Q. Let’s start with a short introduction of your childhood and education.
My schooling was as simple and memorable as a regular child, it was in Feni Government Pilot School. Later, I moved to Dhaka College and completed my Bachelor’s and Master’s degrees in Sociology at the University of Dhaka. After that, I pursued my second Master’s in Banking and Finance from Asian Institute of Technology, Thailand. It was my gravest desire to study economics or engineering from early childhood. Maybe God has his own design, however, I am pleased that my endeavor in digital finance is now a blend of my desired subjects. I am also the first Certified Digital Finance Practitioner (CDFP) in Asia.
Q. Tell us about your career journey.
Working in the Central Bank is always considered to be an honor and a great opportunity. As I was always a seeker of knowledge, this job was a key to a knowledge library from where I can learn many things first hand. Though I had worked in a development organization as a project coordinator earlier, the job at Bangladesh Bank was the handshake of stars. I joined as an Assistant Director in 2006 and worked in banking inspection department. In 2012, I moved to Bangladesh Financial Intelligence Unit (BFIU). Now, I am working in the foreign exchange department.
Q. How did you become passionate about digital finance?
When I was working at BFIU, my responsibilities were to supervise digital financial services (DFS). As a regulator and seeker of knowledge, I felt the need to know more about DFS. The new sector needed guidance from us. To carry out my responsibilities effectively, I should understand the business model of the service providers, how they operate and what are the risks involved. I also needed to have a clear idea about international standards, prudential regulations and practices in other countries. So, I have taken some initiatives to strengthen supervision, capacity building of the stakeholders to promote digital finance in Bangladesh. That includes publication of a study paper, initiate a donor funded project to support digital finance ecosystem, introduce digital finance online course scholarship for central banker and public sector officials; and establish a professional association i.e. Digital Finance Forum Bangladesh.
Q. That’s great to know your initiative! Would you please tell us about the study paper first?
We had noticed that professionals are coming in digital finance from different backgrounds. As a new service, all of us were facing difficulty in understanding the risks associated with DFS. While conversing, I felt that there is a huge communication gap among different stakeholders especially between service providers and regulators regarding risk management. Therefore, we formed a focus group in 2015 with experienced officials from relevant departments of Bangladesh Bank, CID, Bangladesh Telecommunication Regulatory Commission, bKash Ltd., Dutch Bangla Bank Ltd. and Islami Bank Bangladesh Ltd. to analyze risks and find mitigations for mobile money. I was fortunate enough to be the Coordination of the focus group and lead the entire process. It actually took a lot of time to complete the assignment as different stakeholders deal with different aspects of the problem and we didn’t have a common understanding. We wanted to have debate in the focus group to minimize the knowledge gap. We were also not being able to provide training because it did not exist globally at that time. Since digital finance is a blend of financial services and digital technologies, and it proliferated very rapidly in developing countries, no stakeholder perceived associated money launders risks and central banks were implementing bank regulations for it. However, that was not effective basically. So, we made up our mind to clear up this confusion, for this, we had to do a lot of study and had to understand what to apply and what not to. We came up with the ‘Study Paper- AML/CFT Regulations for Mobile Money: Policy Options for Bangladesh’ in 2017 which was the first such detailed policy paper on MFS by any regulator globally. He had analyzed international standards of AML/CFT and how those could be applied for MFS, Bangladesh context and put forward detailed policy recommendations. We have received huge appreciation from local and international audiences. In his message Governor Mr. Fazle Kabir stated “The information, analysis and recommendations contained in the paper will be beneficial to policy makers, service providers, risk managers and researchers at home and abroad.” In the preface, Head of BFIU Mr. Abu Hena Mohd. Razee Hassan opined, “It (study paper) has laid down a clear direction to service providers regarding regulatory expectations on AML/CFT risk management. I am confident that the Paper would be guiding principles for AML/CFT regulations and supervision of MFS in the next couple of years.” FenDev Gateway of World Bank, Alliance for Financial Inclusion, DFS Observatory of Columbia University and Digital Frontiers Institute published review/summary of the Study Paper on their websites. Based on the recommendations of the Study Paper, BFIU issued Circular no. 20 for MFS in 2017 and e-KYC guidelines in 2020.
The study also helped us to take some strict measures including freezing of suspected mobile banking agents’ account to prevent digital hundi in September, 2017. Illegal hundi decreased after our actions and remittance increased by about 35% in October, 2017 compared to the previous month and the negative trend of previous two years was reversed. Through the use of our research observations as big data analytics tool, we had identified suspected transactions. The awareness level increased and the quantity of abuse also decreased significantly. We have learned a lot while working on it. . This is a continuous process and this has also become an example for people working in DFS and its supervision.
Q. You are the first Certified Digital Finance Practitioner (CDFP) in Asia. You have also introduced digital finance online course scholarship for central banker and public sector officials. Would you please tell about your initiative and achievement?
Back in 2016, I was looking for training on digital finance to enhance my knowledge. I found a 12 week long online course Certificate in Digital Money (CIDM) jointly offered by The Fletcher School, Tufts University, Boston and Digital Frontiers Institute (DFI), South Africa. But, the enrollment fee was quite high and I applied for a scholarship. Fortunately, DFI accepted my request and opened a new horizon for me. After the course, I have continued participating in some other courses under partial scholarship and achieved the Certified Digital Finance Practitioner (CDFP) recognition in 2020. It’s a 130 credit program which requires 2 foundation courses, 6 short courses and practical activities. Two Bangladesh Bank and one Grameen Phone officials also received the certification recently.
