January 11, 2009

Local firms zoom in on bank software

Domestic software developers are slowly making a niche in the local banking software market.

Presently, the banking software used for a particular branch is mostly made by local information technology (IT) firms. Also, at least six local private commercial banks (PCBs) with online banking services use locally developed online real-time software, according to sector people.

Thanks to the flourishing IT industry, the market for real-time banking software, once totally captured by foreign companies, is now being grabbed by the local firms. However, the industry has been catering to the domestic needs for branch banking solutions since the 1990s.

Branch banking software is used for a branch of a bank, while a single real-time banking software is used for keeping, processing and updating information and data of all branches of a bank.

"We have been working for a long time with real time software for banks and we have so far supplied the product to four private banks," said SM Waesh, senior vice president of Flora Systems, a local software and data entry company.

Four PCBs such as Trust Bank Ltd, NCC Bank Ltd, Jamuna Bank and Mutual Trust Bank now use 'Flora Bank', a centralised banking software, said Flora Systems officials.

According to software developers, said the cost of such a locally developed varies between Tk 1 crore and Tk 3 crore, while a foreign software costs between Tk 30 crore and Tk 40 crore.

"Apart from such cost-effectiveness, this local centralised banking software saves our hard-earned foreign currency and creates job opportunities for many,” Waesh added.

Flora and five or six local software developers, including Beximco Computers Ltd, a concern of Beximco Group, Leads, are the local players who are working to build online and branch banking software.

In addition, some banks have developed their own banking software for their own use.

After building the software for its own use, Bank Asia now markets it for other banks.

Pubali Bank Limited, Islami Bank Bangladesh Ltd and Uttara Bank Limited have also developed their branch banking and online banking software by their own to meet their needs.

Bank Asia has developed its centralised software through ERA- InfoTech Ltd, a joint venture company. Bank Asia Ltd, Ranks IT Ltd and a Dubai based IT firm are funding this project.

"We are using the software successfully and also supplied it to the locally owned Standard Bank," Irfan Uddin Ahmed, deputy managing director of Bank Asia, said, adding that the software would be exhibited in an international fair in Dubai soon to attract foreign customers.

Officials with Beximco Computers Ltd, a concern of Beximco Group, said the company supplies branch banking solutions, but it is now thinking of developing a centralised banking solution to meet the market demand.

Now over 300 branches of 15 major banks of the country use the company's software, according to the official website of Beximco Group.

Talking to The Daily Star, Shaikh Abdul Aziz, chief executive officer and managing director of LEADS Corporation Limited, a software company, said his company has developed both branch and centralized banking software including PcBANK2000 and BankUltimus. As many as 21 banks and financial institutions are using the products, he added.
Sector people attributed the competitive price and extensive after-sales-service to the increased use of local software. They said foreign solutions are dearer.

"Generally the annual service and maintenance fees account for 10-20 per cent of the total cost of a software. As the cost of local software is low, its service charge is also low," said Subodh Kumar Bhowmik, chief technical officer of Flora Systems.

He said it takes two-three years to fully customise a foreign made software because these software are made for different use in different countries. But local software are developed targeting the local market, he added.

But local customers sometimes undermine the local solutions thanking that it would not serve company purposes, Bhowmik lamented.

Source: The Daily Star, January 11, 2009

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