As a bank, Dutch-Bangla Bank Limited (DBBL) has been able to create sush a brand image that no other commercial banks of the country have made so far. DBBL became the synonym for ‘ATM booth’ in the country and that’s a feat that has been earned through a set of visions and years of hard works.
Abul Kashem Mohammad Shirin, the soft-spoken Managing Director (MD) of DBBL is at the core of taking DBBL where it is right now. Shirin breaks a banking trend of Bangladesh by becoming the first head of IT turns MD- an incumbency usually given to people from general banking background rather than IT.
This visionary banker talks with Fintech about DBBL and how the bank is adopoting with the technological changes in the banking arena.
FINTECH: In the history of Bangladesh, you are considered the first Managing Director of a Bank who came from Technology Platform. You are widely recognized for your contribution in technology, innovation, process reengineering and expansion of distribution network. What is the success story behind it?
AKM Shirin: To be honest, banking is not rocket science. There are some basic things of banking and if you grasp those properly, you will be able to understand the system of banks. The rest depends on your working experience and on your better judgement. On the other hand, the issues related with information technology (IT) are way more complex. If you don’t have expert knowledge and clear understanding, then you will not be able to work in the IT sector.
I believe that the person who possesses technological knowledge can excel in any other professions as well. The advent in technology has lessened the burden on human but at the end of the day it is humans who design programs for the machines. For designing program, you have to understand a system and processes involved in that system from the core. As IT people are involved in designing the program for automation, it gives them a profound understanding of the whole process of business.
Coming from the IT background gives me the understanding of the whole business process. Besides, technology is changing the banking system now. Having a strong footing in the IT sector helps me to understand the changes. I believe this knowledge and understanding helped me to be in this position today.
FINTECH: If that is the case, why we are not seeing more Managing Director of the banks that coming from the IT background or why more Heads of IT are not being made the MD?
AKM Shirin: Having knowledge and understanding of the banking sector is one aspect of getting up in the ladder. There are other aspects too. If you don’t have the support from the senior and top management, then it will not be possible for you to cross the rungs of the ladder of promotion. Suppose you are the head of IT; you stll have DMD, AMD, MD, the Board and finally the Chairman of the Board above you. If you don’t get their support, it will not be possible for you to go up in the hierarchy.
I was lucky because our founder chairman M Sahabuddin Ahmed was a visionary person and he had trust in me. I was able to make him and his board understand that investng heavily on IT will ultimately pay in spade. Unfortunately, the senior management was very reserved and reluctant about this but because of our chairman we were able to make those investments and become successful.
I cannot speak for other banks but I can tell you that the senior management including the MD, AMDs and DMDs usually move in a conservative way. They think that they are going to be in that position for few years, so instead of taking risks, they should go for the safe and secured paths. As they usually have the ears of board and the owners, it’s hard for the head of IT to pitch ideas to the owners bypassing them. DBBL’s case was different.
“To further improve our customer service, we have introduced other facilities in our booths. We named those booths Fast Track. We take deposit in those booths. We even have dedicated officers there who aid customers in geting banking services. The customer can get their balance statement and card service from those Fast Track booths too.”
FINTECH: Most of the banks have considered IT section as a costly investment rather than a revenue generating wing. You have changed that notion and transformed DBBL’s IT into a revenue generating section. How you have made it possible?
AKM Shirin: Investment on IT doesn’t have immediate return. If you ask the board or senior management to invest Tk 100 crore in the IT section, they will think that such large investment is not going to give them return in short time. So they will show their reluctance in doing so. Another problem is that most of the MDs and DMDs don’t understand properly how the IT section is being run. They think in a different manner.
You have to convince the senior management and the owners about the long term benefits of investing on IT because in the long run, it pays off big time. It lies on your persuasion power and the compassion of the board and senior management. In DBBL, I had been able to give them a picture. I had shown them the business case on investing in IT.
Bank takes money as deposit from the customers and gives that money as loan to the entrepreneurs. If we want to give Tk 100 loan, we have to have Tk 120 deposit. The usual way of getting money is in the form of Fixed Deposit Rate (FDR). The problem with FDR is that it is very expensive for the bank. If we bring Tk 100 of FDR, we have to give customers Tk 110 per year against that Tk 100. On the other hand, if we loan this Tk 100 to any entrepreneurs, then we are getting Tk 114 in return. So basically we are getting Tk 4 per Tk 100 when we have FDR. Out of this Tk 4, there is at least Tk 2 worth of expenses in rent, salary and others. So the net profit is Tk 2.
