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| Farah Arifin |
Introduction
Mobile
Financial Services (MFS) refers to financial transactions conducted through
mobile phone numbers, including payments, transfers, and banking services. In fact, it is one of the digital
media that has enhanced our access to goods and services, diversified payment
methods, and expanded commercial opportunities. It has a revolutionary effect
on changing the landscape of financial inclusion and also monetary transactions
in Bangladesh. However, this digital shift has also been accompanied by a
significant rise in MFS-related frauds, such as SMS
spoofing, fake calls/emails, breaches in consumer security, PIN theft, etc. These developments raise critical
legal and regulatory concerns that must be addressed to safeguard consumers and
the integrity of the financial system.
The Rise of MFS
The MFS sector is expanding rapidly
in Bangladesh. In fact, Bangladesh is
recognized as one of the fastest-growing markets for mobile financial services
globally.
According to reports, Bangladesh secured the fourth position as the fastest-growing
market for it. In 2023, the
MFS account was nearly 215 million. By 2024 the accounts reached 233 million,
according to a Bangladesh Bank report.
The first and foremost reason for growing is that it ensures fast and efficient
money transfer coupled with low transaction charges. As a result, the service
providers such as Nagad, bKash,
and 11 others are
growing so fast. However, this service is not entirely devoid of risks.
Numerous instances of fraudulent practices within this sector have been
documented and continue to pose significant legal and regulatory concerns.
MFS Fraud Patterns in
Bangladesh
In Bangladesh, common fraud
patterns in the Mobile Financial Services (MFS) sector include unauthorized
transactions, data or e-money theft through SIM swaps, SMS spoofing, fake calls
and emails impersonating service providers, and breaches of consumer security
such as PIN theft. However, the majority
of frauds occur through PIN scams.
The wrongdoers often target individuals with low levels of digital
literacy. Research
by Ashikur Rahman indicates that even educated
users are
increasingly falling victim, highlighting a gap between traditional education
and technological awareness. MFS agents and merchants with limited digital
financial knowledge are also vulnerable to deceptive schemes.
Underlying Causes of MFS Fraud
MFS makes our economic life easy,
whereas MFS-related frauds make our lives troublesome. Research says that 10% of users are facing some form of
fraud while they are using MFS. According to another study, 6.3% of the general
population, 17% of agents, and 1.6% of merchant users of mobile financial
services experience fraud.
In terms of financial impact, 3.6% of the general public, 8.7% of
agents, and 1.4% of merchants suffer monetary losses as a result of these
fraudulent activities.
From a broader social perspective, several
factors help explain this alarming situation. One key factor is the lack of
controlling factors, both internal (such as individual morality) and external
(such as robust laws and enforcement). It means that many wrongdoers feel they
can act without fear of meaningful consequences. Moreover, offenders choose to
commit fraud because the perceived benefits outweigh the risks, a situation
made worse by Bangladesh’s weak punishment system and inadequate regulatory
framework. Another factor is digital and social media. Online communities
increasingly facilitate the spread of these techniques. In addition, economic
inequality and lack of opportunities in our country push some individuals to
commit fraud as an alternative way to achieve financial goals that they cannot
reach lawfully. Collectively, these factors show that Bangladesh’s social,
economic, and legal conditions are contributing to the growth of MFS fraud.
Without addressing these root causes, the country risks facing severe economic
and legal challenges in the future.
Policy Recommendations for
Strengthening MFS Fraud Prevention
According to the central bank's
latest data, although the total transaction volume through Mobile Financial
Services declined from BDT
171,664.12 crore
in January 2025 to BDT
164,726.30 crore
in February 2025, the average daily number of transactions increased by 2.97%,
rising from 23,286,015.29
to 23,976,461.07 transactions.
Notably, the average daily transaction amount also showed an upward trend, growing by
6.24% from BDT 5,537.55 crore in January to BDT 5,883.08 crore in February 2025. Approximately 233 million people use mobile financial services. As
the volume of transactions is increasing day by day, the incidence of fraud
within Mobile Financial Services (MFS) is likewise on the rise. To control the
rising trend of mobile financial service (MFS) frauds in Bangladesh, effective
measures are urgently needed.
Firstly, comprehensive legislation must be
enacted and rigorously enforced. While Bangladesh has existing regulations such
as the Bangladesh Mobile Financial Services Regulations 2022, these
legal frameworks must be made more effective through rigorous implementation.
In addition, establishing clear legal consequences will serve both as a
deterrent and as an example to others contemplating similar offenses.
Secondly, social and economic inequalities must be addressed to reduce
the motivation for committing fraud. Public awareness campaigns and digital
literacy programs can serve as effective preventive tools.
Thirdly, regulatory frameworks should be strengthened to ensure
practical applicability, while law enforcement agencies must adopt advanced
technologies such as artificial intelligence, multi-factor authentication, and
biometrics for timely detection and prevention of fraud.
Ultimately, collective action by
the government, private institutions, and civil society is essential to
safeguard Bangladesh’s expanding digital financial ecosystem.
Conclusion
In developing countries like
Bangladesh, MFS is a revolutionary digital-banking advancement to bolster the
emerging economy. So, the increasing popularity of MFS is a positive indicator
of financial inclusion and growth in our country. However, MFS fraud is such an
obstacle to fully realizing these benefits. So, this is high time to properly
address the fraud threats and take proper security measures. By increasing
digital literacy, enforcing punishment, enacting policies, improving
technology, making effective laws, and equalizing social and economic
opportunities for every individual,
we may create a safer environment for mobile financial services. Individual
users also have a duty to remain vigilant when using mobile financial services.
Ultimately, effective collaboration between law enforcement, law enforcement
agencies, technology providers, and individual users is essential to create a
trustworthy environment for mobile financial services.