i. Forensic investigation techniques to trace marketing practices and detect irregularities or non-compliance.

ii. Audit analysis to assess the level of transparency, consistency, and adherence to financial reporting standards in bancassurance operations.

i. Interviews: Semi-structured interviews with key stakeholders, including marketing managers of insurance companies and partner banks, internal auditors and compliance officers.

ii. Regulators of Bancassurance, Insurance Development and Regulatory Authority—IDRA.

iii. Surveys: Structured questionnaires distributed to employees involved in bancassurance operations to assess awareness, ethical practices and transparency.

i. Annual reports of banks and insurance companies & Audit reports and compliance statements.

ii. Regulatory guidelines and circulars from IDRA and Bangladesh Bank.

iii. Case studies of reported fraud or audit inconsistencies.

iv. Interviews with relationship managers, insurance agents, sales officers & a few customers.

i. Ratio analysis to detect revenue/sales irregularities

ii. Benford’s Law for anomaly detection in sales data

i. Use RPA (Robotic Process Automation) to sift through large volumes of transaction and sales data.

ii. Identify patterns of aggressive sales or policy lapses.

i. Compare marketing and audit practices with other countries in South Asia.

ii. Benchmark against best practices recommended by the IAIS and IFAC.

i. Evaluate the independence and integrity of internal and external audit functions.

ii. Assess alignment with ISA 240 (auditor’s responsibility & SOP to detect fraud).

i. Ensure compliance with the IDRA Act 2010, Insurance Act 2010, and Bangladesh Bank guidelines on bancassurance.

ii. Review if sales practices align with customer protection principles.

i. Triangulation is used by cross-verifying data from interviews, surveys and documents.

ii. Peer review of forensic findings by independent audit professionals is conducted to ensure credibility.

iii. A pilot survey is conducted to refine questionnaire clarity and reliability

i. Informed consent obtained from all participants.

ii. Institutional confidentiality and data anonymity are strictly maintained.

iii. Approval from a relevant ethics review board is secured before fieldwork begins.

Agency theory suggests that conflicts of interest arise when financial intermediaries prioritize sales targets over consumer protection. Several studies highlight that bancassurance sales representatives in Bangladesh often prioritize commissions over ethical considerations, leading to mis-selling and misinformation.

The fraud triangle ( Cressey, 1953 ) outlines three elements of fraudulent behavior: pressure, opportunity, and rationalization. Research indicates that aggressive bancassurance marketing creates opportunities for financial misrepresentation due to weak regulatory oversight.

Porter’s (1993) audit expectation gap theory suggests that stakeholders often assume audits provide absolute fraud prevention, whereas audits only detect irregularities under existing frameworks. In Bangladesh, audit reports in bancassurance often fail to expose mis-selling and hidden charges, creating trust issues among consumers.

Studies reveal that many bancassurance consumers in Bangladesh are unaware of policy terms and risks, leading to disputes over policy claims and benefits ( Khan, 2022 ). Misrepresentation, aggressive cross-selling, and hidden charges are common forensic red flags in bancassurance marketing.

With the digitization of banking services, bancassurance has expanded through mobile banking and online platforms. However, cybersecurity risks, data breaches, and fraudulent online sales have emerged as forensic concerns ( Kabir & Das, 2023 ).

Bangladesh Bank and the Insurance Development & Regulatory Authority (IDRA) govern bancassurance, but regulatory inconsistencies create opportunities for financial malpractice. Comparative studies suggest that countries with stricter bancassurance compliance mechanisms, such as India and Malaysia, experience fewer cases of fraud ( Nasir et al., 2021 ).

Research indicates that internal audits in Bangladeshi financial institutions often lack the depth required to detect policy misrepresentation and unauthorized transactions ( Rahman, 2021 ). Furthermore, audit reports frequently fail to disclose hidden charges, contributing to financial disputes.

Modern forensic auditing techniques, including artificial intelligence (AI) and big data analysis, have been instrumental in detecting bancassurance fraud in global markets ( Patel, 2022 ). Studies recommend the integration of forensic auditing tools in Bangladesh’s financial sector to enhance transparency.

