Automation in financial services in Bangladesh started with internet banking services. Online banking is commonplace now. According to Bangladesh Bank data, 87% of bank branches in Bangladesh are online and 8% are partially online, meaning 95% of bank branches in Bangladesh can do virtual banking. While 95% online coverage for bank branches is an impressive number. statistics are meaningless without proper context. 

So, when we know that according to financial inclusion insights, only 35.3% of the Bangladeshi population has access to banks, then the 95% availability of online banking is certainly not enough coverage for digital financial services and financial inclusion. While mobile financial services (MFS) played a great role in boosting financial inclusion in Bangladesh in a fairly short period, for several reasons, we cannot say it is performing up to its potential. 

In this growing economy of 166 million people, we have already achieved 94% mobile internet penetration and mobile financial services accounts for the majority of digital payments (PwC, 2019). However, a large part of the digitization is still limited to peer-to-peer (P2P) fund transfer, and that too is mainly by over-the-counter (OTC) users, not by registered users. 

44.4% of the Bangladeshi population has access to mobile money, but only 16.9% has a registered account. And 64% of mobile money users are over the counter users who don't have registered accounts (Financial Inclusion Insights, 2018). This signifies that there is a clear lack of adequate adoption of MFS.

The adoption of MFS is at a very basic level in terms of service portfolio as well. For further financial inclusion, agent banking services have been initiated and almost 20 banks now have a banking operations. While it has covered a lot of the unbanked population and eased the banking process with a biometric system, current agent banking activities are primarily limited to deposit and transfer, and loan services are rarely available to the rural agent banking users. But now deposit machines are available. For this reason clients can easily deposit there money any time. 

Hence, the current situation denotes that our version of mobile digital financial services offers only agen deposit accounts, money transfer, and payment solutions. And in most cases, it has not been able to include crucial services like credit and insurance for rural and unbanked users. For existing digital banking, we have mobile apps and plastic cards, but according to Bangladesh Bank, 87% of our card transactions are ATM transactions, meaning the primary usage of cards is withdrawing money and it has not been widely accepted as an alternative to cash. 

To establish environment friendly and hassle-free financial system, a lot of challenges need to be taken care of. Other than the lack of adoption, one major issue is the lack of interoperability. While each system is somewhat digital, they are not fluid. For that reason, one user must rely on several services of several operators to avail all financial services. From the service providers' end, the lack of partnerships is also responsible for this. This lack of interoperability is also a big obstacle in the way of achieving a cashless economy. 

A truly digitized financial system requires a secured, contactless, and converged financial platform This platform should be flexible enough to include new technologies like improved apps and artificial intelligence-based customer intelligence. For the users, it means ease of usage, fluid transfer of funds, and greater flexibility in payment methods. And for the service providers and merchants, it means less redundancy, greater security, and harnessing strategic partnerships for better customer services.