Banks expand e-services during Covid-19

Private banks have scaled up their digital services during the pandemic, thus facilitating transactions and protecting their customers from the deadly virus.  

The services include opening accounts at home, getting remittances on Visa cards and cashless transactions through Bangla QR codes.

According to bankers, the number of customers using such services has also increased significantly, resulting in a hike in digital transactions.

As regards digital service expansion, Siraj Siddiquey (Shakil), head of Digital Banking, Brac Bank Limited, told The Business Standard the future of banking is digital. 

Banks will partner with digital service providers to become more digitised and integrated, he added.

However, government banks still lag behind when it comes to providing digital services in the financial sector. These banks hardly have the digital services like their peer partners in the private sector offer, except for limited-scale mobile banking and ATM services.

Recently, The City Bank has introduced the facility of opening an account at home through an app. After downloading the City Bank Instant Account app, an account can be opened momentarily by submitting required documents including a photo and copy of a national identity card.

Eastern Bank Limited (EBL) has also launched the facility of opening an account through an app. Last June, Dhaka Bank did so by kicking off an online account-opening facility. With the introduction of an Electronic Know Your Customer (E-KYC) system, customers are able to take advantage of this.

As part of digitalisation, each bank has to launch an e-KYC system by December this year.

Sources said if Tk1 lakh or a lower amount is transacted every month, that sort of account can be opened at home through an e-KYC without going to the bank in person. But in the case of a large transaction over Tk1 lakh, one must go to a bank to open an account.

As part of the Digital Bangladesh programme, digital services in the financial sector are slowly expanding. The Covid-19 pandemic has added momentum to them.

There are no precise statistics about to what extent banks' digital services have expanded. However, some related services – such as credit and debit card transactions – plus internet and mobile banking information provide some information.

Credit cards: According to the central bank, credit card transactions in the first quarter (January-March) of this year stood at Tk3,710 crore. In the second quarter (April-June) they decreased to Tk2,135 crore.

In the two months (July-August) of the third quarter, the transactions excelled from what was made in the second quarter. During the two months of July and August, credit card transactions amounted to Tk2,804 crore.

Debit cards: The withdrawal of money and purchases through debit cards declined in the second quarter compared to those in the first quarter of the year. However, in the July-August period of the third quarter, there were  nearly the same amount of transactions as the amount in the second quarter.

Turnover in the first quarter was Tk45,182 crore while in the second quarter it was Tk32,658 crore. The transactions in July-August of the third quarter were Tk31,325 crore.

Internet banking: In the first quarter of the year, the amount of transactions through internet banking totalled Tk19,556 crore. In the second quarter they reduced to Tk17,617 crore. In the third quarter of July-August, there were transactions worth Tk1,355 crore.

Mobile banking: In the first quarter of the year, the amount of transactions through mobile banking was Tk1,23,221 crore. In the second quarter, it decreased slightly to Tk1,21,235 crore, and in the third quarter, it increased by Tk32,300 crore to Tk1,53,524 crore.

Remittances on Visa cards: The facility of withdrawing remittances through Visa cards was introduced during the pandemic. Brac Bank and Eastern Bank Limited were the pioneers of this service.

The customers of these two banks no longer need to go to the bank to withdraw remittances, this can easily be done from a banks' booth with a Visa Debit Card. No extra charges apply for this service.

Initially, remittances sent from Malaysia, Singapore and Japan can be withdrawn through this card.

Bangla QR codes: Another digital service launched during Covid-19 is the Bangla QR Code. This code can easily be scanned to make payments.

This service was first launched by Eastern Bank. Later, The City Bank and Mutual Trust Bank (MTB) also introduced the service.

Asked about QR codes, Ahsan Ullah Chowdhury, head of Card and Digital Banking, EBL, told The Business Standard that this facility is available at some chain shops in Dhaka, but preparations are under way to take it to the retail level in future.

He said customers are becoming enthusiastic and accustomed to digital services as they prefer maintaining social distancing during the novel coronavirus. 

In the wake of fear that money may contain germs, they are more inclined to do transactions from home. Older customers who are technophobic are also overcoming their fears, said Ahsan Ullah Chowdhury.

He hopes that the trend of availing digital services in the financial sector will continue even after the pandemic is over.