Chapter One: Introduction

1.1. Introduction of the study

bKash, the largest mobile financial service provider company in Bangladesh has grown
rapidly with their services of cash in, cash out, buy Airtime, payment, remittance and so on.
bKash has made money transfer a lot easier for people of Bangladesh specially for those in
rural areas without any bank accounts. But on the other hand, this platform is being
misused through fraudulent activities and money laundering. Many people become the
victim of fraud every day and bKash is a very common platform to use for fraudsters. For
some reasons, the frauds have been increasing day by day. In this report I have tried to find
out the reasons behind the frauds taking place, in what ways bKash customers and agents
are defrauded and the measures taken by bKash to combat these risks.
1.2. Objectives of the study
1.2.1. Broad objectives
The prime objectives of making this report is to find the policy & management redesign
by bKash to mitigate the fraudulent activities in bKash.
1.2.2. Specific objectives
 To achieve the broad objectives the following specific objectives will be ensued-
 To classify the types of fraud at bKash Ltd.
 To analysis the impact of fraud on the company, agents & customers.
 To manage the policies to deal with the defrauders & mitigate the risk of fraudulent
activities in future.
 To create the awareness among the ordinary people.
1.3. Justification of the study
Preventing the fraud in mobile banking like bKash that Creating awareness among the
ordinary people. Projects themselves are not justified, if we can find out with the
defrauders & mitigate the risk of fraudulent activities that helps us determine how it’s
created impact the customers. Mobile banking professionals must teach human through
courses and seminars how to apply a systematic approach to develop formal justification,
through which they manage to obtain sufficient funds in the shortest time possible.
Previously there has been lots of reports done on Fraud Analysis & Prevention in mobile
banking like bKash but organization could not publish full report their web. But those
researchers do those researches based on their own thought and newspaper articles.
1.4. Scope of the study
As we know that mobile banking services is expanding day by day in Bangladesh. So most
of the people are using mobile commerce application for their daily needs. For this the
defrauders get chances to cheat the ordinary people fir making money.
1.5. Requirement analysis
To accomplish the report on ‘Fraud Analysis & Prevention in M-Commerce: bKash
Perspective’, we need to do some following activities-
 A set of questionnaires for survey.
 An active internet connection in PC and Internet Browser.
 Microsoft office application for completing the report.
1.6. Methodology
The report is prepared based on the information extracted from different sources that
includes both primary and secondary data. To fulfill the objectives of the report, the
methodology has been divided into two major parts:
1.6.1. Primary Sources
 A set of questionnaires for survey.
 Direct interview of the students who was the victim of fraud.
1.6.2. Secondary Sources
 Guidelines for Mobile Financial Services published by Bangladesh Bank.
 Relevant books, research papers, newspapers and journals.
 Internet and various reports related to the topic.
1.7. Limitations
In preparing this report, some problems and limitations have been encountered which are
as follows:
 Difficulty in gathering required information.
 There are various information employees cannot provide due to confidentiality and
other corporate obligations.
 Due to limitation of time and information, many aspects could not be discussed in the
report.
 The report is based more on secondary data rather than primary data.
 Since the students are very busy, they could not pay enough time.
Chapter Two: Literature Review
2.1. Mobile Financial Service (MFS)
Mobile Financial Service (MFS) is a technique to offer financial services which incorporate
banking with wireless remote systems that makes empower clients for performing banking
transactions. It demonstrates the capacity to influence deposits, to pull back, and to send
or get cash from a mobile account and constantly such services are empowering by the
utilization of bank operators which allow mobile account holders to execute at free
specialist areas outside of bank offices(Bangladesh Bank, 2012). Therefore, this new mode
enables the client to access to money related services in whenever, place and setting, there
by changing the principles of rivalry in the between bank. The banks are not any more
simply worried about the quantity of outlets and scope, however more centered on giving
proficient and customized benefit (Hassan, Rahman, Afrin, & Rabbany, 2014). (Amin,
Hamida, Ladaa, & Anis, 2008) analyzed the elements that decide expectation to utilize
mobile banking among BIM Bank's clients. They found that apparent convenience,
