EXPERT OPINION ON EXCLUSIVE FEATURE

Sumaiya Siddique, MBR Team

Mr. Mir Tariquzzaman is the General Manager and Chief Technology Officer (CTO) of IDLC Finance Limited. He joined IDLC in April 1995 as Management Trainee. Mr. Tariquzzamaman is responsible for establishing and managing a dynamic IT Infrastructure of IDLC Group. In this edition, MBR team catches up with Mr. Tariquzzaman who shares his valued opinion about the 4th Industrial Revolution and its impact.

MBR: The technological advancements have disrupted traditional business models across the world over the last decade which ultimately will lead to the 4th Industrial Revolution. How do you think this movement towards 4IR has impacted the overall financial sector in Bangladesh?

Mir Tariquzzaman: The globe is at the doorstep of 4IR. Technologies are rapidly changing in the biological, the physical, and the digital domain. These innovations are marked as 4IR technologies which promise to achieve ambitious goals and objectives. Some economies have already started the journey
The financial sector in Bangladesh is immensely impacted by 4IR technologies:
• Mobile Financial Services (MFS) is one of the sectors that has grown miraculously and has impacted the overall financial sector in Bangladesh. Domestic money transfer has been channelized and deployed in remote areas of the country through MFS.
• Online Platform-based Businesses are doing well and attracted global players like Uber, Daraz (Alibaba), and Bproperty. Amazon and Walmart are also thinking of getting into Bangladesh market.
• Covid – 19 has created an opportunity to go digital earlier than anticipated. Social distancing mandates have forced individuals and businesses to contemplate alternative ways of financial transactions.
• Central Bank’s e-KYC policy has provided the initial boost required for end to end digital financial services. All the banks and NBFIs are in the process of changing the way of banking with eKYC and digital banking apps.

MBR: Tech-based modernization of industries is the need of the hour. Please share with us the ways in which the financial institutions are changing their traditional approaches of doing business in Bangladesh.

Mir Tariquzzaman:
• Mobile devices have become the new norm for banking/financial activities. Technology-powered digital savings and micro-loans in Bangladesh have opened up a new era of financial empowerment for the unbanked population, i.e., financial inclusion.
• Tech-based modernization helps to reduce the cost and improve the efficiency of product and service delivery across the financial sector.
• Empower customers by delivering a better value proposition and enhancing the customer experience through improved data analytics (giving a better understanding of customer behavior and needs).
The following are some of the most important steps Bangladesh has taken to digitize its financial services in the last decade:
• introduction of an automated Credit Information Bureau (CIB) to enable effective credit risk management and ease of doing business in Bangladesh
Automated cheque processing, National Payment Switch, BEFTN, and RTGS were introduced to enhance the speed as well as reliability of banking services.
• Linking the KYC process with the national database maintained by the National Election Commission (through utilizing the NIDs)
• The digitization of financial services (online banking, mobile financial services, and agent banking) has revolutionized access to finance in Bangladesh.
• Above all, backed by the innovative initiatives of Bangladesh Bank, today the banks are using core banking software and have dramatically automated most of their internal and external operations.

MBR: Technologies such as robotics, machine learning, artificial intelligence, etc. are the integral components of 4th Industrial revolution. Please share with us your views on how IDLC is adopting the technological advancements brought about by this revolution.

Mir Tariquzzaman: Behavioral Change: Become a Fintech like Company in attitude
Continuous Development: Move into continuous development mode
Partnership with Business Unit: In process automation, in customer acquisition, and providing data science, AI, and Business Intelligence. We already implemented CIB and Bank Statement Analyzer.

Digital Product: Convenient and easy to get
• After deposit (Online deposit and digital savings with bKash) and investment gradually, we can move into loan market by introducing:
 Rule based Pre-Sanction
 Fastest Approval of Pre-Sanctioned Loan
 Tie-up with Mobile Transaction Agents for Verification

Digital Financial Services: virtual branch for our customers
• Customer Acquisition: Mobile Apps and Website
• Collection & Disbursement: Through banks with mobile banking platforms

MBR: This revolution poses challenge for low and unskilled workers. So, how can Bangladesh overcome such threat as most workers are still unskilled and 60% of the population work in agriculture sector?

Mir Tariquzzaman: More recent research suggests that the adoption of technology to transform many traditional industries immediately into smart industries is not economically feasible. Thus, displacement due to automation may not occur immediately (Asian Development Bank, 2018). On the other hand, about 60 percent of the population works in agriculture, and about 30 percent of the GDP comes from agriculture. We cannot expect that the adoption of technology in these sectors will happen anytime soon. Thus, the idea that all industries will become automated and that lowskilled workers will lose their jobs is not always correct. However, non-routine jobs need to be accelerated to sustain economic growth. The non-routine and cognitive categories require higher-order cognitive and soft skills
Universities need to produce graduates who are equipped with the skills of complex problemsolving, critical thinking, creativity, human resources management, networking, emotional intelligence, judgment and decision-making, and service orientation.
The role of the government in directing 4IR and providing a suitable environment for that is pivotal. The education sector will also play a vital role in training the workforce needed for the new jobs. Many of the existing jobs will be phased out, the laid-off workers will need to be retrained, and the government can play a big role in providing the workers with the incentives to relocate.

MBR: As the fourth industrial revolution is more related with technology and its implementation. When we talk about technology and other automation associated with it, cyber-security comes to mind. What are your advices for this sector to mitigate such risk?

Mir Tariquzzaman: Cyber threats are getting more and more sophisticated, with terrifying tales of ransomware, phishing, information leaks, and data breaches in the news every day. And, with the fourth industrial revolution bringing an increased use of technology into the banking and finance industries, the risk of companies suffering from cyber-attack is growing.
Digital money (or cryptocurrency) is an inevitable consequence of the fourth industrial revolution, and one of the biggest trends to come out of it is Block chain.
“Blockchain is a secure, decentralized, and transparent way of recording and sharing data, with no need to rely on third-party intermediaries.”
Just like the internet changed communications forever, the blockchain will change banking forever. Blockchain technologies record all transactions transparently and safely, allowing people to send money (almost) immediately from anywhere in the world at a low cost. And because it doesn’t use any third parties, and each transaction is cryptographically protected, it drastically minimizes the risk of hacking.
Banks in Bangladesh have already started adopting blockchain technology, which,on a broader scale, will significantly help the country in trade-related transactions making it paperless, real-time, low-cost, faster, and free of errors.

MBR: Experts claim that Bangladesh can attain status of a Developed country by 2041, if advantages of 4th Industrial Revolution can be availed. What will be your guidelines for restructuring the existing practices in order to reap the benefits of this revolution?

eMir Tariquzzaman:
• Invest in human capital and manpower development to create a workforce that is ready to succeed in a digital environment.
• Seek out new opportunities and the low-hanging fruits. Identify areas that are ready for change and lead to increased productivity.
• Special care needs to be taken to ensure that digital infrastructure and access-to-internet become affordable and sustainable. Moreover, a policy environment focusing on customer benefit must be the top priority, which necessitates ensuring interoperability, favorable tax policy, etc. Gaining and maintaining customer confidence is also pivotal.
• Banks and financial institutions must be as flexible and agile as possible because the financial industry is constantly changing. They need to be able to address problems and change direction quickly.
• Digital Financial Service (DFS) needs to ensure that customers get acclimated to the “new normal” and that fraudsters do not spoil the show that has been developed with painstaking efforts.