Digitalization of banking refers to conducting its existing operations and developing new functions connecting to Banking through Digital Mediums. The presentation has attempted to explore the Digitalization process in Banking industry that took place from the date of independence to till 2018. The presentation invites any constructive criticism or remarks for future improvement.

1. italization of Banking in Banglade
A Study on MutualTrust Bank

2. Digitalization: conducting its existing operations and
developing new functions connecting to Banking through
Digital Mediums
• Digital Innovation has now touched every section of
individual lives and business world
• Digitalization in Banking has allowed Banks to
transform a number of its manual operations to
develop into automated form and also sturdier
approach
• Due to Digitalization allowed the banks to introduce
newer set of services allowing customers to have
24/7 banking
• Digitalization in Bangladesh largely started in the
mid ‘90s and boomed after 2009

3. Objective of the Study
Broad Objective
To unravel the scenario of Digitalization in the Banking Industry of Bangladesh
throughout the period.
Specific Objective
a. To understand the length of transformation of services from Manual to
Automation
b. To discover the newly developed services to internal and external customers
in Digital Medium
c. To explore the channels and modes services are provided to customers in
Digital Platform
d. To understand the security aspects and new challenges in Digitalized banking

4. Digitalization in Bangladesh
• Banking Industry in Independent started off with
o 6 nationalized commercialized banks,
o 2 State owned specialized banks
o 3 Foreign Banks.
• During the 70’s only IFIC used Baxibank developed for desk
performing financial transactions
• During the 80’s Foreign Banks e.g Standard Chartered Bank used
digital banking solution provided by respective corporate head office
in LAN system for each individual branch operations
• In the 90’s except for locally developed solutions e.g. PC Bank
Software developed by LEADS Corp. and Flora Bank by Flora Ltd

5. • Most of the Digitalization of banking took place after 2000 in
Bangladesh
• CORE Banking System was introduced by Eastern Bank Limited in
2003 with the implementation of foreign Solution FLEXCUBE
C O R E - Centralized Online Real-time Environment
A banking system where all the transactions of the bank is done
online and books of account and static data of the customer are
maintained, processing of interest centrally
• With the successful digitalization in centralized environment, other
banks soon started integrating CORE Banking system

6. Fig: Functions of Omnichannel

7. Fig: UBS Interface

8. • Local banks established Primary Data Centre
with all the Main frame Application servers,
Database servers
• Database centrally hosted at Head Office, and
all the branches was connected with the Data
Centre by WAN (Wide Area Network) system.
• Disaster Recovery Site and Tertiary Recovery
sites were also came into existence
• CBS integration allowed multiple banks to
introduce new services through alternative
delivery channel
• Internet banking was launched in 2004 by EBL
with limited banking services
• Bank Cards started being issued from Local
banks collaborating with international card
providers.

9. • Currently along with Debit Card, Credit Card
and Prepaid Card are available by banks for
customer payment in ATM, POS and online
platforms

10. Payment and Settlement System from BB consists of:
• Bangladesh Automated Clearing House (BACH)
o Bangladesh Automated Cheque Processing
Systems (BACPS)
o Bangladesh Electronic Funds Transfer Network
(BEFTN)
• Real Time Gross Settlement (RTGS)
• National Payment Switch Bangladeh (NPSB)
• Online Payment Gateway Service
Providers(OPGSPs):
Automation of Payment and Settlement System Faci

11. Bangladesh Automated Cheque Processing Systems (BACPS)
I. It uses Cheque Imaging and Truncation (CIT) technology
II. Used for electronic clearing of the paper-based instruments
e.g. cheque, pay order, dividend & refund warrants, etc.
lll. At present around 1,600,000 regular and around 111,000 high
value cheques & other instruments are cleared per month
Bangladesh Automated Clearing House (BACH)
I. Introduced in 2010
II. Have 2 Component (BACPS, BEFTN)
III. Both the systems operate in batch processing mode
IV. VPN has been created between participating banks and DC
and DRS
Bangladesh Electronic Fund Transfer Network (BEFTN)
I. Started its 'Live Operation' on 28th February 2011
II. It facilitates the transmission of payments between the banks
electronically
III. credit transfers such as payroll, foreign and domestic
remittances, social security, company dividends etc are
handled
IV. debit transfers such as mortgage payments, loan payments,
insurance premiums, utility bill payments, government tax
payments are handled

