e-business in Bangladesh: An analysis
Wednesday, 28 April 2010
Muhammad Mahboob Ali and Nargis Akter
Bangladeshi companies and organizations have several problems to start full swing e-business. These include limited resources, backwardness in technology, managerial inefficiency, socio-infrastructural problem such as corruption, default culture, law and order situation, rampant corruption, strike etc. Good governance and investment friendly environment are required in Bangladesh. Network is a mode of communications with the computers. Networks of computers can be classified in following ways: Local area network, Metropolitan area network, and World Wide area network. Multiple computers connected through telephone lines, cable systems, and in wireless technology are also required.
WiMAX stands for Worldwide Interoperability for Microwave Access which offers wireless transmission of data via different transmission modes, from links to portable and fully mobile internet access.
Telephone density is poor in Bangladesh. It is much less in comparison with other developed nations of the world as well as neighboring countries. Most people in Bangladesh live in villages where amenities for ICT are almost nonexistent. A huge digital divide exists between the city of Dhaka and the rest of the country.
Private-public partnership is a crucial issue for information and communication technology (ICT) development and application. Private enterprise and capital can lead ICT revolution in Bangladesh. This, however, would require the government to provide the enabling environment. Rapid growth in ICT is not possible without massive investments for ICT infrastructure and human resource development through quality education. Still now call charge of cell phone is very high in Bangladesh. However the infrastructure shortcomings of Bangladesh are creating less scope for e-business.
Under the private initiative, Internet service started in 1996 by ISN in Bangladesh. It was the first ISP operator in this country. Still now all the Internet service providers have their server abroad, for which they are facing competitive disadvantage, as cost remains high. Security problem is still high in this country. Moreover, some software developers of the country aren't well conversant with the market demand.
Policy makers of the country are not aware of the benefits of e-business .As such they don't put significance on proper and systematic development of the process of e-business. In this connection it may be stated that Bangladesh Bank is trying to implement automated clearinghouse through utilising MICR procedure. But in developed nations MICR procedure is now replaced by more sophisticated procedure such as cheque truncation process.
Total numbers of Banks in Bangladesh are forty eight. At present the banks in Bangladesh are using the limited electronic banking services. Foreign banks operating in the country provide ATM, debit card, credit card, home banking, Internet banking, phone banking, on line banking etc. services.
Among the local banks, the Private Banks are ahead of the public banks. Prime bank ltd. , Dhaka bank ltd., BRAC bank ltd., Dutch-Bangla bank ltd.,, Eastern and Mercantile bank ltd., are already stepped on towards electronic banking facilities. Apart from these banks, Mutual Trust Bank ltd., also introduced ATM service. Among the four Nationalized Commercial Banks (NCBs), Janata bank ltd., has some access to the electronic banking facilities. Bangladesh Bank, the Central Bank of Bangladesh, is also trying to formulate the wide structure of electronic banking facilities. All of these private banks offering limited on line banking services. Most of these banks only offer services by providing ATM card. Most of them do not offer wide range of internet banking facilities which is the main advantages of e-banking.
In the context of Bangladesh, a country of more than 140 million people, it is to be realized that there is no other option for us than to join the current trend. Otherwise it is almost impossible to bring any sort of fruitful achievement for the country.
E-business is still not very much progressed in Bangladesh. Mass awareness is not feasible. The country faces problem of developing human resources. Without preparing human capital at the level of international standard, we cannot compete in global market and successful e-business cannot be feasible.
From the filed level study we observe that nationalised commercial banks and sepcialised banks are still lagging behind in introduction of on-line banking services. Moreover, customers are not satisfied with the quality of the services. Although it reveals that e-business especially with the help of on line banking can manage economy of Bangladesh in a better way as customer satisfaction increases.
The shortage of technology-based human resources and poor telecommunication infrastructure needs to be overcome to break low equilibrium trap. Bridging the digital divide would provide technology-based human resources, who can contribute to raise gross domestic product (GDP), national savings and investment.
