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Banks are the backbone of any country’s financial system. Because economic and financial development is so closely linked, the banking system must be strong, resilient, and sound to facilitate the effective intermediation of financial resources. The bank not only aids industrialization by handling the majority of monetary transactions, but it also ensures that people’s money is safe. So, a stable macroeconomic environment, competent bank management techniques, and prudent financial laws are necessary. To fulfill the demands of an ever-changing society, the financial system must be updated by producing new goods and services. The system is also influenced by the advancement of information technology, which has a significant impact on the creation of more flexible payment methods and user-friendly financial services (Dixit & Datta, 2010). Mobile banking is one of the most recent financial services, bringing some of the most significant banking processes into people’s pockets. The demand for this new banking service is increasing day by day along with the increased use of smartphones across the world. This new reality opens up new opportunities for banks, microfinance institutions, software houses, and service providers to offer this innovative service along with new products and applications aimed at expanding their client base (including unbanked populations), improving customer retention, increasing market share, and creating new job opportunities (Shaikh, 2013). However, reports show the use of mobile phones to do banking is not satisfactory yet, despite these opportunities (Accenture, 2013; Dineshwar & Steven, 2013). By 2017, it was expected that more than one billion individuals, or 15% of the worldwide mobile subscription base, will be using mobile banking. However, according to the most recent Findex data, about one-third of adults (1.7 billion) were remained unbanked in 2017. About half of the unbanked persons were women from low-income households in rural regions or who were unemployed (World Bank, 2022). These patterns suggest that mobile banking has a lot of potential throughout the world.
However, like many other developing and least developed countries, 80 percent of the population in Bangladesh still does not have access to formal financial services. Only 45 percent of adults have a formal financial account (Alam & Sarowar, 2020), forcing most people to rely on alternative financial institutions that charge expensive fees, trapping the unbanked in a cycle of poverty (Parvez et al., 2015). On the other hand, 97 percent of people use a mobile phone in the country, which motivates policymakers to utilize this opportunity by launching mobile banking services (BTRC, 2020). The central bank approved 28 institutions to provide mobile banking as part of the government’s financial inclusion agenda; 16 have done so far (Bangladesh Bank, 2020). Mobile banking has quickly gained popularity among Bangladeshis due to its simple transaction options. People in both urban and rural areas are using this modern technology to transfer money, get wages, pay bills, and check their balance, transaction history, and other bank services via their mobile phones at any time and from anywhere without having to visit a bank branch. Experts and policymakers think that the increased use of mobile banking will drive the country’s economic development as well as a reduction in general inequality (Rahman, 2014). Branchless banking, according to several studies, has a great potential to expand the distribution of financial services to poor people who are not served by traditional banks because it lowers the cost of delivery, which includes both the cost of building and maintaining a delivery channel for banks and the cost of accessing services for customers (Ivatuary & Mas, 2008).