Strategic Roadmap for Dutch Bangla Bank Limited for Mobile Financing

Maleeha Tatannum

Table of Contents

1. Context:
Bangladesh is one of the least developed countries in the world. But recently she is going through a growth phase. This economical growth has been driven by two important factors:

o o

Growth in RMG ector ocial trend of elf!"mployment through M"s

#s the RMG sector is growing$ more employment opportunities are being created. %eople are rushing from rural areas to urban areas. &n the contrary$ some people are trying to create employment for themselves as well for others through the creation of M"s. #ll of these are leading to an incremental growth in financial activities li'e money transfer$ loan$ and savings. M!(inancing industry has come at this point to meet the need of financial service of unban'ed as well as ban'ed people via mobile telecommunication technology.

2. Definition of M- Financing Industry:

M!(inancing industry is involved in providing unban'ed population as well as ban'ed population with financial services specially ban'ing services via mobile phone.

3. DBB Ban! Mobile Ban!ing:

Before launching the )utch!Bangla Ban' Mobile Ban'ing$ the financial services were available to a section of the population. There was demand for financial services but it could not be provided through the e*isting ban'ing channels. The e*cluded parts were rural + poor regions and those living in harsh climatic conditions. To open a ban' account which was beyond the imagination of the bottom half of the population of the county now can get access to the financial services through )BB, mobile ban'ing. -n Bangladesh$ ban'ing was branch based where customers need to come to ban' branches to do the ban'ing. Traditional ban'ing is very costly for rural customers . they need to pay numerous charges such as half!yearly service charge$ annual card charge$ government charges and online charge /outstation

transaction charge0. -n addition$ customers also need to maintain a minimum balance in their accounts which tends to be difficult for rural customers. Moreover$ most of the rural people are not educated and thus cannot write che1ue or sign them. )ue to the absence of the appropriate system to address all the above issues$ the rural unban'ed people of Bangladesh remained isolated from ban'ing facilities and services. Before launching of )BB, Mobile Ban'ing system on March 23$ 4533$ there were no means through which to deliver ban'ing services to the rural$ destitute$ unban'ed people of Bangladesh.

To address this untapped and unprivileged mar'et$ )BB, come up with its innovative Mobile Ban'ing ervice with the aim of financial inclusion. # total number of 667 employees$ 287 9pa:ila offices and 45$;<3 agent points are continuously wor'ing together to meet customer re1uirements. Moreover$ 348 )BB, Branches and 4$255= #TMs are also wor'ing as mobile ban'ing access channel for the customers.

". #$%T &nalysis in ter' of TTF Factors:

STRENTH Huge Capital Support Risk-taking tendency Largest number of ATM booths models can be operated in multiple MN s in the country !artnership "ith #o$ernment organi%ations &or speciali%ed technology' ())L has Sybase *+,' a di$ision of SA!' "hich lets them perform "ith more efficiencyCollaboration Technology Capital Culture Capabilities

WEAKNESS Capital Culture Capabilities Customer Competitor Collaboration Lack of proper utili%ation of capital Absence of employee-dri$en culture &ailure of ATM system &ailure in categori%ing market &ailure in compete despite being the introducer of ser$ice &ailure in collaboration "ith agents and creati$e media

OPPORTUNITY #o$ernment . N# s/ financial support for M-&inancing to use ser$ice as a de$elopment tool Non-branch banking is getting popularity in )angladesh Many banks are no" offering non-branch banking facilities- A person can "ithdra" or deposit money in any branch of the bank he has account "ith- So mo$ing to mobile banking "ill allo" the banks to offer non-branch banking facilitiesMobile telecom has +,-001 penetration in )angladesh- So a ser$ice offered through the mobile phone "ill be "idely accepted in the near futureSM2s is a social trend RMG sector workers are a potential market Untapped banking market of more than 9 Crore Almost e$eryone o"ns a mobile phone in our country no" Mobile phones does not need to be SMART!H N2 to ha$e access to the ser$ice Soft"are de$eloping industry is a gro"ing industry Technology Capital Collaboration Culture Capabilities

