Current Status of E-Banking Md. Mahbubur Rahman Alam Associate Professor, BIBM Bangladesh Institute...

Current Status of E-Banking

Md. Mahbubur Rahman Alam

Associate Professor, BIBM

Bangladesh Institute of Bank Management (BIBM)

2

Classification of Banks According to BB Guideline

Source: Survey Information

3

Computerization of Bank Branches 1998-2014

Source: Survey Information

4

IT Investment 2011-2014 (Crore)

Total investment up to 2014 was estimated at Tk. 23,149 crore since

1968 (considering the installation of computer at Agrani Bank in 1968

which was the first installation of computer in the banking sector of

Bangladesh).

5

IT Budget Allocation: 2011-2014

Source: Survey Information

6

Penetration of Computer (PC) and E-mail ID, 2012 - 2014

7

Intranet Facilities used by Banks in 2013-2014

Facilities 2013 2014

Bulletin board service (BBS) where a message is displayed

instantly to be seen by all employees who logs into the

system.

20 40

To view employee information (name, designation, phone,

email etc.)27 48

Bank’s circular with a search engine 20 52

Group collaboration service where a group of employees

working in a task force can collaborate to execute their

activities. Audio / video chatting with IP phone.

20 25

Attendance of employee through user login 13 16

8Source: Survey Information

Some Important Ratios

IT Employees : Non IT Employees2011 2012 2013 2014

Min Max Min Max Min Max Min Max

State-Owned 1 : 100 1: 206 1 : 99 1 : 203 1 : 95 1 : 201 1 : 92 1 : 198

Specialized 1 : 32 1 : 523 1 : 31 1 : 519 1 : 31 1 : 512 1 : 30 1 : 508

Private 1 : 26 1 : 92 1 : 26 1 : 88 1 : 22 1 : 85 1 : 20 1 : 82

Foreign - - - - 1 : 15 1 : 35 1 : 14 1 : 35

IT Employees : Computerized Branch2011 2012 2013 2014

Min Max Min Max Min Max Min Max

State-Owned 1 : 7 1 : 14 1 : 7 1 : 13 1 : 6 1 : 14 1 : 5 1 : 13

Specialized 1: 15 1 : 54 1: 15 1 : 54 1: 15 1 : 54 1: 15 1 : 51

Private 1 : 0.5 1 : 2.6 1 : 0.5 1 : 2.1 1 : 0.85 1 : 3.6 1 : 0.81 1 : 3.4

Foreign - - - - 1 : 0.65 1 : 2.1 1 : 0.62 1 : 2.1

9

Classification of Banking Software (% of Banks)

Source: Survey Information

10

Replication and Clustering (% of Banks)

Source: Survey Information

In 2011, only 78% banks had real-time database replication

technology, whereas in 2014, it increased to 84%. However,

research findings show that, still 16% banks may not able to

provide accessibility of data in case of any technical fault in the

production database server.

Types of Clustering 2011 2012 2013 2014

Clustered Network Server 8 8 8 14

Clustered Database Servers 69 73 73 76

Clustered Application Servers 23 23 24 28

11

Application Software

On an average 23, minimum 6 and maximum 80 application software are

being used in the banks. Minimum 40% to maximum 100% are web based.

But on average around 80% software are based on three tier web based

architecture.

System Software (OS)

Source: Survey Information

Client ServerLicensed 97.7253 88Free 2.27468 12

Client OS %Windows 97.0093Linux 0.23605Google 2.14592Unix 0.49356Mac 0.02146

Server OS

13

Data Center and Disaster Recovery Site

Source: Survey Information

71% banks have centralized database operations through data center

having DRS. Only 16% banks have Certified Data Centre Design

Professional (CDCDP).

31.5% banks test it monthly.

12.5% banks test it Quarterly.

28% banks test it half yearly and

17.5% yearly.

Rest of the 10.5% banks did not

mention their testing duration.

50% of the banks are afraid of testing

the disaster recovery site by shutting

down the data center any time!

Types of DRS 2011 2012 2013 2014

Hot 69 72 72 74

Warm 16 16 18 17

Cold 15 12 10 9

14Source: Survey Information

In case of any disaster, disaster recovery plan plays an important

role. About 33% banks have approved guidelines of BCP/DRP.

Among the banks all are following the BB ICT Security Guidelines

and 20% follow ISO standard in addition. Only 15% banks have

separate BCP and DRP department. Minimum, maximum and

average number of employees are working in these departments

are 3, 12 and 6, respectively.

Disaster Recovery Plan (DRP)

15

Dual Communication Link Used in Online Branches/ADCs

Source: Survey Information

Name of Link

% of Total Number of Links Used

2011 2012 2013 2014

Optical Fiber 58 67 69 77

Radio Links 24 23 23 15

Satellite/VSAT 8 3 3 2

Others 10 7 5 6

16

At the end of 2014 only

64% banks provided

some sort of Internet

banking services in

Bangladesh, which was

61% at the end of 2013.

Internet Banking

17Ref: 3.18 Page -24

Internet Banking Facilities

Sl. No.

Internet Banking Facilities 2013 2014

1 Fund Transfer (Customer’s A/C to A/C transfer) 29 52

23rd Party Fund Transfer (One customer’s A/C to another customer’s A/C)

21 40

3 Credit card bill payment 14 32

4 Utility bill payment (Gas, Electricity etc.) 7 12

5 Transfer fund from credit card account to his own A/C 0 0

6 Transfer fund from Bank A/C to his mobile banking A/C 0 4

7Transaction history of all accounts of the same customer

36 64

8Transaction history of all loan accounts of the same customer

21 60

9To view the Credit card information of the same customer

7 7

10To view the Mobile banking information of the same customer

0 0

11 iRecharge (Mobile Airtime Top Up) 21 40

12 Wimax Recharge 14 22

18

Internet Banking Problems

19

There were 5,661 ATMs

in Bangladesh at the

end of 2014. Most of the

ATMs are installed in the

divisional cities and

district level. Around

49% ATMs are installed

in Dhaka. A very few

ATMs are being

operated in rural areas,

less than 4.84.

ATM Banking

20

ATM Banking Problems

  2013 2014

Number of Banks Permitted 28 28

Started MFS Operation 19 19

Registered Customers 1,31,80,000 25,186,250 

Agents 1,88,647 5,40,984 

Number of Transactions (Millions) 228.85  589.48

Transactions ( BDT Billion ) 664 1,031.55

A Holistic View of the Mobile Financial Service Status

Source: Data: PSD, BB; Compilation: FSD, BB

Volume of Transaction in Different Delivery Channels (2011-2014)

23

BACH

24

BEFTN

The Bangladesh Electronic Fund Transfer Network (BEFTN) started

its operation on 28 February 2011. On average, approximately

20,950 EFT transactions were processed in a day in 2012. The total

monetary amount of EFT transactions under BEFTN in 2012 and

2011 was Tk. 284.3 and 18.7 billion, respectively. On average,

approximately 21,072 EFT transactions were processed in a day in

2013. Total monetary amount of EFT transactions under BEFTN in

2013 was Tk. 396.1 billion, which is 44 percent higher than 2012.

25

Trends in Technology Adoption 1998-2014

Source: Survey Information

26

Types of Training Provided 2011-2014 (% of Total Training)

Source: Survey Information

58 % of CTOs are not Satisfied !

Only 2% IT Budget goes to Training !

27

Why Training was not Provided?

Bangladesh Institute of Bank Management (BIBM)

Thanks for Patience Hearing

Current Status of E-Banking