated from Uber and other ride-sharing companies on their drivers ’ incomes to lend to Pakistani drivers , allowing them to own their auto-rickshaw or taxi and to go into business for themselves rather than work as employees. Bangladesh Post Office in collaboration with Fintech company Dmoney announced a new digital wallet service called Daak Taka. Fintech

25. “Will the traditional banking fall with the advent of Fintech ?” What about TechFin and RegTech ?

26. Blockchain

27. Crypto Currency A  cryptocurrency  (or  crypto currency ) is a digital asset designed to work as amedium of exchange  that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.   Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems. The underlying technical system upon which decentralized cryptocurrencies are based was created by the group or individual known as Satoshi Nakamoto .

28. Strategic Model

29. Strategic Model Source: Eusebio and Hartmut

30. Opportunities High Potential Market New Products and Services Cashless Society Financial Inclusion Remittance Channeling Cost and Time Reduction Geographical Independence E-Commerce/M-Commerce Apps Based Banking Financial Inclusion Round the Clock Service Branchless Banking Revenue Earning Business Diversification Green Banking GDP Growth Tax/VAT Identification and Collection New Employment

31. Challenges Investment Less Cross Selling Security and Governance Fraud Prevention Monitoring Misuse of Channel Power Failure Internet Infrastructure Dispute Management Awareness Development Lack of Skilled IT Professional

32. Bangladesh Institute of Bank Management (BIBM) Dhaka, Bangladesh. Thanks for Patience Hearing Md. Mahbubur Rahman Alam Associate Professor, BIBM