usability, perceived believability, and the measure of data on mobile banking and
regularizing weight are huge factors in clarifying the acknowledgment of mobile banking.
2.2. Consumers’ attitude and perception towards Mobile Financial Services
As indicated, there are five seen qualities of advancement that can be utilized to shape a
favorable or unfavorable attitude toward a development, specifically: relative favorable
position, similarity, intricacy, trial-ability and discernibleness. It's a helpful structure to test
the impact of a few factors on mobile bank services selection (Rogers, 2003). It is
discovered that Indian mobile banking users are extraordinarily worry with security issues
like budgetary
chits, account abuse and user friendliness issue -trouble in recollecting the distinctive
codes for various kinds of exchange, application programming establishment and
refreshing, because of absence of standardization(Sharma & Singh, 2009). For customers in
developed nations, m-banking can be a complimentary service offered by financial
institutions notwithstanding ATMs and Internet banking. In this way, factors, for example,
comfort and usability may turn into significance criteria when they consider embracing m-
banking. Be that as it may, consumers in the developing nations, the interest of m-banking
might be less about comfort, however more about openness and reasonableness because
of network coverage, quality association, and expenses (Donnar & Tellez, 2008).
Chapter Three: Company Overview
3.1. Company Profile
bKash Limited (bKash) is a Bank-led Mobile Financial Service Provider in Bangladesh
operating under the license and approval of the Central Bank (Bangladesh Bank) as a
subsidiary of BRAC Bank Limited. bKash provides safe, convenient and easy ways to make
payments and money transfer services via mobile phones to both the unbanked and the
banked people of Bangladesh. At present, bKash is one of the leading Mobile Financial
Services Provider in the world. bKash started as a joint venture between BRAC Bank
Limited, Bangladesh and Money in Motion LLC, USA in 2010. In April 2013, International
Finance Corporation (IFC), a member of the World Bank Group, became an equity partner
and in March 2014, Bill & Melinda Gates Foundation became the investor of the company.
In April 2018, Ant Financial (Ali Pay), an affiliate of globally reputed Alibaba Group, became
an investor in bKash. The ultimate objective of bKash is to ensure access to a broader range
of financial services for the people of Bangladesh. It has a special focus to serve the low
income masses of the country to achieve broader financial inclusion by providing services
that are convenient, affordable and reliable.
More than 70% of the population of Bangladesh lives in rural areas where access to formal
financial services is difficult. Yet these are the people who are in most need of such
services, either for receiving funds from loved ones in distant locations, or to access
financial tools to improve their economic condition. Less than 15% of Bangladeshis are
connected to the formal banking system whereas over 68% have mobile phones. These
phones are not merely devices for talking, but can be used for more useful and
sophisticated processing tasks. bKash was conceived primarily to utilize these mobile
devices and the omnipresent telecom networks to extend financial services in a secure
manner to the under-served remote population of Bangladesh. bKash can be accessed via
all the mobile networks operating in Bangladesh. Currently, bKash is running a network of
more than 180,000 agents throughout urban and rural areas of Bangladesh with over 30
million registered accounts.
In 2017, bKash was ranked as the 23rd company in the annual list of Fortune Magazine's
'Change the World in 2017' among the top 50 companies to make changes based on social
issues.
3.2. Company Mission
By providing financial services that are convenient, affordable and reliable, bKash aims to
widen the net of financial inclusion. bKash wants to provide a solution for Mobile Financial
Services, built on a highly scalable Mobile Money platform, allowing the people of
Bangladesh to safely send and receive money via mobile devices.
3.3. Corporate Divisions
bKash Limited is divided into several divisions and the divisions are divided into different
departments. Moreover, the departments are also sub categorized into some channels.
Some of the departments of bKash limited and their tasks are given below:
3.4. Products and Services
The success of bKash lies on a strengthened and sincere network of agents across the
country. There are 176,000 active agents who offer cash-in and cash-out services to bKash
users all over the country. Agents act as depository of electronic money while the
transactions are carried out through a user’s mobile phone while the distribution
companies collaborate with bKash to carry out the services. The products are as follows:

a. Cash in: this requires sufficient balance in clients/customers account.