Collaboration

Customer' Culture Customers

THREAT

Capital

)angladesh )ank limits transactions limit )(T 3,'444

Customers Culture Technology State . Society Capabilities Customers Technology Collaborators State & Society

!eople ha$e concern about security and pri$acy- They like to feel their money "ith their hand- They may percei$e that $irtual money transfer is not actual transfer5n the field of 5T ne" technology is coming e$eryday- ne "hich is $ery popular today might get obsolete tomorro"- So' to ha$e a competiti$e edge o$er the competitors the banks must al"ays update their ser$ices- )ut the challenge is to create a"areness and make it belie$able to potential clientsA mobile handset may not easily be operated to handle banking transactions as most of our people do not ha$e sound technological kno"ledgeHighly dependent on the agents and the telecom partners(ifficulty in determining the "rongdoer in crimes like money laundering' terrorist financing-

5. Two most significant strategic issues DBBL is facing at this point of time:
(.1 T)o Most I'*ortant #trategic Issues:

(.2 #ignificance of #trategic Issues:

5.2.1 Ineffective Top HR: 5.2.1 .1 Failures in Attracting Market:
B>ash is currently the mar'et leader and has much more mar'et share than )BB, has in the industry. But b>ash actually entered into the mar'et later. )espite being the introducer of M!(inancing in Bangladesh$ )BB, has failed to gain the largest mar'et structure. This is mainly for insufficient promotional activities.

This refers to the lac' of pro!active strategy in the organi:ation.

uch strategy is ta'en by the top

management of the organi:ation. o$ ineffective top management is responsible for this.

5.2.1.2 Failure in Establishing Employee-driven ulture:

)BB, is one of the most important national ban' in the country. (rom its inception$ it has been wor'ing for the betterment of country and society. ?owever$ )BB, has failed to create an employee!driven culture inside organi:ation when employees are given focus as a ma@or determinant of performance of organi:ation. #s there e*ists no employee!driven culture in )BB,$ the intellectual young people do not feel the place attractive to wor'. These young people give value to freedom of wor'ing$ opportunity of sharing ideas and innovation in their wor'ing place. Thus$ )BB, is failing to attract the best people in the country. "mployee!driven culture is established through the friendly$ encouraging and at the same time performance!driven style of leadership$ monitoring and wor' distribution of the top management of an organi:ation. o the failure in creating employee!driven culture in )BB, is a result of ineffectiveness of the top management.

5.2.1.! A"M #ystem Failure:

)BB, has come up with the idea of e*tending availability through numerous #TM booths. Then$ it has collaborated with other ban's in regard with sharing #TM booth resources. ?owever$ it often faces technical problem regarding #TM booths. The system sometimes fails in particular location and sometimes even the whole system fails. This issue costs much in two ways:

o o

-t can damage the goodwill of the company -t needs financial costs to re!run the system

)BB, has capital support.

o it would have ensured proper maintenance of these #TM booths and #TM

system. -f it were not sure of its capabilities$ it would not have ta'en that strategy at the first place. Ahen it went for this strategy$ it would have ensured proper maintenance. Thus$ )BB, has failed to provide better service through strategic moves as they have failed to properly implement strategies. #s formulation and implementation of different strategies are the responsibility of top management$ the top ?R of )BB, is somehow ineffective.

5.2.2 Poor Collaboration: 5.2.2.1 Failure in $uilding %et&ork o' Agents:

)espite being a follower$ b>ash currently is the mar'et leader. trong networ'ing strategy with agents has made the b>ash more available and accessible everywhere. -n fact$ this is one of the success factors of b>ash. )BB, has watched this strategy of competitors and yet has not ta'en any reactive strategy. (ormulation and implementation of such reactive strategy is a 'ey responsibility of top management. this also points out ineffectiveness of top management in )BB,. o

5.2.2.2 (ack o' ollaboration &ith reative Agency ) Media:

&ne of the reasons behind why everyone in the remotest corner of the country is familiar to b>ash is their heavy promotion and powerful branding. )BB, has its own promotion which has turned out to be insufficient in term of creating consumer awareness. Ahen the awareness is not sufficient$ the other 2 factors of #-)# model will not wor'. ?ence$ )BB, is lagging far behind from b>ash in term of mar'et share holding. -f )BB, has proper collaboration with proper creative agency and media$ the situation might not be the same.

