Majority of the banks in Bangladesh have turned to foreign IT firms for software to run their online banking operation.
This is because the quality of local software has declined over the years, sources in the central bank said on Thursday. High quality software is essential for providing smooth and faster banking service to clients. It ensures safe transaction and checks fraudulence and forgery.
Local software used to cover 100 per cent banking operation in the country till the mid-1990s, but these had not been upgraded by local companies to match the rising demand of the banking sector.
"In terms of the current volume of software trade in the banking sector, the dominance of local software has declined to less than 50 per cent. Over 50 per cent are being covered by foreign IT firms and dependence on foreign software is on the rise," said an IT official of the central bank.
Local software is sub-standard in terms of quality.
Nearly 20 banks have introduced online banking and mobile banking services. These banks require high quality software to run their daily operation.
Majority of these banks have hired software from foreign IT firms as their managements could not find any local software fit for their requirement.
He said foreign IT firms, such as Tamenos, Iflex (Oracle), Infosis, Polaris and Mysis, have been dominating the country's banking sector. Only three local firms - Lead Computers, Flora Systems and BEXIMCO Computers - have been providing quality software to some five or six banks across the country.
He said local software like Bexibank, a product of BEXIMCO Computers, had covered 100 per cent banking operations till the 1990s. But now other software are  being used.
Talking to The Independent, Tapan Kanti Sarkar, president of the Chief Technology Officers' Forum of Banks in Bangladesh, said the IT sector requires huge investments to produce efficient and quality software. "But big investors in Bangladesh do not usually lay emphasis on the IT sector," he rued.
There is no alternative to safe software for providing efficient service in mobile banking and online banking. "Improving the quality of local software is a must. Otherwise, it will not be possible to check foreign companies from monopolising the software trade in Bangladesh," he added.
Mahboob Zaman, president of the Bangladesh Association of Software and Information Services (BASIS), said banks are not keen to finance the IT sector.
"Funds are the most challenging factor for the IT industry. The government and industry leaders together must address the issue," he opined.

News: The Independent / Bangladesh/ Aug-19-2011