Bangladesh’s bancassurance industry is primarily regulated by Bangladesh Bank and the Insurance Development & Regulatory Authority (IDRA). Despite regulatory guidelines, gaps in enforcement have been observed, leading to potential financial misconduct. Comparative studies from other countries indicate that stricter regulatory frameworks, such as those implemented in India and Malaysia, have improved consumer protection and minimized fraudulent practices ( Haque & Rahman, 2020 ).

Limited consumer awareness regarding bancassurance products remains a critical challenge in Bangladesh. Research by Hasan & Alam (2021) indicates that many policyholders lack a clear understanding of policy terms, leading to disputes and financial distress. Ethical concerns in bancassurance marketing, such as pressure selling and mis-selling, have been widely reported in studies on financial fraud ( Roy & Sarker, 2020 ).

With the rise of digital banking, bancassurance marketing is shifting toward digital platforms, raising new concerns about data security, fraud prevention, and financial literacy. Future research suggests the need for stricter regulatory oversight, enhanced forensic auditing techniques, and consumer education programs to ensure the ethical and transparent growth of bancassurance in Bangladesh.

Enforce mandatory forensic audits and stricter penalties for fraudulent bancassurance practices.

Enhancing fraud detection and ensuring real-time transparency in bancassurance transactions.

Educating policyholders on policy terms, risks, and fraud prevention measures.

External forensic auditors should be introduced to reduce conflicts of interest in financial reporting.

A Bancassurance Marketing Model outlines how banks and insurance companies collaborate to market and distribute insurance products. The model varies based on the level of integration, sales strategy, and revenue-sharing mechanisms between the two financial entities. In summary, Figure 1 shows the Key Elements of a Bancassurance Marketing Model.

A well-structured bancassurance marketing model consists of the following components:

Figure 2 demonstrates the Bancassurance marketing models, which indicate two separate models of marketing & branding in banca & insurance, Bancassurance.

i. Open Architecture Model

- The bank collaborates with multiple insurance providers.

- Customers have a wide range of insurance products to choose from.

- Example: A bank offers life insurance from Company A and health insurance from Company B.

ii. Exclusive Partnership Model

- A bank partners with a single insurance company for all its insurance offerings.

- Ensures strong brand loyalty and deep integration.

- Example: A bank exclusively sells insurance policies from one insurer.

iii. Financial Holding Company Model

- The bank owns a stake in an insurance company or vice versa.

- Ensures long-term collaboration and shared profits.

- Example: A bank acquires or establishes an insurance subsidiary.

i. Referral Model

- The bank refers customers to the insurance company without direct involvement in sales.

- The bank earns a referral fee for every successful sale.

ii. Integrated Sales Model

- Bank employees actively promote and sell insurance products to customers.

- Requires staff training and dedicated bancassurance teams.

iii. Hybrid Model

- A combination of direct sales by bank employees and referrals to external insurance agents.

- Maximizes both customer engagement and specialized insurance services.

i. Objective: Assess the contractual agreement between the bank and the insurance company.

ii. Audit Actions: Review partnership agreements to ensure they comply with regulatory frameworks (Bangladesh Bank & IDRA guidelines). Check revenue sharing models (commission-based, fee-based, or profit-sharing). Verify exclusivity clauses, marketing responsibilities, and risk-sharing mechanisms.

i. Objective: Ensure bancassurance marketing follows ethical and legal standards.

ii. Audit Actions: Assess bancassurance advertising materials (brochures, websites, SMS, social media) for compliance with financial disclosure laws. Verify that marketing campaigns are not misleading or coercive. Check adherence to customer data privacy laws in targeted marketing efforts.

i. Objective: Identify mis-selling risks and assess customer engagement.

ii. Audit Actions: Review customer sales scripts, telemarketing practices, and in-branch bancassurance sales techniques. Examine how employees and agents explain policy terms, benefits, exclusions, and costs. Conduct mystery shopping or customer surveys to detect misleading sales tactics.

i. Objective: Ensure proper documentation and informed consent from customers.

ii. Audit Actions: Review signed policy agreements to check for proper disclosures. Verify that customers receive the required Key Facts Document (KFD) and policy summary. Cross-check sales records against customer complaints related to mis-selling or forced insurance purchases.