In 2018, DFI offered scholarships for 10 officials of Bangladesh Bank to participate in the CIDM course. The result of my colleagues was great and 4 of them scored among the global top 10. It was very inspiring and we started to look for more scholarship opportunities for capacity building of central bankers and public sector officials. I discussed with some donor agencies and finally Bill and Melinda Gates Foundation agreed to sponsor the scholarship in September, 2019. More than three hundred executives of Bangladesh Bank completed 1081 courses till December, 2020. Officials of BSEC, BTRC, MRA, a2i Programme, bankers and some other agencies are participating in those online courses. There are 21 courses available in the DFI platform and we are continuing to complete those highly interactive courses. The capacity building program will surely have far reaching impacts on digital transformation in Bangladesh. I really feel great to lead this initiative!
Q. We came to know that you have initiated a donor funded project to support the digital finance ecosystem. Would you please tell us something about it?
I got the opportunity to represent Bangladesh Bank in the Focus Group on Digital Financial Service (FG-DFS) organized by International Telecommunication Union (ITU) since August, 2015 and attended conferences in Malaysia, Switzerland, USA and Tanzania. Digital finance, especially MFS, got huge adoption since 2012 in Bangladesh and became one of the largest markets, but only primary products (Cash in, Cash out and P2P) were available. There was huge room for other products and capacity building of the stakeholders was necessary. With my continuous effort since the beginning, the then Focus Group Chairman and Bill & Melinda Gates Foundation (BMGF) representative agreed to launch a project to support the digital finance ecosystem in Bangladesh. Consequently, BMGF and UNCDFP initiated ‘Shaping Inclusive Finance Transformations (SHIFT) Project’ in 2016. I had developed the primary concept paper and several meetings were held in BFIU to finalize the project proposal. Several policy papers have been developed and many conferences, seminars, training etc. were organized under the project. With the support of European Union, the project is currently working with micro merchants for digitization of their supply chain to get finance from financial institutions. The overall impact of the project on our DFS ecosystem is huge.
Q. Why do you specifically focus on digital finance and what opportunities do you see in the Fintech industry of Bangladesh?
The biggest opportunity that I see is the government’s vision of Digital Bangladesh. A lot of things are interrelated here. Government mechanisms are getting digitized; citizens are increasingly getting services online. During the lockdown, the garments workers salary was disbursed through MFS, e-commerce and online education got huge popularity. So, we must have to adopt digital finance products and services as soon as possible for convenience and avoid health risks during this COVID-19 pandemic. Financial service providers should collaborate with other players including FinTech companies to offer efficient and innovative services. Governments and regulators have a greater role to ensure an enabling environment during this transition. Nationwide data networks are needed to create Digital Bangladesh and the government is actually bringing many changes in this field. All of our data exists in silos now. So, we have to go for a Whole of Government (WoG) approach to establish interoperability and thereby efficiency.
Q. With what vision did Digital Finance Forum Bangladesh start? What are its activities and what solutions is it providing?
We have started our journey as a social media group of digital finance and fintech professionals in 2017. We formed the Convening Committee in 2019. Online conferencing platforms have made things easier for us. Now we are inviting local and foreign experts and audiences in our online events. We have organized many webinars, learning events and meeting in the last few months on different topics, such as digital credit, digital identity, MFS interoperability, digital banking, digital finance in China, India, European Union; regulatory sandbox, Blockchain and crypto currency, Bangladesh economy during COVID-19, etc.
If one attends these programs, it is better for him because we have a practical requirement for CDFP. So, two requirements are being fulfilled in one shot. Luckily, I am able to facilitate the events and could contribute to build a knowledge economy. Moreover, it also builds up our presentation skill and in-depth understanding about relevant topics to advocate policy issues. It’s an open platform and we welcome relevant professionals; and this is how we are moving forward.
Q. How do you think the digital payment system can be more efficient and acceptable to the mass public? What changes would you like to see in this industry?
Well, if we only focus on Cash in and Cash out and ask the provider to reduce fees, then that would be very tough. The agents invest their money for an expectation of reasonable profit. If they don’t get it, they will lose interest and not be an agent anymore. The cost can be lowered, if we replace cash with digital payment. If more merchants and utility services accept digital payment, then the customer adoption would be increased. Interoperability among bank accounts and mobile money wallets is very crucial to reduce the transaction cost. We need to pay excise duty to keep our money in bank account. I think the government should sacrifice this tax revenue. Rather, excise duty should be imposed on cash withdrawal above a certain threshold. Cash management is costly for banks and risky in AML/CFT context. Bank and online transactions can be monitored easily. We have to adopt the carrot and stick policy to encourage digital transactions.
Q. What are your thoughts on the future of e-commerce and the retail sector of Bangladesh?
E-commerce has taken a big leap during Covid-19. One of the major problems faced by e-commerce is not being able to get a trade license. Another problem that exists is trust. E-commerce payment is mostly conducted in cash on delivery (COD) mode, so the risk is really high for sellers. In addition, the customer feedback platform needs to be improved for the rating of the sellers. Escrow account systems should be introduced to hold money by a third party on behalf of transacting parties. Once a customer confirms that he/she has received the intended goods, then the fund would be released to the seller.
Q. How do you spend your leisure and maintain a healthy work life balance?
I am always mentally occupied even when I am not doing anything productive. I have many ideas and intend to do many impactful activities. I enjoy watching movies because movies sometimes inspire and motivate a lot. I look forward to reading books but I do not get a lot of free time to fulfill this wish of mine. I also believe that since I work with policy, it is very important for me to know the history and anthropology of Bangladesh and other societies. I think as a regulator, observing the market is so much important as we can accelerate growth with our foresight and market analysis.
Q. What advice or tips would you like to share for people who want to build a career on digital finance or fintech?
This is a new sector, so capacity building is very important here. I would suggest to stay focused if they really want to pursue their career on digital finance or fintech. They can also do a course for basic knowledge or engage with our Forum. We organize lots of events and discuss contemporary issues.
