5.

SOCIAL COST-BENEFIT ANALYSIS OF MOBILE BANKING

Cost-benefit analysis is mainly, but not exclusively, used to assess the value for money of very
large private and public sector projects. This is because such projects tend to include costs and
benefits that are less amenable to being expressed in financial or monetary terms (e.g.
environmental damage), as well as those that can be expressed in monetary terms.
5.1. DEFINITION OF CBA
Cost-enefit !nalysis (C!) estimates and totals up the e"uivalent money value of the benefits
and costs to the community of projects to establish whether they are worthwhile.
5.2. PRINCIPLES OF COST BENEFIT ANALYSIS
#ne of the problems of C! is that the computation of many components of benefits and costs is
intuitively obvious but that there are others for which intuition fails to suggest methods of
measurement. Therefore some basic principles are needed as a guide.
$. There %ust e a Common &nit of %easurement
'. C! (aluations )hould *epresent Consumers or +roducers (aluations !s *evealed by
Their !ctual ehavior
,. enefits !re &sually %easured by %ar-et Choices
.. )ome %easurements of enefits *e"uire the (aluation of /uman 0ife
1. The !nalysis of a +roject )hould 2nvolve a 3ith (ersus 3ithout Comparison
4. The !nalysis of a +roject )hould 2nvolve a 3ith (ersus 3ithout Comparison
5. 6ouble Counting of enefits or Costs %ust be avoided
7. 6ecision Criteria for +rojects
5.3. EXAMPLES
For SCBA I consider the following variables
From Bank point of view
Administrative Cost
Smart card cost
From Client point of view
Reduce cost
Save money
Administrativ C!st"
Bank expends some cost for clients suppose they recruit employee for client
and also provide some paper materials for transactions!
For example a person wants to transfer some amount money to other
account! Bank " provides some papers for this transaction and recruits an
employee for #$$ clients in a day! In the case of existing system followings
are steps followed for the above service!
% Clients go to the branch
% Fill up a form
% A bank employee checks that and transfers the money!
Suppose
&aper cost ' #!$$ tk per transactions
(mployee cost' )$$$$ tk per month for #$$ clients every day
*ow we consider the following real example to +nd out the bene+t of the
proposed system! ,e consider that the above process comes under the
proposed -%banking infrastructure! So it performs all remittance functions in
real time!
,e can +nd out the net pro+t calculated.
*et pro+t ' /#0#$$0))0#)1 2 /)$$$$0#)1
' )34$$ 2 )4$$$$
' )334$$ tk
CONCL#$ING %EMA%KS"
If the above function is done with the traditional banking system society will
incur a loss amount to tk )334$$!$$ but under the -obile banking system
society will gain by expediting the transaction! So from the social perspective
the -obile banking pro5ect is acceptable!
Smart &ard &!st"
Bank issue a smart card for their clients!
Suppose Smart card cost is 6$ taka for per client!
(very day average 7$ people open account in bank! So in a month smart
card cost for bank is 66$$$ tk!
*ow we consider the following real example to +nd out the bene+t of the
proposed system! ,e consider that the above process comes under the
proposed -%banking infrastructure! So there is no need of smart card client
draw their money by pin number from A8- booth!
,e can +nd out the net pro+t calculated.
*et pro+t ' 7$06$0))0#)
' 6 93$$$ tk
CONCL#$ING %EMA%KS"
If the above function is done with the traditional banking system society will
incur a loss amount to tk 6 93$$$!$$ but under the -obile banking system
society will gain by expediting the transaction! So from the social perspective
the -obile banking pro5ect is acceptable!
%d'& C!st"
If clients want to transfer money in:uiry balance he;she have to go bank!
(xamle %r 8 wants to transfer money to %r 9. %r 8 have to go an- ranch which in where
ric-shaw is the only and main means of communication. !fter completing the form, 60 will
transfer it. The social cost of that community will be li-e this:
!ssumption:
% ;eed ,< ta-a for one way transport cost
% ;eed $.1 hour to finish all procedure
*ow we consider the following real example to +nd out the bene+t of the
proposed system! ,e consider that the above process comes under the
proposed -%banking infrastructure! So there is no need to go bank branch
client transfer their money by their mobile phone instantly!
,e can +nd out the reduce cost calculated.
Reduce Cost ' /6$0)1tk
' 3$ tk
8ime save ' #!7 hours
CONCL#$ING %EMA%KS"
2f %obile ban-ing services are available the reduce cost would be t-4< and time saved $.1
hours. ;o doubt about the clients personal benefit of the %obile ban-ing.
Sav m!n("
If clients open a traditional bank account Bank charges 39$ tk yearly for
debit card and others!
*ow we consider the following real example to +nd out the bene+t of the
proposed system! ,e consider that the above process comes under the
proposed -%banking infrastructure! So there is no need to debit card and
there is no charges will deducted from account!
CONCL#$ING %EMA%KS"
2f %obile ban-ing services are available then client save 4=< t- per year. ;o doubt about the
clients personal benefit of the %obile ban-ing.