12.  Bangladesh Bank introduced Real Time Gross Settlement (RTGS) system on 29th
October 2015
 Transactions do not need any waiting time
 Transactions are settled as soon as they are effected
 System is designed to settle high value local currency transactions as well as
domestic foreign currency transactions
Real Time Gross Settlement (RTGS)
 Started its operation on 27 December 2012
 In order to attain interoperability among schedule banks for card based/online
retail transaction
 NPSB is processing interbank
 Automated Teller Machines (ATM),
 Point of Sales (POS),
 Internet Banking Fund Transfer (IBFT) transactions
National Payment Switch Bangladesh (NPSB)

13. General Information
Particulars December, 2017
No. of Debit Card 9,948,690
No. of Credit Card 946,954
No. of prepaid Card 176,185
No. of ATM Booths 9019
No of POS terminals 32,953
NPSB certified Banks for ATM trans. 51 Banks
NPSB certified Banks for POS trans. 48 Banks
NPSB certified Banks for IBFT trans. 6 Banks

14. Online Payment Gateway Service Providers
(OPGSPs)
• Circular Issued in December 28, 2017
• Authorized Dealers (ADs) to offer the facility of
repatriation of remittances against small value
service exports in non-physical form
• The exporters of the services will be able to receive their
overseas payments through the OPGSPs
e.g. Paypal , Money Bookers Best Payment Gateway and
Virtual Pay online platforms.

15. • Time Series (Economic Data):
Economic Data presented in Time Series Formatted Report by
means of Data Warehouse Application
• Online CIB Services
Automated CIB service delivers credit related information for prospective
and existing borrowers
• Online Agent Information Management System
Allowed to direct the required information and documents by the Authorized
Dealer Bank for granting authorization to work as local agent of foreign
principal
• Reporting goAML:
Web application provides a secure web based interface between the BFIU
and its reporting organizations for the electronic upload of reports
• Web Upload
Weekly Statement of Position have to be submitted through on-line using this
web service within 03 (three) working days after the reporting date
E-Services by Bangladesh Bank

16. • Prize bond Matching
Service allows to search single or multiple number at the same time of the prize
bond drawn every 3 months
• Online Foreign Exchange Transaction Monitoring System
Used for monitoring total foreign exchange transactions of Bangladesh.
• Mobile Apps: Banking Information
Mobile app for ATM Booths and Branches location details as well as
services provided to the customers in Bangladesh
• Bangladesh Bank eTender System
system will helps interested bidders to participate in the local and
international tender/procurement of Bangladesh Bank.
• eReturns
An Online Portal Service for Scheduled Banks to submit Electronic Returns using
predefined template for the purpose of Macro Economy
E-Services by Bangladesh Bank

17. • Special Foreign Currency Account Monitoring System (SFCAMS)
AD Branches of Banks report day to day Transactions (Only Special FC A/C) to
Bangladesh Bank through this service
• Information for Deposit Insurance Premium Assessment (IDIPA)
Necessary Information can be obtained through this service for Premium
Assesment
• Corporate Memory Management Systems (CMMS)
Built to monitor the errors, omission and violation of regulations and policies by
the Schedule Commercial Banks/FI's and their executives.
• E-statement for CRR & SLR
Thursday Position of Demand and Time Liabilities statement must be submitted
through on-line using this web service to Department of Off-site Supervision
(DOS) within the 10th of the following month.
E-Services by Bangladesh Bank

18. Data Centre
• Most of the Banks, having centralized operation have established its Primary Data
Centre with all the Main frame Application servers, Database servers
• Database centrally hosted at Head Office, and all the branches was connected with
the Data Centre by WAN system.
Disaster Recovery (DR) site
• Considering the security aspect, Bank also hosted Disaster Recovery system
• Replica of Live system, located in distant premises
• Having same capacity like Production system
• running 365 x 24 continuously without any recess

19. Real Time Data Replication
• The online real time data replication is initiated from Primary DC to DR site
• Robust technologies of EMC and other storage system in place
Second Disaster Recovery Site
• Few Banks further strengthened Data Security by including Second Disaster
Recovery Site (Tertiary Data Centre)
• Considerations have been as such to place different location on stable
seismologic plate

20. Alternate Delivery Channels (ADC)
• Plays vital role to reach to the door steps of the bank’s customers with banking
services 24 hours in a day and 365 days in a year
There are two major wings of this channel.
1. Self-Service channel under which
a) Internet Banking (IB),
b) ATM,
c) POS,
d) Bill Pay Machine,
e) Interactive Voice Response (IVR) and
f) SMS Banking are clubbed
2. Managed Service: This includes
i. Call Center.