i. Objective: Ensure all bancassurance operations comply with regulatory guidelines.

ii. Audit Actions: Assess compliance with Bangladesh Bank and IDRA regulations. Verify if banks and insurers file regulatory reports accurately and on time. Identify any gaps in compliance, such as unapproved product bundling or unauthorized fees.

i. Objective: Detect financial irregularities in bancassurance revenue flows.

ii. Audit Actions: Review revenue-sharing calculations to confirm transparency in commission payments. Cross-check revenue recognition practices with financial statements. Investigate any unauthorized deductions, hidden fees, or fraudulent transactions.

i. Objective: Identify patterns of consumer grievances related to bancassurance.

ii. Audit Actions: Examine customer complaints, dispute resolution cases, and regulatory penalties. Investigate how disputes are handled in terms of timeliness, fairness, and outcomes. Ensure grievance redressal mechanisms meet industry best practices.

i. Objective: Evaluate the effectiveness of internal control mechanisms in detecting fraud.

ii. Audit Actions: Review how banks and insurers conduct internal audits of bancassurance operations. Assess fraud detection mechanisms, including forensic audits and risk mitigation strategies. Identify weaknesses in risk management frameworks that allow unethical practices.

i. Objective: Provide actionable insights to improve bancassurance transparency.

ii. Audit Actions: Summarize audit findings in a detailed audit report. Highlight compliance breaches, unethical marketing practices, and financial inconsistencies. Recommend corrective measures such as better staff training, improved financial disclosures, and enhanced customer protection policies.

By systematically auditing bancassurance marketing, financial institutions can ensure compliance, protect consumers and detect fraud. Strengthening regulatory controls, improving audit transparency and training sales teams can significantly reduce unethical bancassurance practices.

Bangladesh has seen rapid growth in banking coverage and mobile financial services. This opens up large untapped markets for insurance products in rural and semi-urban areas.

The growing middle class is more aware of financial planning and risk management. Increased life expectancy and health concerns have led to higher interest in life insurance.

Banks are digitizing services, which aligns well with selling simple life insurance policies (like term insurance) online or via mobile banking.

Regulatory support from the Insurance Development and Regulatory Authority (IDRA) and Bangladesh Bank is encouraging new bancassurance frameworks.

Bangladesh has over 100 million bank account holders, many of whom are not insured. Bancassurance can be a bridge to bring insurance to these individuals.

Insurance penetration is less than 1% of GDP—well below the regional average—signaling massive room for growth.

Customized, low-cost life insurance products tailored to specific customer segments (e.g., farmers, women entrepreneurs) can drive uptake.

Customers often trust banks more than insurers, making them more likely to purchase insurance through banks.

The legal framework for bancassurance is still evolving in Bangladesh.

Many consumers don’t understand life insurance benefits.

Bank staff often lack the training to effectively sell insurance.

Bancassurance was practically nonexistent in Bangladesh due to a lack of a regulatory framework & the insurance sector was highly traditional, focusing on direct sales by agents.

With economic growth and the rise of middle-income consumers, the demand for financial products increased. Some banks informally collaborated with insurance firms, offering insurance as a side product, often under group schemes. The Insurance Development and Regulatory Authority (IDRA) began considering the potential of bancassurance.

In 2022, IDRA and Bangladesh Bank jointly developed the Bancassurance Guideline, a crucial milestone. In 2023, Bangladesh formally launched Bancassurance, with banks allowed to sell insurance under certain regulatory conditions. Banks must set up dedicated bancassurance wings, and only life and non-life insurance approved by IDRA can be offered.

For many years, the financial sector in Bangladesh operated with a clear distinction between banking and insurance. Banks primarily focused on deposit-taking and lending, while insurance companies managed risk-related services. There was little to no collaboration between these sectors.

The absence of a regulatory framework was a major barrier. The Insurance Act 2010 and guidelines from the Insurance Development and Regulatory Authority (IDRA) did not initially provide for bancassurance.

Both banks and customers were largely unaware of how bancassurance works, and there was a lack of skilled personnel to implement it.

As financial inclusion became a national agenda and the need for insurance coverage increased, the government and regulatory authorities began exploring ways to expand the insurance market.

