Pro-active action needed to protect fraud in MFS: PRI

With good news comes the bad news!

As access to digital or mobile financial services (DFS/MFS) reaches remote corners of Bangladesh, scams, theft, consumer security and privacy breaches the industry as well.

So, to ensure digital governance secure, pro-active action of all operators is needed in the days to come, said experts and stakeholders while addressing a webinar titled "The State of DFS Consumer Protection in Bangladesh" held on Wednesday.

The Policy Research Institute of Bangladesh (PRI) and Friedrich Naumann Foundation for Freedom Bangladesh jointly organised the webinar. 

Dr Ahsan H Mansur, executive director of PRI, moderated the event. 

Presenting a survey report, Dr Ashikur Rahman, senior economist at PRI, depicted that nearly one in every ten MFS users (9.3%) has been victims of fraudulent experience of some form.

The survey report also found that Sylhet Division has the highest propensity of fraud – more than three times of the national average.

Dr Ashikur Rahman and his team made the report after conducting a survey on a sample of 9,279 individual respondent data points, drawn from over 300 upazilas, using two stratification points – urban/rural and male/female. 

The survey was conducted to identify primary consumer protection issues in mobile financial services in Bangladesh and existing regulatory arrangements. 

It also looked at the socioeconomic profiles, and the quality of their experience with the services, and their propensity to fraud. 

 Participating in the panel discussion, Kamal Quadir, chief executive officer at bKash Ltd, the leading MFS provider in the country, said fraud in the digital transaction is an industry problem as it is happening across the market.

"It is not a problem of a single operator. Therefore, everyone has to do the fraud prevention related work or act and it is an industry challenge," he said.

To prevent the fraud, he said bKash has run multiple fraud prevention campaigns and they did it spontaneously.

Talking about the outcome of such campaigns, Kamal Quadir said there is a media report that in four months of the last year, 25 e-commerce platforms defrauded customers of around Tk 6,050 crore, and the money was received through payment gateways such as Nagad, Software Shop Ltd (SSL), Foster Corporation, bKash and Shurjomukhi Ltd.

"Of the amount, around 30% was dialed by Nagad while bKash share was only 5%," he noted.

He said, "bKash's transaction share was not high because some proactive action has been taken. We closed the accounts; we took the due diligence properly."

Emeritus Fellow of Unnayan Shamannay Khandaker Shakhawat Ali said the main reason for the fraud is the PIN number sharing with others, which mostly happens with the users who handle remittances.

Sonia Bashir Kabir, founder and managing partner at SBK Tech Ventures and SBK Foundation, said, "We have required devices, infrastructure and connectivity for MFS services, but a lack of awareness and literacy is the reason for fraud."

Beside consumers' protection, she also asked the authority concerned to put emphasis on the consumers' rights.

In the opening remarks, PRI Chairman Dr Zaidi Sattar said like unproductive defence spending, massive amounts are being invested by the government in cybersecurity to ensure that e-commerce and DFS are secure from the onslaught of hackers and scammers.

"Therefore, digital governance must be made watertight with strong guardrails to ensure all consumers are fully protected. In particular, the rural population in remote areas, hitherto left out in the digital divide, must be given robust protection under a system of digital governance that imparts a good sense of security for their monetary transactions."

Speaking as the chief guest, Posts and Telecommunications Minister Mustafa Jabbar said fraud is not happening only in the MFS platform alone, such fraudulence was seen earlier as well and destiny is the big example. 

"Customers are being victims of fraud due to their greedy habit and lust. To prevent fraudulence, we need to control our lust and ensure the proper use of the technology," he added.