Nagad, a popular mobile financial service of the country’s postal department, is making its efforts to digitalise the financial sector of Bangladesh riding on advanced technology and pioneering innovations.
It all began when the fastest growing mobile financial carrier introduced electronic know your customer (e-KYC) process for the financial industry, replacing a time-consuming paper-based system and changing the whole ecosystem for the good in 2019 while their journey started.
Such was its impact that, not only MFS operators in Bangladesh but also banks and other financial companies have introduced the process as it helps them bring down the cost of doing business significantly and ensure digitalisation.
Undoubtedly, it was the biggest innovation in the financial industry of the country which also pushed the industry to the road of digitalisation, said industry experts.
But the biggest change that has happened in the MFS industry in Bangladesh since its inception more than a decade ago was a short code that is helping mobile phone subscribers to open an MFS account instantly and in the easiest way imaginable.
Because of the *167# short code, the information of mobile users has become a huge asset for the industry, and Nagad has shown the way how it can be used to change the system to benefit the potential users.
Both measures helped people across the country, particularly from the unbanked groups and the people living in the hinterland, to jump on the bandwagon of the MFS, accelerating financial inclusion.
Nagad, which began its official journey in 2019, is resting on its laurels.
It showed the government that the country can reach out to the vulnerable and needy population with its social safety net funds in the most effective way, which is also transparent and cost-effective.
Soon after the devastating pandemic hit Bangladesh in March 2020, leaving millions of without incomes and jobs, Nagad successfully convinced the government to use the MFS system to support the people during the pandemic maintaining social distancing requirements.
In the last fiscal year, the government distributed financial assistance worth Tk 100 billion among 30 million people.
Thanks to the use of the MFS system, the government has been able to eliminate leakages from the system and cut the cost of disbursement by half, savings taxpayers’ money and maximising benefits.
Nagad has cut the cash-out charge to Tk 9.99 for every Tk 1,000 withdrawal, helping users save immensely. It has made sending money free. Both measures have inspired more people to use digital financial service.
“Nagad is leading the change from the front,” said Tanvir A Mishuk, managing director of the fastest growing mobile money carrier in the country.
“We are on the constant move to adopt the state-of-art technologies. We are always innovating and that also helps us to reduce costs for the users,” he added.
Thanks to the technological upgradation and innovative solutions, Nagad is currently the second-largest mobile money operator in Bangladesh with 57 million customers in a market of 100 million.
Today, about Tk 7.0 billion is channeled through Nagad daily, accounting for 35 per cent of the money each day going through the growing MFS segment in the country.