Many banks' apathy to local software costs them dear
Monday, 18 May 2009
Munima Sultana
Many commercial banks in the country bear nine times higher costs by installing foreign online banking software due to their less interest in the local.
According to IT and banking sector sources, the minimum installation cost of a foreign software is Tk 400 million (40 crore) while installation of the locally-developed software requires around Tk 50 million.
Software developers and banking IT sources said though many banks face difficulties in adapting the foreign software to the local banking practice, the bank managements still feel secure to use those as those are internationally tested, accepted and developed based on better configuration.
Others, who, however, tried the local said the local core banking software has now the capacity to support most of the foreign software functionalities. These include customer-centric database, open platform, high volume of transaction, value-added services, telebanking, security, etc.
Presently, only 15 per cent commercial banks have introduced the real-time online banking, the majority of them are using foreign software. Those, who have branch-to-branch online or stand-alone system, also tried the imported software. Many of these were reported virtually inoperative due to mismatch between the local banking practice and infrastructural facilities.
Those, either using totally local software or in the process of installing those, include Trust Bank, Mutual Trust Bank Ltd, NCC Bank Ltd, Jamuna Bank and Southeast Bank Ltd.
However, some other banks are also using the local software for their branch banking. They include Janata Bank, Krishi Bank, Bangladesh Commerce Bank and Agrani Bank.
An IT official with a private bank, preferring anonymity, said many banks still look for foreign software due to just mental satisfaction. He said the locally-developed core banking software can be compatible to the foreign as the software has been developed over the years through trials and errors enabling those to match the banking practice of the country.
As his bank procured foreign software, he said many of the investments in the imported software have appeared of no use due to unavailability of experts to provide day-to-day support.
The local IT firms have been developing banking software since 1990s.
Anisur Rahman Khan, Deputy Manager of Leads Corporation, a local banking software developing company, said though the country has the capacity to develop banking software, many IT firms are unwilling to invest in this area because of involvement of high costs as well as long time to get return.
To develop BankUltimus 2004, he said, Leads had to make huge investment for a long time in capacity building and human resource development. Lead's BankUltimus 2004 was the result of 20 people's four years of untiring efforts.
Subodh Kumar Bhowmic, Chief Technical Officer of Flora System Ltd, another banking software developer, said local banking software has gradually been able to overcome all the weaknesses.
Many commercial banks in the country bear nine times higher costs by installing foreign online banking software due to their less interest in the local.
According to IT and banking sector sources, the minimum installation cost of a foreign software is Tk 400 million (40 crore) while installation of the locally-developed software requires around Tk 50 million.
Software developers and banking IT sources said though many banks face difficulties in adapting the foreign software to the local banking practice, the bank managements still feel secure to use those as those are internationally tested, accepted and developed based on better configuration.
Others, who, however, tried the local said the local core banking software has now the capacity to support most of the foreign software functionalities. These include customer-centric database, open platform, high volume of transaction, value-added services, telebanking, security, etc.
Presently, only 15 per cent commercial banks have introduced the real-time online banking, the majority of them are using foreign software. Those, who have branch-to-branch online or stand-alone system, also tried the imported software. Many of these were reported virtually inoperative due to mismatch between the local banking practice and infrastructural facilities.
Those, either using totally local software or in the process of installing those, include Trust Bank, Mutual Trust Bank Ltd, NCC Bank Ltd, Jamuna Bank and Southeast Bank Ltd.
However, some other banks are also using the local software for their branch banking. They include Janata Bank, Krishi Bank, Bangladesh Commerce Bank and Agrani Bank.
An IT official with a private bank, preferring anonymity, said many banks still look for foreign software due to just mental satisfaction. He said the locally-developed core banking software can be compatible to the foreign as the software has been developed over the years through trials and errors enabling those to match the banking practice of the country.
As his bank procured foreign software, he said many of the investments in the imported software have appeared of no use due to unavailability of experts to provide day-to-day support.
The local IT firms have been developing banking software since 1990s.
Anisur Rahman Khan, Deputy Manager of Leads Corporation, a local banking software developing company, said though the country has the capacity to develop banking software, many IT firms are unwilling to invest in this area because of involvement of high costs as well as long time to get return.
To develop BankUltimus 2004, he said, Leads had to make huge investment for a long time in capacity building and human resource development. Lead's BankUltimus 2004 was the result of 20 people's four years of untiring efforts.
Subodh Kumar Bhowmic, Chief Technical Officer of Flora System Ltd, another banking software developer, said local banking software has gradually been able to overcome all the weaknesses.