21. Green Banking Initiatives
In February 27, 2011 BPRD released Green Banking Policy for all scheduled
banks
Noteworthy Green Banking Initiatives are
• Automated Advice and confirmation
• E-Statement
• Server Virtualization
• Blade Server

22. Mobile Financial Services
• One of the key initiative in Financial Inclusion
Program
• In 2011 Mobile Financial Service was introduced by
Dutch Bangla Bank Limited
• It currently accounts for 14% of the total
population in the customer base
• bKash and DBBL Currently holds 95% of this market
• 28 Banks currently have license to offer Mobile
Wallet Service

23. • Providing limited scale banking and financial services to the underserved
population
• Banks enters into valid agency agreement and appoint Agents for Outlets
It has 3 distinct features from conventional bank branches :
i. Each transactions were executed through Biometric Fingerprint
ii. Transactions are executed on Real Time basis
iii. The agent operations are operated centrally through agent banking
department.
Agent Banking

24. No. of Banks currently providing the Services 18
No. of agents 777,179
No. of registered clients in Lac 585.70
No. of active accounts in Lac 231.30
No. of total transaction 158,584,216
Total transaction in taka(in crore BDT) 27,573.40
No. of daily average transaction 5,286,141
Average daily transaction (in crore BDT) 919.10

25. • Bank Asia Introduced Agent Banking in 2013
• Currently 18 scheduled banks have been provided with license
• Currently there are 2177 Agents having 4157 Outlets through
out the country (Dec,2017)
• Currently there are 12,14,367 accounts 13993896000 Taka
worth Deposit

26. • In 2015, Bangladesh Bank implemented Real Time Gross Settlement (RTGS)
• This allowed large value electronic fund transfer for both local and foreign
currency transactions

27. Digitalization in Mutual Trust Bank Limited
Mutual Trust Bank Limited has been using Florabank software since 1999
Current version of the Software is Florabank 2.2.1.
Apart from CBS there are a number of software’s used for different purposes.
Namely
 Transwire for Card Management from Russian Vendor
 Document Management System (DMS)
 Batch Process from Foreign (Srilankan) Vendor
 Florabank solution customized for RTGS Processing

28. In House Software’s are:
1) Payroll Reconciliation
2) M-net for Intranet Facility
3) Provident Fund Management
4) Utility payment
5) Management Information System
6) Cheque Requisition
7) User Management System
8) Document Management System
9) Regulatory Reporting
10) Other Organization Bill Payment Management

29. MTB Group ITS Division
• MTB Has Mostly Centralized Operation
• Primary Data Centre Hosted in Gulshan Head Office
• First Disaster Recovery Site is located in MTB Tower, Banglamotor, Dhaka
• The Bank also has 2nd Disaster Recovery Site located in Kashimpur,Gazipur
• The Disaster Recovery Site has Identical Servers comparing to Data Centre.
• Virtualization has been implemented for live Servers.

30. MTB Group ITS Division
• The Data Centre consists of 75 live servers.
• There are 10 additional test servers working as backups for the working live
servers.
• The storage System at Mutual Trust bank is acquired from EMC and Net App.
• The Replication System in Data Centre is synchronous and in few cases, it is
asynchronous.
• Microsoft Bitlocker is used to protect Data in Transit.

31. • Intranet Facility for MTB is named as Mnet.
• It has been developed through in house software development
facility.
• It was first launched in 21 August, 2007
Intranet Facility
MNet contains the following:
 Mnet-Mail
 MTB Circulars
 BB Circulars
 Corporate Notice Board
 MTB News
 Internet News
 IT Help Desk
 Departmental Homepages
 MTBians Information & More services

32. Alternative Delivery Channels (ADC)
Card Business
Current Card Products are:
 Credit Card
 Debit Card
 FlexiPay
 MTB Protection Plan
 Discount Partners
 Promotional Offers
 Payment Channels of Credit Card
 All Cards currently issued cards are equipped with EMV Chip
 Transacted through 2 factor authentication process more secured transaction

33. Internet Banking
• IB was scheduled to be launched for the usage of the customers from
January 1, 2010
• Customers have to apply for Internet banking Facility n CIF Form
• Customers have to log in with their user name and Password
• Every Transaction is executed by 2 Factor Authentication

34. Internet Banking
Facilities Customers can avail from Internet banking
• Summary of all accounts and access account statements
• Order cheque book(s)
• Transfer funds to any Mutual Trust Bank account
• Set up payees (within MTB), to whom you transfer funds regularly
• View credit card details and pay any MTB credit card bill
• Pay utility bills
• Manage customer profile information
• Mobile Topup

35. Mobile Banking Service
SMS Banking
Currently Available Facilities:
• Access customer account from anywhere in the world through a cellular phone.
• Ability to make balance inquiries without visiting the physical branch.
• Ability to collect mini statement of last 5 transactions.
• Transaction Alert lets customer get informed whenever there is a cash withdrawal
transaction on your account.