The main problems has been identified in on line banking system in Bangladesh numerous. Some of them are inefficiency and inadequate knowledge of the bank management about the on line banking, lack of proper Strategic plan to gain and retain market share of the indigenous banks, lack of international standard communication channel, high cost of establishing on line banking system, inadequate back and front office management, lack of integrated plan among the banks and Bangladesh Bank authority and inefficient clearing house facilities, inappropriate software.
Using Internet facility is still very costly and people have little knowledge about computer operation. Although online banking has bright prospects, it involves some financial risks as well. The major risk of online banking includes operational risks.
E-business can add value to services to the customers. Successful e-business depends on sharing of strategic knowledge for which dissemination of the information and free flow of knowledge around the globe is required. Online banking can provide twenty four hours banking facilities. Through electronic data interchange customers are able to draw money from one branch to another. Even letter of credits can be sent through SWIFT. Actually, online banking provides faster, reliable services.
To avail of the advantage of e- business, firms have to invest for software, infrastructure development. But the firms are not interested to invest because they consider the expense as cost not investment.
Due to advent of e-business, especially online banking system, the distribution channel is also changing. But quality of banking products should be of international standards.
Business sector should be encouraged to make their own investment in the application of ICT in production, trade and services.
In Bangladesh, the online banking system is in the preliminary stage. The government should create a congenial environment for this sector. The clearing house operation in Bangladesh should be fully automated. The country needs innovative polices, strengthening of public institutions and development of e-business with the help of ICT. ICT application and development of software are very much dependent on the quality of the workforce, and supportive infrastructure and environment. E-business can help improve the quality of management. (Dr. Muhammad Mahboob Ali is Professor, School of Business and Economics, Atish Dipankar University of Science and Technology, and Nargis Akter is Assitant Professor and Head of Department of Computer Science and Engineering, Institute of Science and Techonology, Dhaka. The authors can be reached at:
E-mail : pipulbd@gmail.com)
Bangladeshi companies and organizations have several problems to start full swing e-business. These include limited resources, backwardness in technology, managerial inefficiency, socio-infrastructural problem such as corruption, default culture, law and order situation, rampant corruption, strike etc. Good governance and investment friendly environment are required in Bangladesh. Network is a mode of communications with the computers. Networks of computers can be classified in following ways: Local area network, Metropolitan area network, and World Wide area network. Multiple computers connected through telephone lines, cable systems, and in wireless technology are also required.
WiMAX stands for Worldwide Interoperability for Microwave Access which offers wireless transmission of data via different transmission modes, from links to portable and fully mobile internet access.
Telephone density is poor in Bangladesh. It is much less in comparison with other developed nations of the world as well as neighboring countries. Most people in Bangladesh live in villages where amenities for ICT are almost nonexistent. A huge digital divide exists between the city of Dhaka and the rest of the country.
Private-public partnership is a crucial issue for information and communication technology (ICT) development and application. Private enterprise and capital can lead ICT revolution in Bangladesh. This, however, would require the government to provide the enabling environment. Rapid growth in ICT is not possible without massive investments for ICT infrastructure and human resource development through quality education. Still now call charge of cell phone is very high in Bangladesh. However the infrastructure shortcomings of Bangladesh are creating less scope for e-business.
Under the private initiative, Internet service started in 1996 by ISN in Bangladesh. It was the first ISP operator in this country. Still now all the Internet service providers have their server abroad, for which they are facing competitive disadvantage, as cost remains high. Security problem is still high in this country. Moreover, some software developers of the country aren't well conversant with the market demand.
Policy makers of the country are not aware of the benefits of e-business .As such they don't put significance on proper and systematic development of the process of e-business. In this connection it may be stated that Bangladesh Bank is trying to implement automated clearinghouse through utilising MICR procedure. But in developed nations MICR procedure is now replaced by more sophisticated procedure such as cheque truncation process.
