Customer Satisfaction of Nagad Mobile Banking:

The Context of Bangladesh

Md. Rafiqul Islam, ID- 1913285157, SM Moinul Hasan, ID- 1913285152, Midul Chakma, ID- 1913285154,
Md. Shakil Ahmed, ID- 1913285155, Sujit Meher Biswas, ID- 1913285159, Farhan Mehbub, ID- 1913285160
Asaduzzaman Prithibi, ID- 1913285161, Mezbahul Haque, ID- 1813285150, Parthib Chakma, ID- 1813285161

Abstract
Mobile banking has become a widespread global phenomenon, with advancements in
technology playing a significant role in expanding banks' distribution channels. These
electronic delivery channels are collectively known as mobile banking. In the developing
nation of Bangladesh, mobile banking services, such as Nagad, have become an integral part
of the economy. This study aimed to investigate whether various aspects of Nagad mobile
banking service have an impact on customer satisfaction. Data was collected from 50
respondents through questionnaires using a nonprobability convenience sampling approach.
The primary findings of this research indicate that customer satisfaction is influenced by four
key factors: the quality of the transaction experience, ease of use, service security, and
customer support. This study provides valuable insights into understanding changes in
customer behavior and underscores the wide-ranging benefits that Nagad mobile banking
applications offer to customers.
Introduction
Mobile banking refers to an electronic banking innovation business using mobile network and
mobile communication technology to realize connection of mobile phones and other mobile
devices banking system as well as getting a variety of financial services through the mobile
interface or SMS. This new mode allows the user to access to financial services in any time,
place and context, there by changing the rules of competition in the inter-bank. The banks are
no longer just concerned about the number of outlets and coverage, but more focused on
providing professional and personalized service. The propagation of, and speedy advances in,
technology-based systems, especially those connected to the internet, are foremost to
elemental changes in how companies interact with customers (Ibrahim, Joseph, & Ibeh, 2006;
Bauer, Hammerschmidt, & Falk , 2005; Parasuraman & Zinkhan , 2002). Mobile phone
usage has broadened in a very wide-ranging comportment both in developing and developed
countries. With mobile communications already as a prime case for advance traditional
infrastructure, mobile banking (M-Banking) has huge prospective for extending the
prerequisite of financial services to unbanked people through a technology that is both
recognizable and pervasive. One of the first commercial applications of the mobile commerce
was mobile banking (m-banking) (Barnes & Corbitt, 2003; Venkatesh & Davis, 1996). The
rapid growth of mobile applications has given rise to a new term: m-commerce. M- commerce
is defined as the application of wireless communications networks and devices to the
execution of transactions with monetary value–either direct or indirect (Clarke, 2001). As the
number of mobile phone users is growing, purchasing products and services using mobile
phones and other mobile devices are also increasing; also the use of Mobile Banking is still
in initial stages and more research in this field is desirable (Barati & Mohammadi, 2009).
Internet banking and mobile banking (m-banking) has become the self-service delivery
channel that allows banks to endow with information and recommend services to their
customers with more expediency via the web services technology.
Recently, Mobile financial services have gained very much popularity and Nagad is a secure,
convenient and affordable mobile services provider in Bangladesh. Nagad has utilized mobile
phones to provide a broader range of financial services in a secure and convenient way for
the people of Bangladesh. It has focused on serving the low income group of the country by
providing convenient, affordable, and reliable financial services that have no access to formal
financial services.

Background of the Study

Nagad is a Bangladeshi Digital Financial Service (DFS), operating under the authority of the
Bangladesh Post Office, an attached department of the Ministry of Post and
Telecommunication (Bangladesh). It is the new version of the previously introduced Postal
Cash Card and Electronic Money. Nagad embarked on its journey with the aim of offering a
wider array of financial services, including money transfers, payments, mobile top-ups, and
international remittances, among others. Its primary focus has been on serving the lower-
income segment of the Bangladeshi population, with the overarching goal of promoting broader
financial inclusion by providing accessible, cost-effective, and secure financial services.

A significant portion of Bangladesh's population requires formal financial services, whether

it's for receiving funds from distant loved ones or accessing formal financial tools to enhance
their current economic circumstances. These mobile devices can also be harnessed for more
advanced financial operations. Nagad has leveraged these mobile devices to extend financial
services more securely and efficiently to the remote regions of Bangladesh.