b. Cash out: Cash Out from Agent: Money can be withdrawn or cash out anytime from
any bKash Agent if there is sufficient balance available into the account.
c. Cash Out from BRAC Bank ATM: To avail the bKash ATM Cash Out service, it is
required to activate this feature from the customers’ bKash Mobile Menu. This is a
onetime action.
d. Send Money: This refers to transferring money from one bKash Account to another
bKash Account.
e. Payment: Payment is also possible from the bKash Account to any “Merchant” who
accepts “bKash Payment”.
f. Buy Airtime: Recharging of Mobile Airtime is possible from bKash Account.
g. Remittance: Western Union, MasterCard and bKash have has launched a
groundbreaking service for Bangladeshis to receive international remittance in a
convenient way. People can receive money sent from abroad using Western Union
directly into their bKash account at the comfort of their home, 24/7. The money will
be transferred through MasterCard’s secured network, hence the efficacy of this new
service is highly ensured. People can send money from more than 200 countries to
their loved ones living in Bangladesh. Anyone with an active bKash account can avail
this service.
h. Others Remittance: Bangladeshis living abroad can send their remittance in the
easiest and most convenient way to the nominated registered bKash Account Holders
in Bangladesh through enlisted Bank and Exchange Houses.
 i. Interest on Savings: Interest on savings is offered to bKash Customer Accounts. A
minimum balance of BDT 1,000 is required to be eligible to receive interest against
the savings.

