Banks should use services from local IT firms

Bangladesh's financial institutions largely choose foreign IT companies while buying business solutions, a practice that is affecting the local industry's growth potential, speakers said yesterday.

The local industry will not flourish if the financial sector does not accept and encourage locally developed IT products, they said on the first day of a two-day seminar: 'Biz Tech B2B Conference'.

The ICT Division and Bangladesh Association for Software and Information Services jointly organised the event at the capital's Pan Pacific Sonargaon hotel.

About 1,500 IT firms of the country are capable of providing financial solutions to banks, but just 199 of them are currently engaged in the manner, said Muinul Islam, chief technology officer of LankaBangla Securities.

The financial institutions of Bangladesh have begun to move towards technology to improve their business operations but a significant automation opportunity remains untapped.

Cooperation between the two sectors will bring further development for the country, he said.  

Local financial institutions are attracted to foreign IT firms for the brand value despite the services being very costly, according to Islam.

Since major expenditure is made in acquiring software from abroad, it leaves hardly any budget for non-core automation.

Also, most organisations do not follow a standard tendering process while buying local software, he added.

The IT entrepreneurs also criticised the tendering process, saying that it gives advantage to foreign firms over local companies.

Bangladeshi financial institutions have a trust issue with the local IT firms, said Hossain Khaled, president of Dhaka Chamber of Commerce and Industry. 

"I have my own bitter experience on this, and I know others have the same," he said, adding that the IT entrepreneurs need to address the issue first.

Local IT firms should increase their partnerships and joint ventures with foreign firms to help build confidence of the banks and financials, said Abdul Matlub Ahmad, president of the Federation of Bangladesh Chambers of Commerce and Industry.

He also criticised the insurance regulator's move to implement uniform software for the whole industry.

"That is not the correct approach. The insurance firms should be allowed to use software of their choice, but the reporting system should be uniform," he added.

The insurance sector is still far from automation, said Farzana Chowdhury, managing director of Green Delta Life Insurance.

"We need to take immediate steps as automation will increase our market penetration. It will also help us to contribute more to the national economy."

The event aims to help local ICT and software companies expand their market and raise the sector's earnings to $5 billion by 2021, said Zunaid Ahmed Palak, state minister for ICT.