Importance of the Study

The Nagad mobile banking service is of great significance, not only for the bank itself but
also for society as a whole. Mobile banking, often known as M-banking, includes actions like
checking account balances, conducting transactions, making payments, and using banking
applications on mobile devices or Personal Digital Assistants (PDAs). Initially, mobile
banking was predominantly carried out on mobile phones. However, with the introduction of
smartphones, various mobile banking apps emerged, establishing their own presence in the
market. Mobile banking plays a crucial role in improving the operations of banks and financial
institutions. It allows for transactions, stock trading, and other financial activities through
mobile SMS or mobile websites, providing access to personalized information, account
management, and facilitating credit transfers.

Objectives of the Study

1. To ascertain the factors that affect customer satisfaction of Nagad mobile banking.
2. To find out satisfaction level of customers towards the mobile banking services
of Nagad.
3. To make some recommendations and conclusion to further the development of
Nagad mobile banking services in Bangladesh.

Research Questions
With the intention to achieve the objectives of the study defined above, ten questions will be
recognized in favor of the research.

Transaction Experience
Q1: You can easily make payments (utility bills, service fees) through Nagad.
Q2: The money transfer process is simple and quick.
Ease of Use
Q3: You can easily understand the Nagad service menu.
Q4: The language used in their user interfere is easily understandable.
Service Security
Q5: Do you believe that the Nagad agents will not misuse your given personal information or
transaction information?
Q6: You feel secure when performing financial transactions by using your Nagad mobile
banking service.
Q7: Nagad has an adequate security system to reduce fraud.
Customer Support
Q8: You can easily communicate with the call center to fix your problem.
Q9: There are available Nagad customer service centers in your area.
Q10: The personnel in the customer care behave with you well.

Research Methodology

Sampling Size
Determining an adequate sample size is a crucial aspect of planning a survey, as it directly
impacts the reliability of the resulting estimates. In this particular study, resource and time
limitations have led to the decision to employ a sample size of 50. When selecting this sample,
the primary focus is on including customers who have a direct association with the Nagad
mobile banking service.

Sampling Plan
This pertains to the process of managing the sample. During the phase of devising the sample
plan, we allocated several days for this task. We gathered data specifically from Rajshahi
City. The sampling plan was executed effectively, resulting in the achievement of the
intended goals.

Sampling Method
In the case of choosing the sampling method here the first priority is the nonprobability
(convenience) sampling method. We have tried to focus on those samples which are easy to
get access.

Source of Data
During the course of this research, information was gathered from both primary and
secondary sources. However, the primary focus of the study relies predominantly on primary
data.

Primary Data
The research commenced by engaging in comprehensive conversations with various
customers and clients, delving into the entirety of their experiences in obtaining necessary
actions when required. This involved conducting personal interviews and distributing self-
administered questionnaires. Subsequently, the acquired data was systematically processed,
organized into tables, and subjected to logical analysis.

Secondary Data
The secondary sources include different web sites, journals, and annual report. The collected
data have been analyzed through the following statistical instruments:

Types of Tests and Statistical Software Applied

We conducted an analysis of the proposed model's association with the characteristics of the
scale using Microsoft Excel. We employed statistical techniques in line with widely accepted
research assumptions when applicable. The 6 point Likert scale was employed to gauge the
perceptions of the survey participants where, 1=Strongly Agree, 2=Agree, 3=Slightly Agree,
4=Slightly Disagree, 5=Disagree, 6=Strongly Disagree.

Data Analysis & Findings

Frequency Table
Table: 1 Gender of the Respondent

Gender Number Percentage (%)

Male 39 78%
Female 11 22%
Total 50 100%
Source: Field Survey

Greater interest in Nagad mobile banking was observed among male respondents compared
to their female counterparts, leading to a higher representation of males in Table 1. However,
it is noteworthy that the number of female respondents was on the rise, indicating a positive
trend.
Table: 2 Age of the Respondent

Age Number Percentage (%)

16-26 years 35 70%
27-37 years 13 26%
38-48 years 02 4%
Above 48 0 0%
Total 50 100
Source: Field Survey

From the above table, it would be said that young people adopt the use of Nagad mobile
banking more rapidly. Therefore, the age of the respondent (16-26 years) is 70%.

Table: 3 Education of the Respondents

Education Number Percentage (%)

SSC 5 10%
HSC 7 14%
Graduation 32 64%
Post-Graduation 6 12%
Total 50 100%
Source: Field Survey

Table 3 shows that the respondents who have graduated avail Nagad mobile services mostly
that is 64%. On the other hand, a significant amount is growing in the SSC and HSC level.
 Table: 4 Method of Getting Services

Method Number Percentage

Mobile App 42 84%
USSD 8 16%
Total 50 100%
Source: Field Survey

From Table 4 we see, that 84% of customers use the Nagad Mobile App for transactions,
payment, and other services and only 8% of the customers use USSD.