36. Mobile Banking Service
MTB Smart App
Fig: Mobile App Interface
Mobile app available at Play Store and Apple Store.
Available Services are
o Check available balances,
o Transfer money, pay bills,
o Top-up mobile,
o View credit card details,
o Pay credit card bill,
o Order cheque book
o Locate to the nearest branch and ATM Location
o Subscription to the Latest Card Offer News

37. Mobile Banking Service
24/7 Contact Service
a) Accounts Services
b) Card Services
c) Value Added Services
d) Remittance Services
b) Product Information
It provides 24 hours and 7 Days service to the customers for various account related service

38. Multi-Purpose Kiosk
• Multi-purpose Kiosk are placed as part of Smart
Banking Package in the year 2015.
• Used for collection of Bill, Utility Payment account
query etc through Cash or Instruments.
• Currently There are 10 Kiosk placed at different
locations for convenience of customer service.

39. Recharge through Missed Call Service
• MTBL to offer this service first
• Starting from June1 , 2017.
• Customer will have to sign up for the service and set the amount to be
recharged to the cell phone number.
• Customer will have to call up to a given number whenever required
• And the customer cellphone number will be credited with the given amount
• Customer Account will be debited Subsequently

40. Agent Banking in Mutual Trust Bank Limited
 MTBL successfully introduced Agent Banking in 2015
 To connect the geographically dispersed population to banking net
 Objective is to bring low cost, secured financial services
 Offering technology driven banking solutions at the doorstep of the unbanked people
 Agent Banking has separate CORE banking solution software “ABS Banking Software”
in every computer in Agent Banking Department and Agent Outlets.
 Agents have to execute through hitting main CBS having no direct access to it

41. Agent Banking in Mutual Trust Bank Limited
3 ways of Transaction for Agent Banking Customers:
1) From Agent through Biometric Fingerprint (not required for fund deposit)
2) Through Debit Card from ATM/POS
3) Cheque drawn from Branches of the bank.
 All the agent outlet transaction has to be executed by fingerprint input from both Agent
and the Customer.
 Upon confirming transaction a deposit slip is issued with QR code embedded on the face
of the slip and a copy of which given to the customer.

42. Agent Banking in Mutual Trust Bank Limited
Fig: Deposit Slip Generated
Fig: Generated Withdraw Slip

43. Agent Banking in Mutual Trust Bank Limited
Remittance Collection
Remittance are transacted in 2 ways:
1. Remitting to Direct Bank Account Number.
2. Remitting to Money Exchange (Western Union, MoneyGram). Customer will require
PIN and NID number to participate in the transaction.

44. Agent Banking in Mutual Trust Bank Limited
• Mutual Trust bank has 50 Agent Outlets
• in 23 District having 43 rural outlets and 7 urban outlets.
Mutual Trust bank currently has 17000 Agent Account
• having approximately 500 million of Deposit amount
Current Status

45. Major Findings from Banking Industry
1) Foreign Banks have been front runner in implementation of Digitalized
operation in Bangladesh.
2) Digitalization is going to be the key ingredient towards Centralization of all
operations and services that banks are aiming to
3) Successful initiatives from local private work as a benchmark for other banks
to follow-up.
4) The pioneer bank has to undertake the biggest share of the risk factors.
5) Along with massive Digitalization evolution, vulnerability and risk factors are
also on surge.

46. Major Findings from MTBL
1) Mutual Trust Bank is one of the 5 banks that allows customers to transfer
funds from mobile apps.
2) Agent banking has been a strong enterprise for financial inclusion.
3) Complementary software programs are also relied on main CBS which are
also dependent for up-gradation

47. Major Findings from MTBL
1) Mutual Trust Bank is one of the 5 banks that allows customers to transfer
funds from mobile apps.
2) Agent banking has been a strong enterprise for financial inclusion.
3) Complementary software programs are also relied on main CBS which are
also dependent for up-gradation

48. Recommendations for Banking Industry
1. NID can be made uniform Identification Locator to have better access to customer
info
2. Amalgamating a number of accounts under one account can be attained
3. 360° approach to the usage of Digital Banking.
4. Customer Education is necessary to embrace more customer involvement in banking
5. Big Data, Cloud Computing, Data Mobility, Social Media have strong potential in
banking

49. Recommendations for Mutual Trust Bank
1) Upgrading CBS will complementary software's to upgrade and increase efficiency
2) The security aspects of agent banking will need greater attention in coming days
ahead.
3) Having a DR Site outside seismologic plate will allow bank to enhance its Data
Security to a stronger postition.

50. THANK YOU !!