Dr. Shahadat Khan : FinTech, Made in Bangladesh

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What is FinTech and what is the future of FinTech in Bangladesh?

FinTech, in short for Financial Technology, means using technology for financial services. We live in the era of information technology (IT). IT has made big changes and influence in all aspects of our lives such as the way we communicate, entertain ourselves, consume media etc. FinTech brings in a lot of possibilities in providing and improving these financial services. For example, in Bangladesh 98% people use mobile phones, more than 92 million people use the internet, but only 25% people have bank accounts. One use of FinTech is Mobile Financial Services (MFS), which started about 9 years ago in Bangladesh and we are already one of the leading countries in the world serving more than 80 million customers. Customers are sending money, paying bills, recharging our mobile phones using MFS. However, we have achieved less than 10% of what FinTech can do for the people of Bangladesh. We expect to see more expansion of these services and usage in areas such as deposits, savings, credits, insurance and simple QR code based payments.
From the country perspective, this enables providing services to 75% unserved and underserved population. Expanding financial services will empower common people and SMEs thus improving their quality of life which will drive economic growth of the country.

What is SureCash? Please tell us more about its services.

Dr. Shahadat Khan
CEO, SureCash

SureCash is a leading FinTech brand in Bangladesh. We are serving more than 20 million customers, and 1,000 payment partners in partnership with 4 banks in Bangladesh, including one of the largest public banks, Rupali Bank. We offer comprehensive mobile banking and payment services such as person-to-person transfers, bill payment and education payment. Customers can cash in/out at more than 180,000 retail agents nationwide.
We have developed a digital payment platform technology and software that is used for SureCash services. The software is developed in-house by young engineers of Bangladesh bearing the desires and needs of the people of Bangladesh in mind. Having our own technology helps us to add new products and services quickly, customize for new use cases, and integrate easily with external payment partners.
Few areas where SureCash is unique is in the payments and digitization services. For example, in close cooperation with the Ministry of Primary and Mass Education (MoPME) and Rupali Bank, we are doing stipend disbursement under which 10 million mothers in 80,000 villages get stipends all over the country. This has helped to increase the attendance of the primary school students and empower women across the country by providing digital bank accounts. Under this project 67,000 primary schools have been digitized. This is the largest payment digitization project in Bangladesh inaugurated by Honorable Prime Minister Sheikh Hasina on 1 March 2017 and we’re very fortunate to be a part of this
We have also created software-based solutions for 15 government sugar mills managed by Bangladesh Sugar & Food Industries Corporation, where the whole process of procurement and payment system is automated. Now, 12,000 sugar cane farmers are paid on time with the help of streamlined, transparent and efficient payment process.

Why develop FinTech software inhouse instead of getting quality software from renowned vendors?

Being a tech person, it is natural that we will develop our own software solution. When you want to provide digital financial services in a country like Bangladesh, you want to develop solutions which are suitable for its people and cultural context, and for that we need flexibility and control which is only possible through inhouse development.
I have worked with the local talents and I know that we can develop very good solutions which are flexible, scalable and cost effective. Because sometime in the near future if you want to have a technology to be used by 100 million people, it will be very expensive. Development using local talents will be cost effective and investment friendly.
Furthermore, having our own technology gave us a lot of flexibility and strengths in providing services much beyond the MFS business. As I’ve mentioned earlier, we provide custom based software solutions to different education and agro sectors to digitize their system which enhances operational efficiency and end user experience.

What do you think about the Bank-FinTech collaboration in respect to industry?

FinTech enables creating new customers for financial services and new products and services for existing customers and businesses. On the other hand, banks form the foundation of the financial system in a country. Banks and FinTech organizations have a great opportunity to collaborate and benefit from the business expansion.
SureCash is a very good example of a Bank-FinTech collaboration. We are working closely with 4 banks in Bangladesh including Rupali Bank, one of the largest state-owned banks in Bangladesh. With software and technical support from SureCash, the bank launched Rupali Bank SureCash – a comprehensive mobile financial services for mass people in Bangladesh. Here, SureCash is providing software and technology for customers as well as distribution support for retail agents. Our experience working with banks is very positive and we still have a long way to go.

How far are we from becoming a cashless society?

It is very difficult to say when we will have a cashless society, but we know for sure that in a few years we will have a less cash society. We have seen early signs of that in some parts of the world but the proliferation of FinTech will definitely improve that significantly. Being able to do your transactions from your own phone without requiring any POS machine, makes it very simple and easy to adopt and scale in a country like Bangladesh. For example, if you look at some of the developments in China and India, a lot of the day-to-day transactions, such as grocery payments and bus tickets are all paid just by scanning a QR code using the phone.
As the use of smartphones grows in Bangladesh, from the current level of 30% penetration, we will see more people using smartphone based payments and reducing reliance on cash.

When it comes to using technology, how do we ensure security so that consumers are more encouraged to become cashless?

Of course, when we talk about technology, one needs to think about security as well. Whenever we talk about financial services, we need to talk about risks and security and FinTech is not beyond that. Security should start with the customers- like customer awareness, and them being careful about securing their phones and PINs. It will always be that young people are more comfortable with technology than older people. But in the rural areas we face the bigger problem. There is an uncertainty of people being able to read our messages or not. Therefore, every time you do a transaction, you get an SMS in Bangla. So, all of us need to work together to increase people’s comfort and confidence for digital financial services.
As for the providers, we need to be concerned with the security risks and employ the latest security measures available.Collaboration of all stakeholders including Bangladesh Bank, relevant government departments such as the ICT Division, financial institutions, universities and industry technology experts must work together to improve our readiness against cyber-security threats. To address this, priority has to be given to increase awareness from all ends- from data system engineers to business managers and owners to end users.

What role do regulators play for the development of FinTech?

Regulators have a very crucial role to play in the introduction, expansion and regulation of FinTech. Majority of FinTechs are quite new technologies and innovative ways of providing services. We have witnessed that regulators around the globe are in constant touch with the market players to understand the dynamics and develop policies to support the expansion of this service to the greater mass in a secure and responsible way.
Bangladesh Bank is playing a leading role in the development of the financial services sector using policy and regulatory support to adopt technology-based financial services and payment systems. We work very closely with the Bangladesh Bank and the other banks in designing, developing, and monitoring the services to ensure that we are moving in the right direction. We see that the central banks worldwide are increasing their capacity to support FinTech. Countries like Singapore and Hong Kong have created a new office for FinTech and hired a Chief Fintech Officers to work with the FinTech and financial services sector for proliferation of financial services using technology.

Tell us something about yourself?

Basically, I am a technology person by training and by practice. I studied Electrical & Electronic Engineering in BUET and then served as a faculty of BUET in the CSE department. I went to Canada with a Commonwealth Scholarship and completed my PhD in Computer Engineering. I lived 18 years in Canada, and had the opportunity to work in the IT sector with customers in more than 15 countries. I served as the Chief Technology Officer of Canadian software and technology company Eyeball Networks.
I came back to Bangladesh in 2010 to use my experience in building technologies. I saw great potential for digital financial service to proliferate in this market. This triggered me to come up with a mobile banking platform, and SureCash was born. I’m a hobbyist photographer and love to travel around the world to share and experience digital technologies, like FinTech and innovation.

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