Descriptive Analysis of the Respondents

Table: 5 Descriptive Analysis

Transaction Ease of Use Service Security Customer Support

Experiences (B) (C) (D)
(A)
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10
Maximum 6 6 6 6 5 5 6 5 6 5
Minimum 1 1 1 1 1 1 1 1 1 1
Mean 2.2 2.06 1.96 2.04 2.9 2.78 2.98 3.1 3.36 2.64
Standard 1.39 1.36 1.26 1.26 1.22 1.18 1.22 1.25 1.54 1.16
Deviation
Average 2.13 2.00 2.89 3.03
Mean
Source: Field Survey

A. Transaction Experience
Table 5: shows the average mean value of the perception statements in the “Transactions
Experience” dimension is 2.13 on a 6-point Likert scale. This means that the customers are
satisfied.

B. Ease of Use
Table 5: shows the average mean value of the perception statements in the “Ease of Use”
dimension is 2.00 on a 6-point Likert scale. This means that the customers are satisfied.

C. Service Security
Table 5: shows the average mean value of the perception statements in the “Service Security”
dimension is 2.89 on a 6-point Likert scale. This means that the customers are almost satisfied.

D. Customer Support
Table 5: shows the average mean value of the perception statements in the “Customer
Support” dimension is 3.03 on a 6-point Likert scale. This means that the customers are not
almost satisfied.
Figure 1: Overall Customer Satisfaction Level
 Overall Customer Satisfaction Level
3.5

2.5

1.5

0.5

0
Transaction Experiences Ease of Use Service Security Customer Support

Source: Field Survey

Table 5 & bar graph shows that the mean values of the Perception statements in the overall
customer satisfaction level are between 2.00 t0 3.03 on a 6-point Likert scale. This means that
customers are satisfied with the Nagad mobile banking Service.

Current position of Bangladesh in Mobile Banking

Dutch-Bangla Bank Limited (DBBL) is the first bank in Bangladesh, who introduced mobile
banking service to bring poor people from remote area under smart banking service.
Bangladesh Bank has already allowed 10 banks to initiate mobile banking with the aim to
connect the deprived section of the society with the modern banking system; DBBL is the
first runner among of them. DBBL is operating this new innovative banking service through
Banglalink and Citycell mobile operator and their approved agents throughout the country.
One can create a bank account visiting any of the approved agents showing proper
documents with a fee of Tk 10. Subscriber must own a mobile phone to get the service. Once
the account is created, a 4 digit mobile banking PIN code will be provided to perform all sort
of banking activities securely and secretly. Subscriber can withdraw and deposit cash amount
from his mobile going to the agents and agents will guide and help the customers if there is
any difficulty. Since, mobile network is extremely insecure and data are sent unencrypted, a
customer can deposit or withdraw money five times a day and he can deposit or draw Tk
5,000 per day. One percent of the transaction amount or Tk 5, whichever is higher, will be
taken as cash-in-charges. In case of cash out the charge will be 2 percent of the transaction
amount or Tk 10. However, the registration fee, salary and remittance disbursement services
will be provided free of cost.
M-banking has become one of the most familiar banking service-providing technologies in
different Western countries. Nowadays billions of inhabitants of Bangladesh are within a
network through mobile network coverage. But in the commercial sectors like banking, m-
commerce technology has not been adopted broadly yet. Considering m-commerce
perspective in Bangladesh an SMS-based m-banking system has been proposed which is able
to provide several essential banking services only sending SMS to bank server from any
remote location. This proposed system is divided into five major phases: interfacing module,
SMS technology adoption module, SMS banking registration module, service generation
module, and data failover module. This system facilitates bank customers by providing four
major services like balance enquiry , balance transfer between authenticated customers, DPS
payment and bill payment without going to bank physically and save their precious time.
“BRAC Bank Limited” is set to introduce mobile banking secondly, a top official said the
service will enable millions of banked and unbanked people to deposit, withdraw, and transfer
money through mobile phones. bKash, a joint venture between BRAC Bank and US-based
Money in Motion, will provide mobile banking with a fully encrypted VISA technology
platform for transactions through mobile phones. Any mobile user can register and open up a
bKash account and then do transactions through their mobile phones in easy, convenient and
reliable way. “bKash will fundamentally change the way people now do transactions, as all
transactions will be possible through mobile phones in future,” said Syed Mahbubur Rahman,
managing director of the bank. “Customers will not need to come to the bank; rather the bank
will go to them,” he said at a press conference in Dhaka on the occasion of its 10th founding
anniversary. The bank said a bKash account will act as a digital mobile wallet and anybody
can take the service. “Your mobile phone will become your wallet. Customers can get
financial services through phones, even by the handset that costs the lowest,” Rahman
said. Under a partnership with UNDP and Local Government Division, bKash is rolling out
mobile banking in 4,501 union parishads in the country.
Nagad started its journey with demanding services like Cash-In, Cash-Out, Send Money, 50%
Bonus, and Mobile Recharge. In 2017 "Third Wave Technology Ltd" makes an agreement
with Bangladesh Post Office (BPO) for Mobile Financial Service under BPO. Though BPO
had no ownership of Third Wave Technologies Ltd, there was profit sharing between them.
Third Wave Technologies Ltd was renamed as Nagad Ltd in February 2019 allegedly without
informing BPO. In March 2019, Nagad Ltd started out as the mobile financial service (MFS)
of the Bangladesh Post Office (BPO) as the "Nagad" brand. In June 2021, BPO declared it
will own 51% share, while the remaining 49% share will be held by Nagad Ltd. (Source:
Bangladesh Bank, BRAC Bank, Nagad, Dutch Bangla Bank Website)

