Nazmur Rahim ventured into the banking sector as a management trainee at ANZ Grindlays Bank. He has a wealth of experience holding important positions in retail banking, credit card and consumer transaction banking in the leading commercial banks of Bangladesh. Prior to joining BRAC Bank Limited in 2016, he was the Head of Cards Business at AB Bank Ltd. At present, he is Head of Retail Banking and SEVP at BRAC Bank Limited. With 21 years of banking experience, Mr. Nazmur Rahim is one the leading authorities in Retail Banking space in Bangladesh.
Mr. Nazmur Rahim talked to Fintech about his illustrious career, his journey at BRAC Bank, the bank’s products, innovation, technology and the banking sector in general, among other topics. Here are the excerpts of the conversation.
FINTECH: Give us a little background of your career.
Nazmur Rahim: I began my career at ANZ Grindlays Bank Card Division. It was early 1997, when credit card was launched for the first time in Bangladesh. The cards were sold from the branch office then. Then we introduced direct sales channel which turned out to be a major success. We outstripped other banks in cards sale within four months. After this success, the management planned to expannd this new business in Chattogram where I was given the responsibility of the entire business development. During my stint in Chattogram from 1998 to 2001, the cards business witnessed significant growth.
After the Chattogram business mission, I was given the responsibility of managing the merchant acquiring service for the entire Bangladesh.
There are basically two areas in cards business – one is merchant acquiring and the other is issuing the card itself. For the later, a portfolio management unit was opened in 2004. This unit was created to find out ways to build up revenue from the existing customer base and expand the portfolio. I ran the unit till 2009. Then I was given responsibility of consumer transaction banking in addition to credit card to look over depositors’ portfolio. I continued in this post till 2011. Then I moved to AB Bank and joined as Senior Vice President in Card Division. I worked for five years in AB Bank. Then in 2016, I joined BRAC Bank as the Transformation Lead. MD&CEO assigned me to the Head of Cards & Personal Loans from that post, then the Head of Retail Products. From 2017 onwards, I took over charges as the Head of Retail Banking.
FINTECH: When you started your banking career at the Grindlays Bank, what was the banking sector like compared to the present?
Nazmur Rahim: In terms of technology, the foreign banks were far more advanced than their local counterparts. The foreign banks adopted the latest and state-of-the-art technology. Talking about Grindlays at first, it was the pioneer of consumer banking in Bangladesh. Before that no bank really know how to get most out of the consumers. Everybody thought consumer banking would function just like general banking. They didn’t have the idea that consumer banking business needed to be conducted separately.
Slowly but steadily, it was introduced as a trend in the 1990s. We have begun the direct sales of credit cards with two numbers and within four months, the direct sales numbers surpassed that of the branch sales.
In the Bangladesh Banking sector, ANZ Grindlays Bank was the first to launch most of the products! Retail Banking and Credit Cards were all brought by Grindlays. The first ATM, however, was launched by Standard Chartered. AB Bank Limited tried to set up an ATM around the Gulshan Club during that period.
Credit card in the year 1997 was a huge revolution for Bangladesh. Many were confused about its future in Bangladesh. But after its arrival, there was a paradigm shift in the banking sector. The local banks started their activities. This journey began in local banks where the top positions were taken over by the bankers of foreign banks. If you take a look at the banking sector, you will see that a significant share of the managing directors have the experience of working in at least one foreign bank in their career.
Gradually, the local banks started to adopt technology and came head-to-head in acquiring market share. Now, we can see that the local commercial banks have come to the forefront. Think about BRAC Bank. In terms of Retail portfolio, BRAC is the number one, a position once held by ANZ Grindlays Bank and Standard Chartered.
If we compare it with India, the country’s banking sector was once dominated by Citi Bank NA, Standard Chartered and HSBC. Now just look at HDFC Bank which was launched in early 1990s. It is now considered as one of the top Banks in India. Apart from this, local Banks like ICICI, Axis and Yes are also dominating in this country. In every country, the local banks are gradually introducing services, once only exclusive to their foreign counterparts. See Malaysia for instance. The foreign banks are not operating like they wanted to due to the CIMB Bank. This wave of change is also hitting the banking shore in Bangladesh.
The local banks in Bangladesh have become more aggressive now-a-days in terms of technology and innovation. All the local technological advancements you see, be it payment using mobile, NFC or QR, are available with the local banks.
