Starting from the 90s, you are considered one of the pioneers of the Bangladeshi software industry; how have you seen the sector evolve over the years?
When BASIS was formed in 1997, we had difficulty in having enough software and information processing firms to form an association! With just 17 members to start the association, we certainly had a humble beginning. Since then, we have come a long way, but we still have a long journey ahead.
In the early days, the government universities were churning out only around 100-150 computer science and software engineering graduates per year. To make things worse, most of these students were eyeing to leave the country for better opportunities abroad. Private sector universities were not offering Computer Science degrees, and so we had immense difficulty in expanding while keeping the quality of our products and services.
It took a lot of courage and determination to convince the government of the time that the ICT Industry was the industry of the future. Tax holidays and exemptions, along with the duty-free import of hardware by successive governments, were undoubtedly beneficial for entrepreneurs who had to fund everything from their resources. Funding has always been a massive problem from the very beginning, and it continues to be so even now.
In 1995-2000, a small number of government sector corporations, the stock exchanges and their brokers, and some private sector banks were the first buyers of software and information processing services. Later on, we saw some retailers and microfinance institutions, also showing interest in automation. At Southtech, we had customers in the Dhaka Stock Exchange and several NGOs and retailers.
I remember that the automation of the Chittagong Port began during the time of the Caretaker Government. Still, the real change started almost ten years ago when the Government of Prime Minister Sheikh Hasina took a genuine interest in developing this sector. The vision of a digital economy was meant to transform the operations of the bureaucracy as well as the private sector in general. However, I must admit that it is taking much longer than expected to transform the bureaucracy as there still remains many roadblocks. The reluctance to reengineer their operational processes that would improve efficiency dramatically and fear of losing control is the primary roadblock. I see very few people, both in the private and government sectors calculating the overall cost of owning their existing processes versus the savings they would make by reengineering their processes and procedures.
Establishing hi-tech parks around the country is also an excellent initiative but building easy access to amenities such as schools, hospitals, shops, etc. and easy commute to these facilities will make things much more vibrant for the IT Industry.
I see a lot of potential for the Bangladeshi IT industry. We are currently exporting around a billion dollars’ worth of software and information services a year. Besides, we are selling around half a billion dollars’ worth of software and information services to the local economy. We are now planning to grow our export and domestic markets by 100% and 150% respectively in the next two years. I firmly believe that we are still tiny compared to what we can be, and therefore I hope that BASIS and the Government shall continue to brand Bangladesh both locally and in world forums aggressively.
Southtech Ascend was one of the winners at the BASIS National ICT Awards 2019, what do you think this achievement will add to your portfolio?
Awards are amazing because they give us an external recognition for the hard and smart work we have put in to make Ascend Financials. It has a unique modular architecture that caters to a wide range of financial institutions: financial cooperatives, microfinance institutions, micro-insurance institutions, non-banking financial institutions, leasing companies, and banks.
So it was incredible to win BASIS National ICT Award 2019 for Ascend Financials. It was not achieved overnight; the team has been working on this product for almost five years.
The product is built for the cloud, and so we can reach out to clients in far-flung countries to offer this solution from our Tier-3 data centres or any other commercial cloud service vendor such as Azure or AWS.
I firmly believe that once you have a killer product, you are likely to get recognized both nationally and internationally. We, therefore, expect many more awards coming our way in the future.
What are the significant challenges faced by the sector that might impede prospects?
There are several significant challenges. Number one is quality education. Our graduates need plenty of training before they can be assigned to formal work. Their communication skills and critical thinking capabilities need significant improvement.
Concerning export, the reluctance of Bangladesh Bank to allow local companies to invest in overseas offices to generate more incoming orders is mind-boggling. We are not asking for government funding – our investment would be made from our dollar earnings!
Funding is another bottleneck. The bureaucracy surrounding equity investments by the government is so complicated that one would have to give up software development and devote all one’s time to get funding! The private funding is also too small, often not exceeding USD 50,000.
Inflexibility to reengineer processes to improve things is another huge bottleneck, especially in the public sector. Some government officials are reluctant to give up their manual processes. They can be reengineered to make them more friendly and efficient.
As a growing economy, how crucial is it for Bangladesh to adopt and facilitate FinTech at a fast pace?
Adoption of Financial Technology is critical for the potential exponential growth of our economy. Most of our population is still not within the realms of FinTech. Our people are hard-working and have the potential to do incredible work if given the right opportunities. To mobilize this vast human capital, we need contemporary mechanisms that allow people to participate in online marketplaces and exchange goods and services against digital money efficiently and fairly. FinTechs, therefore, have a huge role to play in the growth of our economy.
How is Southtech adding to the FinTech momentum in Bangladesh?
We are keen on becoming the pioneers of FinTech revolution in Bangladesh. With our financial software and related services to the microfinance institutions, our clients managed to reach out to their clients even 20 years ago. With the advent of the likes of bKash, Rocket and Nogod, our financial technology makes it easier for our clients to do business faster and better. Currently, our financial solutions process more than 122 million transactions per month. Ascend Financials, our next generation financial product, has many delivery channels, and we expect that we shall gain a significant share of the market in the future.
Do you have any advice for aspiring tech entrepreneurs of our country?
Yes, focus on an area that you are truly good at. Don’t be a follower and try to be a leader with a unique product or service. You will have a much better chance of success by adopting this policy. Never give up; always find a way to succeed.
What is your vision for Southtech Group in a decade?
We aspire to be a household name within Bangladesh through maintaining a culture of smart innovations aimed at our clients’. Internationally, we wish to compete with the very best in our chosen fields of business, offering unique solutions to our clients and win their trust.