Total numbers of Banks in Bangladesh are forty eight. At present the banks in Bangladesh are using the limited electronic banking services. Foreign banks operating in the country provide ATM, debit card, credit card, home banking, Internet banking, phone banking, on line banking etc. services.
Among the local banks, the Private Banks are ahead of the public banks. Prime bank ltd. , Dhaka bank ltd., BRAC bank ltd., Dutch-Bangla bank ltd.,, Eastern and Mercantile bank ltd., are already stepped on towards electronic banking facilities. Apart from these banks, Mutual Trust Bank ltd., also introduced ATM service. Among the four Nationalized Commercial Banks (NCBs), Janata bank ltd., has some access to the electronic banking facilities. Bangladesh Bank, the Central Bank of Bangladesh, is also trying to formulate the wide structure of electronic banking facilities. All of these private banks offering limited on line banking services. Most of these banks only offer services by providing ATM card. Most of them do not offer wide range of internet banking facilities which is the main advantages of e-banking.
In the context of Bangladesh, a country of more than 140 million people, it is to be realized that there is no other option for us than to join the current trend. Otherwise it is almost impossible to bring any sort of fruitful achievement for the country.
E-business is still not very much progressed in Bangladesh. Mass awareness is not feasible. The country faces problem of developing human resources. Without preparing human capital at the level of international standard, we cannot compete in global market and successful e-business cannot be feasible.
From the filed level study we observe that nationalised commercial banks and sepcialised banks are still lagging behind in introduction of on-line banking services. Moreover, customers are not satisfied with the quality of the services. Although it reveals that e-business especially with the help of on line banking can manage economy of Bangladesh in a better way as customer satisfaction increases.
The shortage of technology-based human resources and poor telecommunication infrastructure needs to be overcome to break low equilibrium trap. Bridging the digital divide would provide technology-based human resources, who can contribute to raise gross domestic product (GDP), national savings and investment.
The main problems has been identified in on line banking system in Bangladesh numerous. Some of them are inefficiency and inadequate knowledge of the bank management about the on line banking, lack of proper Strategic plan to gain and retain market share of the indigenous banks, lack of international standard communication channel, high cost of establishing on line banking system, inadequate back and front office management, lack of integrated plan among the banks and Bangladesh Bank authority and inefficient clearing house facilities, inappropriate software.
Using Internet facility is still very costly and people have little knowledge about computer operation. Although online banking has bright prospects, it involves some financial risks as well. The major risk of online banking includes operational risks.
E-business can add value to services to the customers. Successful e-business depends on sharing of strategic knowledge for which dissemination of the information and free flow of knowledge around the globe is required. Online banking can provide twenty four hours banking facilities. Through electronic data interchange customers are able to draw money from one branch to another. Even letter of credits can be sent through SWIFT. Actually, online banking provides faster, reliable services.
To avail of the advantage of e- business, firms have to invest for software, infrastructure development. But the firms are not interested to invest because they consider the expense as cost not investment.
Due to advent of e-business, especially online banking system, the distribution channel is also changing. But quality of banking products should be of international standards.
Business sector should be encouraged to make their own investment in the application of ICT in production, trade and services.
In Bangladesh, the online banking system is in the preliminary stage. The government should create a congenial environment for this sector. The clearing house operation in Bangladesh should be fully automated. The country needs innovative polices, strengthening of public institutions and development of e-business with the help of ICT. ICT application and development of software are very much dependent on the quality of the workforce, and supportive infrastructure and environment. E-business can help improve the quality of management. (Dr. Muhammad Mahboob Ali is Professor, School of Business and Economics, Atish Dipankar University of Science and Technology, and Nargis Akter is Assitant Professor and Head of Department of Computer Science and Engineering, Institute of Science and Techonology, Dhaka. The authors can be reached at:
E-mail : pipulbd@gmail.com)