Collaborative discussions started between Bangladesh Bank and IDRA to establish a regulatory framework.

A few insurance companies, in collaboration with progressive banks, launched pilot projects under limited scopes to test the feasibility of bancassurance.

Success stories from neighboring countries like India, Sri Lanka, and Malaysia influenced policymakers.

A significant milestone in the journey of bancassurance in Bangladesh came with the issuance of formal guidelines.

IDRA, in collaboration with Bangladesh Bank, officially issued bancassurance guidelines in early 2023. Only life insurance products were initially allowed. Banks needed to get separate licenses for bancassurance activities. Training requirements for bank staff were mandated.

The primary goal was to increase insurance penetration, support financial literacy, and leverage banks’ outreach.

With formal regulations in place, several banks and insurance companies have begun forming strategic partnerships.

Banks like BRAC Bank, Eastern Bank Limited, and City Bank have entered into agreements with top life insurance providers.

Products include term life insurance, health coverage, education and savings plans, and micro-insurance policies.

There is a growing interest, particularly among salaried individuals and middle-income customers.

Insurance literacy remains low among the general public.

Bank staff need continuous training to effectively sell and explain insurance products.

Some customers still view insurance with skepticism due to historical mismanagement in the sector.

Seamless integration between banking and insurance platforms is still developing.

Future updates to regulations may allow non-life products.

Mobile and internet banking platforms could become key sales channels.

Especially relevant for rural and underserved populations.

With better training and digital tools, customer service is expected to improve significantly.

The journey of bancassurance in Bangladesh reflects a growing effort to modernize and integrate financial services for broader access. From concept to implementation, the industry has made notable strides in a short time. With supportive regulations, increased awareness, and strategic collaboration, bancassurance is poised to become a cornerstone of financial inclusion in Bangladesh.

Bangladesh currently has one of the lowest insurance penetration rates in South Asia. By using the wide branch networks of banks, insurance companies can reach millions of customers who may not have considered or had access to insurance before. This can rapidly increase coverage in both urban and rural areas.

Many people in Bangladesh are hesitant to buy insurance due to a lack of trust or limited understanding. However, banks generally enjoy higher levels of trust and loyalty. When insurance products are offered by a customer’s own bank, they’re more likely to be accepted and adopted ( KPMG, 2020 ).

Bancassurance provides customers with a one-stop shop for financial services, combining savings, loans, and insurance under one roof. This convenience encourages more people to consider insurance as part of their financial planning, boosting the overall insurance culture in the country.

With banks and insurance companies working together, new and more tailored insurance products can be developed such as credit-linked insurance, micro insurance, and investment cum insurance plans that cater to specific segments like farmers, SMEs, or salaried individuals.

Banks have valuable customer data that can help insurance companies offer more personalized products. For example, a customer with a home loan could be offered home insurance or life cover. This data integration improves efficiency and makes insurance offers more relevant.

Bancassurance also plays a role in educating the public about the importance of insurance. As bank staff are trained to offer insurance solutions, they can help demystify insurance concepts for customers, especially in regions where insurance literacy is low.

By increasing insurance coverage, bancassurance indirectly contributes to national economic stability. Insurance helps protect families and businesses from financial shocks, which in turn supports consumption, investment, and overall economic resilience.

In Bangladesh, the Bancassurance marketing documentation process involves maintaining proper records of all promotional and sales activities conducted by banks in collaboration with insurance companies. This is governed by regulations from IDRA and Bangladesh Bank to ensure transparency, fair customer treatment, and compliance. All marketing-related documents should be preserved for a minimum of 5 years, as per IDRA guidelines. In Figure 9 , we can see the marketing to customer documentation process in Bangladesh ( Farooq & Habib, 2018 ).

The Bancassurance Audit Verification Process in Bangladesh involves a systematic review of documentation and procedures related to the sale of insurance products through banks. This process ensures compliance with regulatory guidelines set by the Insurance Development and Regulatory Authority (IDRA) and Bangladesh Bank (BB). This audit process helps maintain transparency, protect customer interests, and reduce operational and compliance risks in the Bancassurance model. In Figure 10 , we can see the Bancassurance, Audit Verification Process in Bangladesh ( Bangladesh Bank, 2020 ).