According to an analysis by HSBC Bangladesh, banks in Bangladesh should not worry about advances in financial technology, also known as fintech, as they can create a huge opportunity for greater financial inclusion and the expansion of basic services.
The banking giant said the new wave of fintech is often described as a disruptive force threatening banks with nimble and savvy new competitors.
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But fintech is transforming how people and businesses connect to their banks and how banks run their back-office operations, the bank said.
“Fintech complements rather than threatens banking institutions,” Francois de Maricourt, chief executive of HSBC Bangladesh, said in a statement.
“In my experience, banking has always been about technology, so the current boom in fintech innovation represents an evolution rather than a revolution for traditional banking. It complements and diversifies the existing financial system, without replacing or disrupting it.
The fintech market in Bangladesh is in its infancy. However, it can be used as a powerful way to expand access beyond financial services to other sectors, including agriculture, transport, water, health, education and energy. own.
“Digital solutions and new technologies will help overcome the enormous challenge of providing access to financial services for the poor and help achieve the government’s goal of universal access to financial services by 2021,” said HSBC Bangladesh.
Fintech innovators are harnessing the internet, mobile technologies and big data to deliver a range of tools and services, from technology payments and crowdfunding to foreign exchange, online lending and wealth management services.
The statement said bank-led mobile financial services have grown rapidly and become an important “tool of commerce” to extend banking services to the unbanked and banked population.
There are 52.68 million registered mobile bank accounts as of May 2017, according to Bangladesh Bank data.
“However, despite this rapidly growing number, cash remains the most widespread form of financial transaction.”
Cash transactions are expected to decrease over the next few years and mobile money to increase as more people start paying for private and government services through mobile wallets.
The sector has seen major technological innovations in the recent past – credit cards, ATMs and online banking, to name a few.
“These changes brought huge advances in consumer convenience, but they did not revolutionize the financial landscape: financial institutions remained the dominant players and adapted to these changes,” Maricourt said.