Establishing a digital bank is necessary to include the entire population financially as Bangladesh is setting its direction to build a smart country, Nagad founder and Managing Director Tanvir A Mashuk has said.

“We have mobile money carriers in the country but it has limitations to offer reasonable and customers required services and banks also has its own limitations to spread its services because of the cost of doing business. So Digital Bank is the only solution,” said Mishuk during an interview with UNB.

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Bangladesh is all set to enter the era of a Digital Bank with necessary policy formulation nearing completion.

With a view to widening and accelerating financial inclusion, the government feels urgency of launching digital banks, which will also create jobs for young IT workers, as reflected in the FY24 budget speech of Finance Minister AHM Mustafa Kamal.

The Bangladesh Bank has also finalised regulatory guidelines to be placed in the bank’s next board meeting next week.

The Nagad founder said, “With a fast growth in smartphone penetration and soaring internet users, a large number of people are already enjoying many banking services, mainly offered by MFS, on their phones.”

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Now, they now seek a complete financial solution on a single platform. But mobile money providers have limitations, they cannot perform like a bank does, Mishuk added.

Nagad managing director also said, “By leveraging state-of-the-art technologies and innovative solutions, Nagad has pioneered a novel approach to banking, which will enable millions of individuals and businesses to access secure and convenient financial services.”

“We believe that with a strong foundation and a vision for the future, Nagad is well-positioned to shape the future of digital banking in Bangladesh and contribute to the country’s overall development,” he added.

Nagad, a disruptive mobile financial service provider of Bangladesh also has partnership with Bangladesh Postal Department, became the first to introduce the country and its people with Digital Bank, also known as Neobank or virtual bank.

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Such a bank will provide all banking services through websites and mobile phone apps, according to Nagad.

There is no denying that the digital delivery of financial services by MFS operators reflects that they have come a long way when it comes to going paperless and cashless and bringing an end to in-person bank visits.

Financial industry experts say it is now high time for an MFS operator like Nagad to function as a digital bank. In this way, customers will get all of their desired financial services on a single platform.

It is a commendable move that the government is going to launch digital banks in Bangladesh in the next fiscal year, they also say, adding that this will change the entire banking experience for people by making available services at their fingertips.

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A traditional bank operates through physical branches and locations, but a digital bank with little or no physical presence runs solely through their digital platforms, enabling customers to perform various financial transactions using digital devices such as smartphones, tablets, or computers. 

In digital banking, customers can perform many of the same services that they would in a physical branch, such as opening accounts, checking account balances, transferring money between accounts, paying bills, applying for loans, and more.

Among many additional features that digital banking services offer, the option of mobile check deposits is a game-changer. A mobile check deposit allows customers to take a picture of the front and back of a check using a smartphone and deposit it through a bank’s mobile app, without requiring bringing the check to the bank. Thus, customers can save time.

Digital banking has emerged as a disruptive force in the global banking industry, offering customers more convenient, affordable, and accessible financial services through online and mobile channels. In neighbouring countries like India, digital banks are very popular among consumers as they get all services easily.

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Experts believe that in Bangladesh too, digital banking will make the lives of customers easier by allowing them access to banking services from anywhere at any time. In terms of costs, it is easily understandable that digital banks have lower operating expenses than traditional ones as they do not have physical infrastructure, rather rely more heavily on technology to provide customers with a plethora of services.  So, this translates into lower charges and interest rates for customers.

Another important feature that makes digital banking popular worldwide is speed. Digital banks process transactions faster than traditional banks do because of the speed and efficiency of their digital platforms.