On the other hand, if we have deposit in the form of current or savings account from the customers, then we have to give back Tk 105 against Tk 100. So the net profit rises by many times. Now to motivate customers in keeping money in the current and savings account, you have to give them services and conveniences. Also you need to have a large customer base; otherwise you will suffer from liquidity crisis.
There comes the investment in IT. You have to build large chain of ATM booths so that the customers can draw money at any given time. If the customers know that a bank account in DBBL gives them the option to draw money anywhere, any time, they will bank with us. It lessens our consumer cost by 80% and thus lessens the cost of fund. Besides, this increases our customer base the small sum of money which they deposited here ultimately becomes a big amount.
FINTECH: DBBL has the largest ATM network in the country. How does the bank manage this large network? There is common a complain among the customers that many DBBL booths don’t have money or the networks in many booths don’t work properly. How does DBBL respond against those complaints?
AKM Shirin: DBBL has 2705 ATM booths across the country out of which 515 are fast track booths with multiple facilities. All of the booths are connected to centralized server. We have dedicated a pool of officials for the maintenance and monitoring of all the booths.
When we first started laying our ATM network, we didn’t know about what sort of problem we might face in the future. Pretiy soon, we learned that if we establish one ATM machine in one particular point, then there might be problem because ATM is a machine and machine can have technical problems including disruption in the communication link. Some mties the machines run out of money because of large number of customers. Besides, in a traffic-clogged city like Dhaka, it takes one or two hour to deliver money to a booth if money in any machine in that booth runs out. To tackle the problem, we had started putting several machines together in one point; so that even if one machine faces technical difficulty, customers will be able to draw money from other machines. We now put multiple machines in one booth.
To further improve our customer service, we have introduced other facilities in our booths. We named those booths Fast Track. We take deposit in those booths. We even have dedicated officers there who aid customers in geting banking services. The customer can get their balance statement and card service from those Fast Track booths too. Even a customer can facilitate opening an account from there. He can take the necessary forms and assistance from our official there to open an account. The account then can be opened from any branch.
We have learned through trial and error. We have gained experiences through our operations and customer feedbacks and we have refined our service in line with those. If there is a central server failure, then customers may fact problem at all of our booths. To overcome that, we have established our second Data Centre besides our first Data Centre and Recovery Centre. This 2nd Data Centre will be in operation from next February. So the complaints that the DBBL ATM machines run out of money or having network problem have significantly lessened in the last couple of years. I wouldn’t say that we have been able to completely eradicate the problem, but I would say that we have improved our ATM service.
FINTECH: What is DBBL doing to bring the unbanked population of the country under banking service?
AKM Shirin: This is one area where we can proudly say that we are doing more than any other commercial banks. I can guarantee you that DBBL has done more for bringing banking service to the unbanked population than any other bank. We have first introduced the mobile banking service in the country to bring unbanked population under banking service. We are still doing mobile banking and I believe we are doing it ethically. Besides, we have introduced agent banking. We have agents in every Upazila. We even have agents at the union level.
FINTECH: There is still huge number of illiterate people especially in the rural areas. What measures are you taking to provide banking services to this segment of Customers? What do you think about digital transformation of banking service?
AKM Shirin: You are aware that the service for the people in rural areas is not the same as the service for the people of urban areas as their requirement and availability of infrastructure differs from each other. There are many people in the villages who are still illiterate and don’t know how to sign a check properly. Now if that person opens an account, how s/he would draw money from it?
So in order to provide service to that person, we have started the provision of mobile banking because there you just need to have the pin; you don’t need to sign. On the other hand, there are many people who don’t own a mobile phone. Also people from older generations don’t know how to operate a mobile properly. That’s why aside from mobile banking, we have started the provision of biometric verification. There you don’t have to sign, or use a mobile. You just need to put your finger in a biometric scanner and the verification will be done. (Provided the person has already given his fingerprint earlier). We have at least three outlets in each of the 466 upazilas where we are conducting this biometric verification now.
I think digital transformation is a fundamental change where banks will decide how to learn about, interact with, and serve customer. In that case, we are trying to deliver a seamless experience that’s instant, transparent, personal and relevant. To be successful in digital transformation of service, a bank should analyze customer behaviour, preferences, and choices across channels and devices and based on that analysis, an agile strategy with the use of technology should be planned to develop customer-centric innovation. Bank must think from the perspective of a new customer’s experience & their requirement which will lay on top of existing systems, enabling them to break from the past and truly innovate.