FINTECH: The banking industry will be hit or rather has already been struck by technological disruption. Are the local banks in Bangladesh ready for this?
Nazmur Rahim: You see, technology is changing the banking sector ecosystem and it is a huge challenge to adapt to the continuous change. The banks are trying to make rapid advancement in technology. However, they are all faced with a common challenge – security. The banks have to address this challenge to make technological progress.
We know the fintech will come and will capture the banking sector. Currently, customers are using services like Uber, Ali Express and Netflix using cards. The major portion of the transactions are processed outside Bangladesh. Banks have to move fast to take the market pie.
FINTECH: What are your basic retail products?
Nazmur Rahim: The basic products of our retail banking are the deposits and loans. The loan products are Credit Card, Personal Loan, Auto Loan and Home Loan. Deposit products are Savings Account, Current Accounts, Term Deposits and Deposit Pension Scheme. BRAC Bank has the largest home loan portfolio in the banking sector. We are also doing exceptionally well in credit cards. We have the fastest growth in credit card acquisition in the industry. We also have other value added services like remittance, merchant acquiring and ATM channels.
We have already begun projects on upgrading Internet Payment Gateway, Merchant Management and Call Center systems. We will serve the valued customers better after completion of these technological upgrades.
FINTECH: How are the customers being benefited from the retail banking facilities? What are you offering them?
Nazmur Rahim: Two things. First, it is the network that we have. We have 186 branches, 450 ATMs and 90 CDMs. Our wide network coverage allows greater customer access. Secondly, convenience is very important. The service we started to provide to the customers is based on customer centricity. Earlier, we used to focus on the products but now we have started a new journey. We have commenced customer centric business model. For example, we have a separate service for doctors and female segments. By taking into account what they need, their lifestyle and where they need to spend money on, we have designed our various products. The products will be offered for segmented customer groups. We have started working on the large segments and will create numerous small segments as well.
FINTECH: Is your bank planning any innovations in terms of technology or retail?
Nazmur Rahim: We have taken some initiatives and made many upgrades this year. We have upgraded core banking system. The upgrade of credit card, internet banking and e-commerce gateway is under process.
Let’s talk about Internet Banking. All the banks will tell you that you can see or download the statement of Internet Banking. We have a separate feature for this. When you apply for a loan or a visa at the embassy, they will verify if the statement is correct or not. This is a good thing for the customer. Currently, after receiving a copy, the customer will deposit it at a branch where the authority will check the authenticity of the statement. We have created an amazing feature for this purpose. Using Internet Banking, you will provide the email address of the authority and a password when you are dealing with a third party. We will give them the statement on behalf of the customer and they can see it using the password. This system is convenient for us, customer and the third party – three of us. No other Bank in Bangladesh is offering this feature.
We have set aside an account for fund transfer. By the means of NPSB, you can instantly send money from one bank to the another. The Agent Banking is our new big thing. We have developed strong technology backbone for Agent Banking.
We want our bank to be completely digitalized in future. It is not just about giving digital services to the customers, we need to digitalize our back office where we still have some paper-based work. We are also working for e-KYC. We have a lot other innovations in our plan.
FINTECH: What is the effect of the mobile financial service like bKash?
Nazmur Rahim: Huge! The effect of mobile financial services on the economy has been revolutionary. Thousands of crores of taka is being transacted every day. Just imagine the trouble of handling that amount of cash! Let me give you the example of Indian Railways. Rats used to spoil the cash kept in stores in India but now that is not the case. They have introduced e-payment for ticket. Here again, the garments industry had to pay salary to thousands of employees in cash. Now the salary is being disbursed through bKash’s mobile banking wallet. The hassles of carrying cash and the risk of theft have been stopped. It has enhanced efficiency as well. Moreover, international incoming remittance, merchant payment and bill payment facilities are outstanding which is effecting our payment ecosystem.
FINTECH: Thank you. You can say something about yourself.
Nazmur Rahim: Yes, I want to add something. The big giants of technology are knocking at the door. This will be a stiff challenge for the banks. The fintech companies are slowly spreading their wings and will continue to do so in future. There are e-wallets hitting the market. E-wallets are making revolution, just the way the ATMs did in 1990s. The banks have to cope with the new form of fintech-based banking services. We have to be prone to change for the sake of convenient and more smart services to the valued customers. In this age of fintech-driven banking solutions, we must keep in mind basic rule of all – that is –the survival of the fittest. The toughest challenge for a bank is to adjust with the technological disruptions.
