The fast-growing mobile financial service (MFS) industry in the country is facing a dearth of skilled human resources, essential for successfully competing and innovating in this digital era, observed Rezaul Hossain, managing director, and chief executive officer of upay – an MFS provider and a subsidiary of United Commercial Bank.
Besides, there is a big gap between university curriculum and industrial needs, he said in an interview with The Business Standard.
"There is a persistent shortfall of right candidates in the job market. There is a significant skill gap. It is, therefore, difficult to find suitable candidates with the required knowledge and understanding on MFS and DFS," said Rezaul Hossain, a leader in the telecom and MFS industries who played an instrumental role in the success of two MFS providers – bKash and Nagad.
Rezaul has more than 26 years of experience in sales, marketing, distribution and products and worked for top local and global companies in leadership positions, including Grameenphone, Citycell, Airtel, and bKash.
He had extensive exposure in successfully transforming Bangladeshi consumers from "wireless" to "cashless" and helped to shape the telecom and financial technology landscape in the country.
He noted that the situation has aggravated further as many tech professionals are pursuing freelancing jobs allured by the quick and instant income possibilities they offer.
"But this is creating a fundamental crisis in the industry. We are struggling to find the right talents who are well versed in financial technology. Even mid-sized companies are struggling and opting for hiring foreign nationals to fill in the gap, particularly in the mid-level positions", Rezaul Hossain said.
The government also is encouraging the country's youths to explore freelancing jobs globally instead of looking for jobs in the local market, he pointed out, adding, "We need to rethink this approach considering the burgeoning growth of employability in the fin-tech industry. Freelancing is good for a short-term career, but in the long run, it will not give bright professionals a proper career path."
He also noted that universities in the country have failed to understand the market demand and asked for aligning university curriculum with industry requirements.
"Universities should review and develop academic curriculums addressing the need of the fast- evolving financial technology sector. The industry is ready to give its input to academic institutions in this regard if necessary."
Rezaul observed that the MFS industry needs massive long-term investment for growth, scalability, and technological innovations.
"We need more investment in this sector. Bangladesh has the potential to accommodate a few more companies as big as bKash, he said, adding that so far investment is not significant in this sector considering the size of the potential market."
He, however, said the success of the MFS industry depends on the performance of four other industries — banking for cash management, telecom for network partnership, internet and mobile handset penetrations for better product experiences.
If these four industries do not work harmoniously, the MFS industry would not scale up to its full potential.
"The MFS industry cannot move alone without the platform support provided by these four other industries. But the saddest part of the story is – none of them work properly. The market penetration of mobile handsets is varying between 25% and 26% only. We don't get uninterrupted internet either. So, huge challenges remain for this industry."
When asked about the MFS industry's contribution to financial inclusion in the country, Rezaul Hossain said financial inclusion through mobile financial services is on the right track as the industry is still dominated by cash in and cash out phenomena.
"But we should adopt more digital payment and other services for customers. Although the frequency of cash out is less than that of cash in, the balance left in customers' MFS account after cash outs is quite small till now.
"When the balance after cash out is healthy in an account, the customer will use the money for other purposes like utilities payment, in-store payment, e-commerce payment, etc. This is important for this business, and it is scaling up amid the pandemic and hopefully, we are moving towards more inclusion."
He said interoperability among MFS operators is a very important element for the development of the industry.
Overall transaction will increase manifold once the interoperability is in operation, he said, adding the government is implementing the IDTP project in this regard. "I hope the project will be complete soon. But, we need to ensure the right balance among the service providers to ensure a level playing field."
He also said that banks and MFS providers are not competing with each other, instead they are complementing each other. The MFS sector is reaching those places where banks cannot go because of non-viability of business.
Explaining this, he said the cost per customer transaction for a first-generation bank is around Tk130, whereas it is Tk350-400 for a fourth-generation bank. On the other hand, the cost of an MFS transaction is around Tk10-12.
"So, for customers, who want to do small-ticket transactions only, traditional banking is not feasible. MFS is the right kind of solution for these types of transactions."
He said the government has a significant role to play in solving the problems faced by the MFS industry through policy support.
He also praised the Bangladesh Bank for its pragmatic role to support the MFS industry in a compliant manner.
"As a regulator, the central bank is very mature and engaged." Speaking on the current business model of MFS providers, he said existing players are operating on a valuation game-based business model. Instead of focusing on profit, they are trying to build and scale up their businesses to raise funds from investors as well as increase the valuations of their ventures.
This valuation-based business model will continue in the next 10 years, he added. "I will try to change the game. Right now I am not in a position to share the business strategy." Asked how he passes his leisure times, Rezaul Hossain said he loves to play football and badminton. He also loves to bike around.
"Fundamentally, I am a sportsman. I play football twice and badminton once a week."
upay, a subsidiary of the United Commercial Bank launched its operation in March 2021. The company has so far 50 lakh customers and 1 lakh agent points across the country.