Chapter Four: Data Analysis & Findings

4.1. Definition of Fraud
Fraud is normally understood as deceit intended for advantage, a deception intentionally
accomplished in order to secure unfair or unlawful gain. Fraud in the frame work of Mobile
Financial Service (MFS) is the intentional and deliberate action undertaken by fraudsters in
the mobile financial services bionetwork intended at deriving gain and damaging the
reputation of the other stakeholders in the industry.
4.2. MFS Fraud Risk Factors and Vulnerabilities
The risk factors that make MFS platform vulnerable to fraud and money laundering activity,
and the various accompanying fraud typologies, should be analyzed first before any
risk management process is programmed. The key mobile money risk factors indicators
include the following:
a. Customer Driven Fraud: Consumer driven fraud is initiated by fraudsters appear in gas
customers. Consumer fraud targets agents, other consumers, businesses and mobile
financial service providers. Consumer driven fraud is the most common fraud in
Bangladesh and transcends the different stages of the deployment. It is more
prevalent during the transaction activation stage of the business when consumers
begin to trust the mobile financial service better, but are yet to understand many of
the potential risks in the service. The key method of managing consumer driven fraud
is consumer education activities, although there are many processes and system-
based checks that can also help mitigate these challenges.
b. Agent Driven Fraud: Agent driven fraud is perpetuated from within the agent
network. The fraud is initiated and operated by agents or their employees. It includes
agent employees defrauding agents, master agents defrauding their own sub-agents,
agents defrauding customers and, agents defrauding the mobile financial service
provider. Agent driven fraud is most prevalent at the beginning of the deployment,
catalyzed by early loopholes in product pricing. The fraud evolves over time changing
form, victims and impact on the deployment.
4.3. Types of Fraud Risks at bKash
1. Fraud Risk to Agents
a. Risk of information exposure from agent points: Fraudsters may roam around near
agent points in disguise of customers to gather information related to the visitors’
account balance, personal information or the account information of the agents. This
information can be used to defraud customers later in many ways.
b. Transaction by Agents without receiving cash: Agents transact e-money without
receiving cash for which customers can escape later on without paying the money.
c. Giving handset to customers: bKash agents sometimes handover their handset to talk
to the customer from the other end. Fraudsters carry similar looking handset and
exchange with that of the agent’s and withdraw money from the agent account. In this
case, fraudsters follow the style of pressing button by the agents to gain access to the
password.
2. Fraud Risk to bKash Customers
a. Masked SMS: Fraudsters use the exact masking of different popular MFS and
MNO’s like bKash, GP, Banglalink, etc. This helps to convince the customers on
different alluring offers.
b. Fake online business pages: Fraudsters may use fake Facebook pages or any other
social media pages to do business and seek for advance payment from customers
through bKash to defraud them against a chosen product or service.
c. Hacking: Fraudsters sometimes hack Facebook ID of individuals and seek money from
his/her friends and families.
3. Fraud Risk on sharing Confidential Information
Confidential information such as PIN number, account balance, KYC information must not
be shared with anyone no matter how close relatives or friends they are. It is same for
both agents and customers. The tendency of sharing PIN to others paved the scope of
fraud. To send masked SMS, fraudsters often require knowing the account balance of the
customers. If customers do not share account balance then the probability of fraud
reduces significantly
4.4. Impact of Fraud
Fraud occurs in all financial services, not only in Mobile Financial Services. Nevertheless,
since mobile financial services are one of the high potential methods to increase financial
inclusion and extend financial services to the mass market, fraud in this domain has wider
implications. Fraud has far reaching impact on the mobile money ecosystem in a number of
ways:
a. Money Laundering: Fraud will lead to money laundering and associated criminal
activities. This may include terrorism financing due to negligent KYC in customer
registration and cover of funds brought into the financial system by criminals using false
identities. It is important for bKash to be aware of the risks around this.
b. Credibility of the Mobile Financial Service: The credibility of bKash will be severely
reduced if fraud is out of control and persistent. Existing and new customers will be
discouraged from using the services for fear of losing funds through fraudulent
activities.
c. Impact on Brand: An organization’s brand represents the values that define how it is
perceived by the environment. If the organization’s products are negatively impacted by
fraud, users will associate the brand with fraud and this may also affect any other
services or products offered by the organization.
d. Growth in Number of Subscribers: Customers want to transact with a financial
services platform that is secure, on which they can trust to deliver services on time and
efficiently. In Bangladesh, the fear of fraud and loss of money means that mobile money
adoption takes time. In the same way, the acceptance of debit and credit cards in
developing markets has been negatively affected by fear of fraud. Therefore, if fraud in
bKash is not controlled, it will affect transaction and customer growth.
4.5. Fraud Prevention in Mobile Banking
With its ease of use and flexibility, mobile banking is creating a revolution in the provision
of new ways for consumers to access their finances. Consumers can access and control
their accounts through virtually any device with an internet connection, from which they
can deposit cheques, pay bills, transfer funds between accounts and even send money to
people or businesses anywhere in the world.
Unfortunately, this revolution in accessibility and convenience is providing new avenues for
fraudsters looking to exploit vulnerabilities to syphon money from the accounts of
businesses and consumers. it is important to implement the fundamental tactical strategies
that can offer the best protection.
Here are 7 fraud detection/prevention measures used in mobile banking-
 Multi-factor authentication
 Consumer email and text alerts
  Online activity logging and behavioral analysis
 Multi-channel fraud and suspicious activity monitoring
 Carry out fraud awareness campaign
 Using secure access through HTTPS
 Regular monitoring and cleaning of malware
4.6. Prevention of fraud in bKash
The way you do not share your locker’s key, similarly never share your bKash Account PIN
or Verification Code with anyone else. Otherwise your money in bKash will be at risk.
Please remember, bKash will never ask for your Account PIN or Verification Code.

Besides, please verify the intention and identity of the caller instead of falling for the traps
of any frauds out of greed, fear, trust or superstition. You can always check your bKash
account balance and to avoid any confusion call the bKash helpline at 16247. You can also
report any fraudulent activity regarding bKash in the following ways:
 Contact your nearest bKash Center or bKash Plus
 Inbox at bKash’s official Facebook page www.facebook.com/bkashlimite
 Email at [email protected] or
 Visit https://webchat.bkash.com/
 To know more details, visit https://www.bkash.com/
4.7. Demographic analysis
In this research, we are going to discuss about the demographic part of our analysis and
findings. There included number of male and female who are connected to mobile
banking , finding several Occupation of people, finding same ages of people.
Table I: Demographic Analysis

