Global Value Chain (GVC) Analysis of Mobile Financing Industry in Bangladesh
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This document analyzes the global value chain of the mobile finance industry in Bangladesh. It begins with an overview of Bangladesh's banking system and low financial inclusion rates. It then examines how banks have started using mobile phones to deliver financial services. The document analyzes the industry's input-output structure, institutional context, and governance. It maps out the various value chains for mobile banking, payments, and remittances. Finally, it discusses factors driving changes in the industry and possibilities for its future upgrading.
Global Value Chain (GVC) Analysis of Mobile Financing Industry in Bangladesh
- 1. M-Finance Industry of Bangladesh: Global Value Chain (GVC) Analysis Prepared by: Maleeha Tarannum
- 2. Macro Economic Overview of Financing in Bangladesh • Only 2.221 banking branches and 1.443 ATM booths per 100 square kilometre • 5.28 banking branches and 1.28 ATM booths per 1,00,000 people Low financial inclusion
- 3. Banks Starting Mobile Financial Service Delivery
- 4. Global Value Chain Analysis
- 5. Dimensions of Global Value Chain Analysis Input-Output Structure Geographical Context Institutional Context Governance
- 10. Mobile Banking Value Chain (Bank-led) Design Account Opening Cash In/Out Network E-Money Issuance Deposit Holding Value Added Services Network Channel Account and Transaction Management Key Bank Mobile Network Operator (MNO) Independent MNO Agents Source: (Ahmed, Haque, Iqbal, Ahmed, & Rahman, 2013)
- 11. Mobile Banking Value Chain (MNO-led) Design Account Opening Cash In/Out Network E-Money Issuance Deposit Holding Value Added Services Network Channel Account and Transaction Management Key Bank Mobile Network Operator (MNO) Source: (IBM, 2010) Independent MNO Agents
- 12. Typical Payment Value Chain Processor Merchant Acquirer/ Gateway Network Bank Alternative Payment Providers Source: (KPMG International, 2011) Consumer
- 13. Mobile Payment Value Chain Mobile Software/Platform Provider Technology Provider Mobile Network Operator Source: (KPMG International, 2011) Consumer
- 14. Global Mobile Banking Value Chain Technology & Software Provider Account Opening Design Remittance Exchange House E-Money Issuance VAS Recipient Account Key Bank Cash In/Out Agent Recipient Local Network Channel Global Financial Network Global Account and Transaction Management Deposit Handling Local Account and Transaction Management Mobile Network Operator (MNO) Independent MNO Agents Global Global/Local 3rd Party
- 16. GVC Governance DBBL bKash IBBL Other Banks Government Customers Service Price Robi Axiata Software Supplier i.e. SAP Revenue Sharing Airtel Banglalink GP Bharti Airtel Orascom Telenor
- 18. Value Addition Process: Input-Output Structure
- 19. Value Addition Process: Bank-led Model
- 22. Drivers of Change in Industry Involvement of Multinational banks in mobile financial services Value Added Service of MNOs Interest on deposit in virtual account Diversified needs of consumers Involvement of single MNO with several banks Drivers of Change Value added service of Banks
- 23. Market Structure
- 25. Power Structure
- 26. Geographic Spread Factors to consider • Several multinational banks in Bangladesh • Advancement in telecommunication across globe • Active involvment of international development organization in the country • Significant number of workers working outside • Several countries are now allowing migration of workers
- 27. Industrial Up- gradation Partnership with single MNO Mobile Financial Service for Niche Market Innovation in term of Value Added Service Value chain led by Development organization Emergence of technological trainer as a partner