Digital banks should aim to speed up financial inclusion

The key objective of digital banks should be to expand financial inclusion in the country rather than registering profit, according to industry experts.

"I do not think making profit should necessarily be a priority as a core objective of digital banks is to drive financial inclusion," said Benjamin Quinlan, CEO and managing partner of Quinlan & Associates.

Quinlan also said a key trend in digital banks is the development of ecosystems, where the banks partner with various service providers to create holistic platforms.

"They [digital banks] need to be extremely smart about making partnerships and leveraging their networks and customers. If they want to do it organically, it is going to cost a lot of money," he added.

Quinlan was speaking at the 4th Bangladesh Fintech Summit at the Radisson hotel in Dhaka yesterday.

"These ecosystems aim to cater to diverse customers' needs within a unified interface, from financial services to related offerings," he said.

And while Bangladesh has a promising landscape for digital banks, it requires product planning to avoid the pitfalls encountered by some early entrants in the APAC region.

"So, a thoughtful approach is essential to tap into the country's growth potential and ensure long-term success," Quinlan added.

He also said profitability for digital banks in developing markets across the world usually comes after 9 to 10 years of operation.

Kamal Quadir, CEO bKash, said Bangladesh has witnessed considerable growth in digital financial inclusion and digital service usage over the years.

"There is an average of 12 million transactions carried out through bKash daily. Of it, 8 million transactions are settlements, such as mobile recharges and utility bill payments," he said.

"So, I think the digital adoption rate in Bangladesh is good in general," Quadir added.

Quadir said digital lending, introduced by City Bank with partnership with bKash, has seen a tremendous response from customers.

About 3 lakh people have taken funds amounting to Tk 400 crore so far, and the rate of non-performing loans stands at just 1 percent, he added.

AKM Fahim Mashroor, CEO of bdjobs.com, said amid the rise of digital services, financial crimes and scams are also seeing significant growth.

Highlighting the success of fintech products in Bangladesh, Fahim Ahmed, CEO of Pathao, said Bangladeshi consumers took Pathao's option to "Buy Now, Pay Later" very positively.

"So, we have demonstrated our ability to harness data and analytics to unlock flexible spending for our customers," he added.

Ahmed also said that with a digital bank license, Pathao is uniquely positioned to expand financial access for the digital native youth and tech-enabled small businesses in the country.

The Bangladesh Fintech Forum hosted the "Mastercard Presents 4th Bangladesh Fintech Summit", powered by bKash in association with Mutual Trust Bank Limited, Upay, BASIS and The Daily Star.

Organised by the Bangladesh Brand Forum, the day-long summit brought together industry professionals, decision-makers, and thought leaders from the finance sector at home and abroad to discuss and share insights on the emerging fintech industry in Bangladesh.

Among others, Mamun Rashid, country clients and markets lead of PwC Bangladesh; Md Abul Kalam Azad, former principal secretary; Mahtab Uddin Ahmed, founder and managing partner of BuildCon Consultancies Ltd; Kazi Mahmood Sattar, chairman of RSA Advisory Ltd; and Asif Ibrahim, chairman of Chittagong Stock Exchange also spoke.