Details Size
Gender
Male 18
Female 7
Age Group
18 to 25 25
26 to 30 0
Above 30 0
Occupation
Student 24
Service Holder 1
Businessman 0
Housewife 0

In this research, we see that there are most of them male and few numbers are female.
Other side in this organization most of the people are students & 1 person is service holder.
In this survey all of the people are 18 to 25 age.
4.8. Descriptive statistics analysis
In this research we are going to discuss about the descriptive statistics of our collection
data about concepts of “Fraud Analysis & Prevention in Mobile Financial Service: bKash
Perspective”.
On our 25 survey we find out that most of the person use bKash (22 persons) & only few
person use Rocket (3 persons) as mobile banking.

Which mobile Banking service is most helpful according to you?

Bkash Rocket Nagad Ukash

12%

88%

We also find out that 68% person daily uses mobile banking, 28% uses weekly & only 4%
uses monthly.
 How often do you make transaction?
Daily Weekly Monthly

4%

28%

68%

We also find out that about 72% people had a victim of bKash fraud.

4.9. Findings
From the assigned tasks, there are several findings and observations from the assigned
tasks during my internship program and they are as follows:

 More than 18 complaints about people being defraud on this survey. This clearly
shows how badly the MFS platform is being misused in Bangladesh.
 Most victims of fraudulent activities are people who belong to rural areas,
which means that they still lack knowledge and the fraud awareness campaign
scarred out by bKash are not properly reaching towards them.
 Fake call is the most common type of fraud happening in Bangladesh. Other types
include masking call, masking fake SMS.
  Almost all the accounts are either frozen or suspended through which a fraud has
been incurred or attempted for further investigation by bKash. The action is same for
both agent and customer bKash account.

Chapter Five: Conclusion & Recommendations

5.1. Conclusion
It is obvious that mobile MFS fraud is increasingly becoming significant. Over the past few
years, many serious cases of fraud have been reported that has raised concerns about
related risk within the industry. As payments through mobile begin to scale in many
markets and new products are introduced, there is growing need to address fraud
conclusively. The donor agencies and consultants have a key role to play in this aspect of
the industry. bKash should come up with more preventive measures to check fraudulent
activities, and through handling of fraud should try to recover and return victim’s money
and also take strict measures against fraudsters. This is a difficult task for the company
alone to tackle; proactive and reactive measures are needed from law enforcing agency,
Bangladesh Bank, and most importantly from the general public. bKash’s initial growth to
large scale has been among the fastest globally. At the same time, it is still in early stage of
development. There is a long way to go and much still to do to build the business. bKash
needs to stabilize its technology platform to support a much higher volume of transactions.
5.2. Recommendations
a. Take action in both ways: In addition to strict actions against fraudsters,
payback or compensation system should also be initiated for defrauded victims.
Customers become disheartened with the service after being deceived by fraudsters.
Therefore, bKash should compensate the victims immediately after finding out that
the fraud has actually occurred.
b. Improving Poor Network Conditions: Customer service centers or touch points
are not found everywhere. Hot line service process is lengthy and costly. Buy
Airtime service through which mobiles are recharged is sometimes unavailable due to
 random network and connection problems with telecommunication operators. If
technological advancement program is implemented fast, it would benefit both bKash
and telecommunication operators as it would enable them to meet the committed
services more efficiently.
c. Create Awareness: Financial education is required for both agents and
consumers to effectively tackle the menace of fraud in mobile financial services.
Comprehensive training of agents creates the first line of defense against fraud. Along
with training and awareness campaigns, feedbacks from the customers and agent
should be equally valued. The curriculum must include certification and evaluation.
Well trained agents will be aware of risks, will ensure that customers are made aware
of the risks and will know off measures to deal with risks and minimize damage.
d. Monitoring and Supervision of Agents: Regular monitoring of agents is important to
check and ensure proper implementation. Regular checks need to be carried out to
verify records and practices, and to hand out performance rewards and (where
appropriate) punishment.

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