Challenges of Digital Governance in the Financial Sector in Bangladesh

Abstract

The digital financial sector has emerged as a major driving force for the national economy of Bangladesh. In this context, the relevance of digital governance practices in the financial sector tend to become critical in recent times. The purpose of this study is to explore and examine the digital governance practices in the financial sector of Bangladesh. The study attempts to explore new creative knowledge on digital governance practices in the financial sector by analyzing, synthesizing, and reflecting on previous research e.g. existing literature with an emphasis on review. The study is mainly based on a mixed method of non-experimental and descriptive research design. The survey found positive results of massive improvement in Bangladesh's digital financial sector. It can be observed that citizens are eagerly accepting the services of the digital financial sector as a major equipment in their daily lives. The survey shows that 99% percent of the respondents use their own smartphones, digital gadgets, notebook computers, and tablets. About four-fifths of rural poor households use a smartphone for digital money transfer. 95% percent of the respondents in the survey said that they can deposit, transfer, withdraw, and invest money using their smartphone. As a result, the role of middlemen in the financial sector has been reduced and the citizens of Bangladesh have access to automated financial services at reasonable and affordable prices. The survey reveals that Bangladesh's new generation of well-educated citizens has already grown up as 'digital natives'. They are the ones who are using and preferring the innovative works of the digital financial sector as a tool. They feel more comfortable shopping from online stores than going to the market; they have become accustomed to transacting money in the financial sector through debit-credit plastic cards and digital wallets anytime, anywhere and hassle-free cash transaction benefits. The convenience and trusted security of the digital financial sector have further motivated the citizens of the country to adopt this method. The digital financial sector has attracted wide attention among all segments of the population to provide benefits to citizens. Most households in urban and rural Bangladesh are regularly using the digital financial sector to pay utility bills. According to the respondents, the digital financial sector saves their transaction time and cost. The digital financial sector is playing an important role in increasing revenue and profits, and digital inclusion influencing the growth of the financial sector resulting in the further expansion of Bangladesh's mainstream economy has geared up. Most of the respondents agree— they will increase transactions in the digital financial sector in the future. In addition, the study analyzed the current service quality of the digital financial sector and found that the digital financial sector is helping every household in Bangladesh avoid financial crisis, debt, robbery, and theft. Protects against holding and carrying paper cash money. To smooth the trajectory of the digital financial sector in smart Bangladesh, this study attempts to explore how to mitigate the security issues of AI collaboration in the future digital financial sector. The study identified some of the issues and challenges hindering strong, sustainable growth of the digital financial sector. Bangladesh require exploring new and innovative forms of the financial services to make the country sustainable. Also, there is no alternative to adopting strategies consistent with international standard governance practices and implementation. A simple and thorough understanding of the complexity of financial automation is essential to meet the demands of the future digital age. The study specifically recommends that the rate of digital financial literacy should be increased in the coming days. The findings and recommendations of the study may provide momentum to policymakers' ongoing efforts to address the challenges of digital governance practices in the financial sector in Bangladesh.