24.5 Crore MFS Accounts, But No Transaction Insurance Protection in Bangladesh

Raj Kiron Das: Mobile Financial Services (MFS), commonly known as mobile banking, have become an integral part of Bangladesh’s digital economy. The number of registered MFS accounts in the country has now reached approximately 24.5 crore, with nearly 39.5 percent of those accounts remaining active. Thirteen licensed MFS operators are currently operating in the market. Despite the sector’s remarkable growth and its role in handling billions of taka in daily transactions, Bangladesh still lacks a dedicated transaction insurance or mobile wallet protection insurance scheme for consumers.

Industry stakeholders say that when funds are stolen from a bKash, Nagad, Rocket, or other MFS account through fraud, hacking, or unauthorised access, compensation depends largely on the nature of the incident, investigation findings, and the policies of the respective service provider. While Bangladesh Bank's MFS regulations establish operational and security frameworks for providers, they do not require dedicated mobile wallet transaction insurance for customers.

The scale of transactions highlights the significance of this protection gap. Nagad, one of the country’s largest MFS providers, processed transactions worth approximately Tk 111,355 crore during the first quarter of 2026. Although digital transactions worth thousands of crores of taka take place every day across the sector, there is currently no specialised insurance mechanism to protect consumers against financial losses arising from cyber fraud or unauthorised transactions.

According to industry estimates and market analysts, bKash remains the dominant player in the MFS market, accounting for roughly 70 to 75 percent of total transactions. Nagad follows with an estimated market share of 18 to 20 percent, while Rocket holds approximately 8 to 10 percent. The remaining share is divided among other operators.

Although discussions on digital transformation in Bangladesh’s insurance sector have gained momentum in recent years, insurance products specifically designed to protect individual mobile wallet users from cyber fraud remain largely unavailable. MFS operators have invested significantly in technological safeguards, fraud detection systems, and anti-money laundering measures, but insurance-based financial protection for consumers has yet to emerge as a mainstream offering.

Several insurers and insurtech initiatives in Bangladesh are exploring digital insurance and cyber risk solutions. Green Delta Insurance has expressed interest in developing cyber insurance products suited to local market needs and has already been involved in cyber risk management initiatives. Guardian Life continues to expand its digital insurance services, while MetLife Bangladesh has introduced various online claims and customer service facilities. However, these initiatives primarily focus on corporate cyber risks, life insurance, health insurance, or traditional insurance products. A dedicated retail insurance solution covering unauthorised MFS transactions or mobile wallet account takeovers is still absent.

To strengthen digital financial security, Bangladesh Bank introduced several new measures in 2026. One key requirement is that the name on a debit or credit card used to add funds to an MFS wallet must match the name of the MFS account holder. The measure aims to reduce the risk of fraudulent transfers using stolen card information.

In addition, a 24-hour cooling period has been introduced whenever a customer logs into an MFS account from a new device or changes their PIN. During this period, restrictions apply to large fund transfers and cash-out transactions, reducing the risk of unauthorised access and fraud.

The central bank has also limited customers to one personal account per operator against a single National ID and has made device binding mandatory, linking MFS applications to specific mobile devices. According to industry observers, these measures will strengthen account security and reduce opportunities for fraud.

Despite these improvements, no joint transaction insurance framework has yet been introduced by Bangladesh Bank and the Insurance Development and Regulatory Authority (IDRA) to compensate consumers who lose money through hacking, identity theft, or cyber fraud.

Meanwhile, concerns over the misuse of MFS platforms continue to grow. Risks linked to online fraud, illegal gambling, digital money laundering, and hundi activities have drawn increasing attention from regulators and law enforcement agencies. Research conducted by Transparency International Bangladesh (TIB) has highlighted the use of MFS channels in online betting and gambling transactions.

Law enforcement agencies have also intensified operations against digital crime networks. During the first five months of 2026 and early June, several enforcement actions were carried out against groups allegedly involved in online gambling and digital hundi operations.

Identity theft has emerged as another significant concern. In 2026, the Criminal Investigation Department (CID) arrested several individuals accused of collecting and selling citizens’ National ID information and MFS account-related data. Such incidents have underscored growing risks associated with account takeovers, identity fraud, and financial crimes.

Based on information gathered during these investigations, the CID submitted a list of 116 illegal gambling websites and applications to the Bangladesh Telecommunication Regulatory Commission (BTRC) for blocking.

While Bangladesh continues to strengthen its digital payment ecosystem, many countries have already introduced insurance-backed protection for digital wallet users.

In Singapore, users of POSB/DBS PayLah! can purchase mobile wallet protection products offered through insurance partnerships. These protection plans cover risks such as social engineering scams, account takeover incidents, and unauthorised transactions. Coverage can be purchased for as little as SGD 6.99 per year.

Singapore’s Singtel Dash has also integrated insurance and savings products into its digital wallet ecosystem, demonstrating how financial protection services can be combined with mobile payment platforms.

India has adopted a customer protection framework through the Reserve Bank of India (RBI) that limits consumer liability in cases of unauthorised electronic banking transactions. Customers who report incidents within specified timelines and are not found negligent may qualify for zero-liability protection under certain circumstances.

In the United Kingdom and several other developed markets, insurers offer specialised identity theft protection and cyber insurance products that can help cover losses arising from digital fraud, cybercrime, and unauthorised online activities. Similar protection remains largely unavailable for Bangladesh’s MFS users.

Industry experts argue that transaction insurance could become an important complement to technological safeguards as digital payment adoption continues to accelerate. They note that while stronger security measures can reduce risks, insurance-backed protection can provide an additional layer of financial security for consumers when fraud or cyber incidents occur.

Experts believe that relying solely on technological safeguards may not be sufficient for a sector serving more than 24.5 crore registered accounts. As digital transactions continue to expand and cyber risks become more sophisticated, policymakers may need to consider introducing mobile wallet transaction insurance, cyber fraud coverage, and identity theft protection products to strengthen consumer confidence and enhance financial resilience in Bangladesh’s rapidly growing digital finance sector.