5.2.2.! (ack o' ollaboration &ith Agents:

#s already mentioned$ strong networ' of agents is a 'ey factor in the success of b>ash. Being the pioneer$ )BB, would have had collaboration with the largest networ' of agents. )ue to lac' of collaboration with agents$ M!(inancing services of )BB, are less available and accessible for consumers. #t the same time$ consumers are less aware of the service. This is because agents also wor' as a word! of!mouth.

6. Strategic Move:
+.1 Mo,es to be ta!en for Better To* Manage'ent:
6.1.1 Creation of Talent Pool:
Through collaboration with reputed universities in the country )BB, can create a talent pool. uch talent pool will ensure best human resource whenever is re1uired. )BB, can recruit fresh graduate in the talent pool. This will ensure the best people are at the top positions to move the organi:ation forward.

6.1.2 Fair Reward Package:

The world mar'et is very competitive. # ma@or determinant of individualBs @ob preference is fair reward pac'age. o if )BB, wants the best people at the top positions$ it should ensure fair and competitive reward pac'age.

6.1. Creation of !"plo#ee$driven C%lt%re:

Coung$ intelligent people$ as stated earlier$ give more value to freedom of wor'ing$ opportunity for innovation and creativity$ chance for sharing ideas$ recognition of their efforts at their wor' place. #ll these factors are ensured when an organi:ation has a improved$ employee!driven culture. By developing such culture$ )BB, can ensure it has the most effective people at its top positions.

+.2 Mo,es to be ta!en for -aining Mar!et #.are t.roug. Collaboration:

6.2.1 Partner&'ip wit' (gent&:

%artnership with agents will help )BB, to ma'e their M!(inancing service more available and accessible everywhere in the country. Thus$ it will help to gain mar'et share.

6.2.2 Partner&'ip wit' Creative (genc# ) *edia:

To increase consumer awareness regarding the M!(inancing service offered by )BB,$ it needs to be branded in the proper way. The service also needs to be promoted a lot. The service can be promoted as a brand instead of as a service of )BB,. To do these types of things$ )BB, needs to be collaborated with creative agency and media.

6.2. Collaboration wit' R*+ ,wner&:

)BB, can collaborate with RMG owners in particular locations. -f the garments factory ma'es aware and encourage its employees to use the service of )BB,$ )BB, will be able to attract new consumers.

6.2.- Collaboration wit' .*! ,wner&:

b>ash has focused on money transfer issue despite the fact that they have tried to brand as a facilitator of M"s. )BB, can e*ploit this opportunities. They can collaborate with business activities. M" owners and offer ban'ing services li'e saving deposit$ withdrawal$ overdraft$ payment which are needs of M" owners in their daily

6.2.5 Collaboration wit' +overn"ent:

Dollaboration with government can be a very strong strategy for )BB,Bs M!(inance. Dommon public is irritated of government system while they have to waste a lot of time and money in the payment of utility bills$ ta* or in the collection of transfers and pension. )BB, can collaborate with government so that common public can do these sorts of stuffs via mobile phone technology.

6.2.6 Collaboration wit' /evelop"ent ,rgani0ation& ) 1+,&:

)evelopment organi:ations and EG&s wor' for the development of specific functional sectors and consumer segments. (or e*ample$ there are organi:ations that focus on street people or se*!wor'ers or slum!dwellers. Ahile wor'ing with these people$ development organi:ation and EG&s need to ensure the financial inclusion of those unban'ed population. By collaborating with development organi:ations and EG&s$ )BB, can e*tend its helping hand to those underprivileged people via its M!(inancing ervices.

7. Model synthesizing Strategic Moves:

/.1 Cor*orate e,el Model:

/.2 Business e,el Model:

/.3 Functional Model:

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