FINTECH: Currently all banks are moving towards Lifestyle banking due to the changing demand of Customers. What do you think about this transformation of banking service?
AKM Shirin: Lifestyle banking refers to providing banking service according to the lifestyles of different people. To provide appropriate lifestyle banking service, you have to understand the lifestyles of different demographic group. The service for the people in village is not going to be the same as the service for the people of urban areas. There are many people in the villages who are still illiterate and don’t know how to sign a check properly. Now if that person opens an account, how s/he would draw money from it? Solving his/her problem will be a proper lifestyle banking service.
Now to give service to that person, we have started the provision of mobile banking because there you just need to have the pin; you don’t need to sign.
There are many people who don’t own a mobile phone. Also people from older generations don’t know how to operate a mobile properly. That’s why aside from mobile banking, we have started the provision of biometric verification. There you don’t have to sign, or use a mobile. You just need to put your finger in a biometric scanner and the verification will be done. (Provided the person has already given his fingerprint earlier). We have at least three outlets in each of the 466 upazilas where we are conducting this biometric verification now.
“I can guarantee you that DBBL has done more for bringing banking service to the unbanked population than any other bank. We have first introduced the mobile banking service in the country to bring unbanked population under banking service. We are still doing mobile banking and I believe we are doing it ethically.”
FINTECH: The issue of cyber security in the commercial banks came to limelight after the heist in the central bank. What is DBBL doing to ensure cyber security?
AKM Shirin: Long before the cyber heist in Bangladesh Bank, we have taken several initiatives to ensure cyber security of DBBL. We have invested a huge amount of money on our cyber security because we have the largest IT infrastructure among the commercial banks of the country. In 2007-2008, we transformed all of our magnetic strip ATM cards into chip based card. It is very easy to clone magnetic strip card. If you buy a certain machine that costs $300, you can copy magnetic strip card and use that like the actual one. This type of skimming incident had happened in Bangladesh. Chip card on the other hand is the only type of card which hasn’t been copied yet and we have been producing that from 2007.
We did that before Bangladesh Bank had asked us to do so. After we started that, Bangladesh Bank asked all the other banks to introduce chip card instead of magnetic strip card. Even now, many of the banks haven’t introduced chip card yet. DBBL also first introduced e-commerce payment gateway and for ensuring security in financial transaction, we invested heavily. When you use a card, you just need to give your card number, expiry date and CVV. Information about all of these is available on the card itself. Now suppose when you eat at a restaurant and give your card to the waiter while paying your bill, it’s not that hard for that waiter to write down that information in a paper and use that later on. This is very insecure. So, from the beginning we had in place a second factor authentication or 2FA in our card. In the 2FA, we give a token to our customer. This token is stored in the mobile phone or in a separate device. The token number is changing in every sixty second. So, if someone needs to do something with your credit card, he cannot do anything with that because without that particular number, no transaction will happen.
FINTECH: DBBL is famous for its CSR activities. Do you think that CSR activities help the bank to create a positive brand image among the people?
AKM Shirin: Our founder chairman Shahabuddin Ahmed has a certain philosophy and vision and because of him, we are this much active with our CSR initiatives. He is the architect behind our bank’s activities. He says that banks earn from people and the money is ultimately of the people’s. So as a bank, we have certain responsibilities of giving back to them for their benefits.
We conduct our CSR activities with long term vision. There is no doubt that the most important thing for the development of a country is education. So to help spreading the light of education, we provide scholarships. Around 30,000 students at any given time of the year are studying across the country with scholarships from the DBBL. The bank spends Tk 100 crore per year to provide these scholarships.
DBBL also sponsors math and physics Olympiad. The Olympiad is conducted in upazila levels and from there we bring the contestants up to the international level. We also provide money in the healthcare sector and infrastructure sector. We build small bridges and culverts in rural parts of the country. We also build schools and hospitals in many parts of the country.
FINTECH: What is your bank’s vision in the next five years?
AKM Shirin: In terms of technological adaptation and social responsibility, we are at the top position among the commercial banks of the country. Besides, we have been able to reach at the hearts and brains of people even in the remotest corners of the country. People at union level know our brand and there is a positive image associated with it. We want to build upon this positive image. We want to expand in the international level. This is not an easy step but we will try to achieve that goal of ours.
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