This document discusses strategies for increasing financial inclusion among unbanked populations in developing countries through technological innovation. It provides the following key points: 1. Large rural populations, illiteracy, low incomes, remote locations, and lack of traditional banking infrastructure limit financial inclusion. Technological solutions like mobile phones, debit cards, and agent networks can help reach the unbanked. 2. A case study of Bangladesh found that while only 14% of its 150 million people have bank accounts, mobile phone penetration is 68%, showing potential for mobile financial services. 3. The document outlines Bangla Phone's mobile banking platform, which uses SMS, USSD, web/mobile apps to provide services like account access,

1. Reaching the ‘unbanked’
through technological
innovation
Amjad H. Khan
CEO,
Bangla Phone Limited

2. What limits financial inclusion
in developing countries?
Large rural population
 High illiteracy
 Low income
 Remote areas
 Lack of focus by banks/financial
institutions
 Poor coverage by banks/branches
 Unprofitable for providing
traditional banking services

3. Who are the unbanked?
• Underprivileged
people in rural and
urban areas
• People involved in
the informal sector
• Agricultural and
Industrial workers
• Unemployed
• Women & old
people
• Physically
challenged people

4. Technology solutions used
by banks
 A number of technological solutions have been deployed
over the years to provide any branch or branchless banking
services, including:
1. ATM
2. Debit Card
3. Credit Card
4. Online/Internet banking
 However, all of these solutions/services are exclusively
targeted towards the existing bank customers, enhancing
their choices/convenience

5. Technology solutions & innovation
to reach unbanked
The unbanked can only be reached
through transformational branchless
banking by tapping into infrastructure
that already reaches the rural/remote
areas.
Such branchless banking may
include a combination of technology
solutions and an innovative approach:
1.Technology-based—mobile
phones, prepaid/debit cards,
POS devices, biometrics,
Internet
2. POS in remote areas
3. Engaging Nonbank Agents (use of
third parties) to expand reach

6. New ways of offering banking services
 The Mobile Phone is by far the
most widely adopted technology
platform in developing countries
 The mobile phone network is the
most readily available
infrastructure to deliver
branchless/affordable banking
services to the unbanked
 Illiteracy is not an issue (they
can already operate a mobile
phone)
 Basic services can even be
delivered through low-end
handsets (SMS/IVR)

7. Bangladesh: A case study
Demographics
• Population: 150 m
• Below poverty line: 31.5%
• Urban population: 27%
• Population under age 25:
nearly 60%
Banking Infrastructure
•Bank Branches: 7,961
•Population having bank
accounts: 22 million(14%)
•Mobile subscriptions: 99
million (68% penetration)

8. Mobile Financial Services
 After several years of deliberations,
Bangladesh Bank issued the
“Guidelines on Mobile Financial
Services (MFS) for the Banks” in
September 2011 (subsequently
amended in December 2011).
 The central bank believes that fully
developed MFS operations can
reduce barriers to access and cost
and over time enable a much higher
proportion of the population to use
basic banking services
 Entry to the formal financial sector
can lead to greater financial
intermediation and contribute to
growth.

9. Mobile Financial Services
Mobile Financial Services up
to June 2012 (excluding
remittance‐only
deployments):
• Banks licensed by Bangladesh
Bank: 23
• Live MFS deployments: 14
• Mobile Accounts Opened:
779,532
• Appointed Agents: 18,581
• Transaction (billion Taka): 10.08

10. Mobile Banking Solution
• Highly-secure mobile banking
access both on regular low-end
mobile handset and also online
through the Internet.
• The Commlink Mobile Banking
platform is secured through strong
encryption techniques and access
authentication.
• Easy-to-use customer interface has
been designed to ensure maximum
satisfaction.
• It is modular and flexible, supports
various channels.
• Supports SMS, USSD, IVR,
GPRS/EDGE/WAP, Web Client
and any other potential delivery
channel.
Bangla Phone along with its sister-concern Commlink Info Tech
Limited has developed a complete Mobile Banking solution
•Easy to Interface with any system that
supports web services.
• Session based authentication system.
•Can be integrated with any retail
outlets like chain grocery stores and
other merchant outlets
•Interface with Remittance Agents,
Cash-in partners, etc.
•Agent Management module is also
included

11. Service Features
• Account Opening/registration
by alternative methods
• Cash in/Withdrawal
• Send/Receive money
• Mobile top-up
• Account statement/Balance enquiry
• Utility bill payment
• Foreign remittance
• Merchant payment
• Salary disbursement
• Tax Payment
• Government allowance disbursement
• Insurance payment collection
• Payment History Management
• Dispute Resolution
• Advanced Reporting
• Advanced Site Management
• Automatic Notification Generation
• Other customized features can be added

12. Security Features (1)
• The Commlink Mobile Banking solution has adopted
a robust security model to protect the users which is
device independent.
• It has enterprise-level security encryption capabilities
and even temporary data stored in the device are
encrypted.
• The platform requires the use of ‘activation number’
for the authentication of the software and a PIN code
to authenticate the user.
• Our system is completely web based. Security
measures have been considered using typical website
vulnerability:
• Remote code execution
• SQL injection
• Format string vulnerabilities
• Cross Site Scripting (XSS)
• Username enumeration
• Secured User/Agent management
• Total hierarchical management control of every
transaction at any given time.

13. Security Features (2)
• Confidential pages are secured through
PKI (Public Key Infrastructure) using
HTTP over TLS.
• Combination of User Name, Password &
PIN for authentication.
• All the transactions in our Internet
Banking Solution are highly secured
through the use of https (http over
SSL/TLS).
• This ensures the use of public key
infrastructure (PKI)
• Our system supports two factor
authentications as we introduced and
incorporated SafeNet Ikey (USB Token)
into our system.
• Role based system management for
Access Control List (ACL) facilities for
bank users
• In addition, for the first time in
Bangladesh, biometric identification is
also being deployed to confirm the user.
The above tablet with finger print scanner
is custom-made and can also be used to
scan finger prints before selling a SIM
card for later identification, when needed

14. Mobile Banking Solution
• Bangla Phone Limited along with its
sister-concern Commlink Info Tech,
are jointly offering to set up a complete
end-to-end mobile banking solution on
a turn-key basis.
• The Commlink Mobile Banking
platform is compatible and easy to
integrate with the existing banking IT
systems.
• It would include the mobile banking
platform, related products, system
integration and other professional
services.
• The mobile banking platform can be
further customized to meet any
particular requirements of banks or
financial institutions.

15. Mobile Banking Solution
 The Bangla Phone-Commlink
consortium is presently
implementing a mobile money and
e-commerce solutions called Post e-
Pay and Post e-Shop on a turn-key
basis for the Bangladesh Post
Office
 It will play a key role on reviving the
fortunes of the postal office.
 It will be introduced through all the
10,000 post office branches around
the country. In addition, over
100,000 agents will also be
appointed.
 The touch-points will be equipped
either with a lap-top (post offices) or
a handheld tablet (agents) and will
have wireless online connectivity.

16. Network Architecture
16
BPO VPN
BPO Head Office
LAN
Internet
Internet Users BPO Employees
Local Post Office
Sylhet
Local Post Office
Chittagong
3rd Party
e-Commerce
Using e-Pay API

17. Bangladesh Post Office Head
Quarter
ePost Pay
Application Server
System Diagram
17
eShop
Application Server Data Center
Mobile App. Server
ePay API
3rd Party
e-Commerce
ePay API
ePay Web
e-Pay User
Local Post Office
Employee
e-Shop User
User
Socket
Rich Client
Application
SMS Alert

18. THANK YOU