If ‘financial technology’ or ‘fintech’ is the upcoming blockbuster, then bKash, Bangladesh’s poster boy of fintech on July 13, this year has chosen an appropriate theatre to release its trailer-an auditorium full of enthralled finance majors.
What some 400 students of Finance on that day had learned from seasoned professionals, academicians and practitioners of fintech in the tastefully decorated auditorium of Independent University of Bangladesh (IUB) was something which usually couldn’t be found in the pages of their textbooks.
And they enjoyed every bit of it. Fariha Nesar, a final year student of Finance in IUB said, “I knew about fintech and I knew about bKash. But I did not know how bKash had started its journey in Bangladesh. It’s inspiring to know.”
The main purpose of the Finance Roadshow titled ‘Fintech: The Bangladesh Story’ organized by bKash in IUB was not to tell just about its success story, rather the main purpose was to provide a hint that ‘fintech’ is the future and it’s going to happen soon.
At the beginning of the program on that day, Prof Dr. Sarwar Uddin Ahmed, Dean of the School of Business of IUB delivered the welcome address and pointed out an important fact about Bangladesh’s banking and finance industry.
He said, “There are many people in our country who is not covered by any banks or any institutions but they have one single thing with them; that is their mobile phones.” He said that Bangladesh is a country with the highest proliferation of mobile phones. “And that’s something which you can transform into a game changer in banking and finance industry. This is because with mobile phone, banking and financial services could be reached at people’s doorsteps.”
With his speech, Dr Sarwar set the stage for the having an understanding of the fintech services.
Familiarizing with the nomenclature Sayeed Nasir, General Manager of Organizational Development of bKash then took on the stage to provide a brief introduction of how the two terms ‘finance’ and ‘technology’ are connected and how bKash as a brain child of these two has developed over the years.
He started with a story of his own. “Do you know what subject I was always scared of? It was finance” the audience was supposedly surprised to hear that. I was just happy to get through my study and be done with it but luck brought me back to finance in my job place,” he explained.
He then went on explaining the basics of finetch. He also shed light on bKash’s development over the years and talked about what sort of work is being there to take banking service to the unbanked population of Bangladesh.
After his speech, Nofel Wahid, Deputy General Manager, Products & CLM of bKash talked about a brief history of fintech. He said that the connection between finance and technology can be traced back to the first generation internet based ecommerce platforms of 1990s
The first problems were faced by tech giants like Amazon and Ebay of USA. When they started as first generation pioneers of e-commerce service, they realized that the people visiting in their websites are not scoring a lot of sales because there was no scope of making digital payment at that time.
People used to buy products and made the cash payment through the postal service of USA. And there lied the difficulty. They felt the need of a convenient way of transferring money because cash handling soon became their Achilles Heel.
The introduction of fintech service PayPal solved their problem in no time. “Do you know who this man is? Wahid asked the audience, pointing out a photo of one of the founders of PayPal. It was Elon Musk who came up for the first time with a solution to offer to the ecommerce pioneers of that time.
“So if you are only a finance graduate, you are under threat”, said Wahid addressing the young finance majoring students, “You need to add computer engineering with it because it is only then when the difference can be seen,” he said jokingly.
Joking aside, he went on talking about payment authentications, payment of API, two factors authentication and more. He told the audience not to think that fintech services is only limited to the rich countries.
“Fintech was first introduced in Africa 15 years back. They were always seen sending flexi to one another and the idea came to them that whether they can transact money with their mobile phones”, said Wahid.
Later a university student came up with a program which allowed people to send money through mobiles. So the low cost mobile transaction first started in Kenya, not in any developed countries, said Wahid.
THE BKASH STORY
After Wahid, Adnan Mehdi, Head of Treasury of bKash took on the stage and talked about bKash’s history. He said that bKash had started in Dhaka and it started with a story of a fisherman.
Kamal Quadir, the CEO of bKash once went to the fish market. The fish seller wanted to sell a fish at Tk 6000 but he was compelled to lower the price.
Quadir was curious and asked the fish seller about why he was lowering the price of fish from Tk 6000 to Tk 4000 and finally to Tk 2000. He replied that he was lowering the prices because in time, the freshness of the fish had been decayed, thus he had no option but to lower the price.
This incident stroke him hard and he kept looking for a way to come up with a solution; a solution with which a fisherman would be able to sell his fish at the rate he wishes for. Then the idea of using mobile phone to transfer money came to his mind.
Mehdi said that bKash is a groundbreaking pioneer company in Bangladesh, he added. “It is not only an innovation but it is a local financial technology,” he said.
He said that local mobile financial services (MFS) providers may provide loan and insurance services to the countrymen within the next five years to ensure more financial inclusions for the 2.5 million unbanked people.
He however said that bKash’s capacity is not confined only within transferring money rather it could be used for lot of other financial services. “But for that we need a proper guideline,” he said adding that bKash has already sent a draft guideline in this regard to the central bank for approval.
“If the guideline is approved, then we will be able to provide other financial services, including loan and insurance, through mobile within the next five years, and may also go for global expansion”.
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