Limitations & Scope for Further Research

Our study exhibits a number of limitations that open up avenues for future research. To begin,
we have assessed the customer satisfaction of Nagad m-banking based on four factors.
However, the inclusion of additional factors and enabling conditions could potentially
enhance the accuracy of predicting customer satisfaction in the context of Nagad m-banking.

Another limitation pertains to the relatively small sample size, which consisted of 50
participants. This sample size may not be fully representative of the entire population,
necessitating caution when generalizing these findings to the broader customer satisfaction of
Nagad. Furthermore, it's worth noting that the insights and implications drawn from this study
were specific to a particular user group located in Rajshahi City. Therefore, future research
should aim to generalize our findings and discussions by including diverse user groups.

Recommendation

It was found that Nagad provides the financial services outside traditional bank branches
using information and communications technologies and non-bank retail agents and also
available for 365 days. It has a positive impact on transfers, payments, deposits, mobile
recharge and withdrawals in financial transactions. It is cost effective, reliable, speedy and
simple way of conducting business and reduces the instances of human error that is
characteristic during human interaction in traditional banking. So the use of Nagad should
be increased and consciousness about it must be increased as well.
It was found that although Nagad has bright prospects, it involves some constraints as well.
The major constraints in the development of Nagad include operational issues (e.g. security,
system design, implementation and maintenance), Customer support (e.g. if Nagad fails to
provide secure and trouble free financial services, this will cause reputation risk). Nagad need
to reduce these constraints.

Findings & Conclusion Of The Study

Mobile banking is a whole new sphere in Banking Sector of Bangladesh. Technology has
enabled the world to step into a new arena. To keep pace with advancing world it has become
imperative to adapt new technologies in business and banking sector. It is well recognized
that mobile phones have immense potential of conducting financial transactions thus leading
the financial growth with lot of convenience and much reduced cost. For inclusive growth,
the benefits of mobile banking should reach to the common man at the remotest locations in
the country. For this all stakeholders like Regulators, Government telecom service providers
and mobile device manufactures need to make efforts so that penetration of mobile banking
reaches from high-end to low-end users and from metros to the middle towns and rural areas.
There is also need to generate awareness about the mobile banking so that more and more
people use it for their benefit. Over the last few years, mobile telephone service extended
tremendously and it provides golden opportunities to extend m-banking service in
Bangladesh.

The findings of this study revealed that transactions experience, ease of use, service security
and customer support were the factors affecting the satisfaction level of the Nagad mobile
users to adopt mobile banking services in Bangladesh. After the descriptive test, we found
that the customers of Nagad satisfied but not highly satisfied.

Nagad is about creating financial services for people in Bangladesh who don’t have access to
banks. Bangladesh has a tremendous mobile network. It’s one of the best-networked countries
in the world: 75 percent of the population! And has access to mobile phones. Yet only nine
percent have access to conventional banking. Nagad is trying to minimize that gap. Customers
are provided with a fully encrypted Nagad mobile wallet account. However, Nagad mobile
banking customers are increasing because it is comfortable with the digital lifestyle in
Bangladesh.

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