Mustafa Rafiqul Islam attained B. Sc. and M. Sc. in Computer Science from Purdue University, USA. He served GE Capital, California and Computerland, USA. Since 1997, Mustafa is running countries leading IT infrastructure and software companies Flora Telecom and Flora Systems. In Flora Systems, Mustafa developed renowned Core Banking Application software “Flora Bank” which is being used in more than 1000 branches of nine banks such as Krishi Bank, Mutual Trust, NCCBL, Trust Bank etc. Mustafa served BASIS for two terms, firstly as the Treasurer and then as the Secretary General. Under his leadership the Countries first Software Incubator was established and he was also the first Convener of BASIS SOFTEXPO.
Mustafa Rafiqul Islam, popularly known as Duke has a tendency to walk the path that is less travelled. When asked why, he simply said that there is more glory in walking in that ‘path’.
Glory however is not the ‘thing’ that he always look for, rather he loves to work as a ‘behind the scene person’. As a computer science graduate from the world renowned Purdue University of US, he is one of the few IT entrepreneurs of the country who actually understand what happens inside the world of bits and bytes, not just the block diagrams. Pun intended.
Fintech recently sat with this amicable yet strangely reclusive entrepreneur and talk about his life and his dream project-Florabank.
FINTECH: Flora Limited has become one of the most reputed organizations in the tech world of Bangladesh. Can you shed some light on the journey of Flora Limited?
MRI Duke: Flora Limited started its journey back in 1972, right after the independence of Bangladesh. Its name was Flora Enterprise then. My father-Mohammad Nurul Islam who was a senior banker- founded the company. He worked as a General Manager in Agrani Bank as well as in the State Bank of India. After the independence of the country, he thought of leaving his job and starting a business of his own because he wanted to take part in building the new economy of a new country. So in March, 1972, he formed Flora Limited.
Entrepreneurship was in fact in our family blood. My grandfather used to do business in Yangon (Rengun-formerly the capital of Myanmar). He used to spend six months in Yangon and the rest of the six months in Satkania, Chittagongour homeland. The people of Chittagong are naturally entrepreneurship
minded. My father started his business without any significant capital. He however had a vision to introduce tech machineries in a newly independent nation.
He introduced the first Bangla typewriter in the country. He also introduced digital calculators in the market. In the mid 70’s, he also introduced the Canon copiers in Bangladesh. Since then, Flora has exclusive dealership of Canon in Bangladesh.
My father was a voracious reader and he used to study a lot about the IT business in different foreign magazines. After reading few articles in some of those magazines, he got very enthusiastic and excited about computers. In 1982, Radio Shack entered into Bangladesh and Candy Computers started the promotional activities for it. Radio Shack is one of US’s large chains of wireless and electronics stores. Mr Shafqat Haider of Candy Computers one day came to my father and asked him whether my father was interested in doing business in partnership with him. Shafqat Haider was one of the first generation computer businessmen in Bangladesh. He and his partner Mr Al Amin came back to Bangladesh from US after studying and started the computer business. My father however declined their offer. He was very enthusiastic about computer business but he wanted to do it alone.
FINTECH: How did you get involved with your father’s business?
MRI Duke: In 1983, I passed my SSC examination from Saint Joseph High School. At that time, my father told me that there had been a basic computer training going on in Science Laboratory and he asked me to participate in that training. I joined the training classes. Two students from BUET also were in the class with me. After the training, I sat for the exam and I got 99 out of 100 in it. I learned a lot about computers from that training and my interest to study computer science was born because of that training.
I then studied in Dhaka College and passed the HSC exam in 1986. After passing the HSC, I went to US and studied computer engineering in Purdue University. I completed my bachelors and masters from there. Purdue was the first university in the US to start the computer science department. It got a million dollar sanction from the National Science Foundation in US to start the department. My specialization was on HTML which just started back at that time. I also had particular interest in operating system. I wrote a programming language and I named it “B”.
I was inspired by Professor Douglas Comer. He is a world renowned Professor who works extensively in developing TCP/IP protocol. He wrote a book on TCP/IP protocol which is considered as the bible for TCP/IP. He developed an operating system called Xinu which is like Unix spelled backwards. He developed that system for educational use at Purdue University in the 1980s. I used to work in his Xinu lab.
While visiting Bangladesh during breaks in my University years, I used to do interns in Flora. During one of such breaks, I found that Compaq sent a letter to Flora that they wanted to give exclusive distributorship in Bangladesh to us. My father didn’t even open the letter. While doing my masters in Purdue, I worked in Computer Line-which was at that time one of most renowned computer franchises across the US. I used to sell computers for them. So, I knew what Compaq was and I knew that it was increasingly becoming popular in the US. In fact, they launched the first notebook at that time after IBM.
I told my father that it was a gold mine and I immediately suggested him to opt for the dealership. I sent them a letter letting them know about our interest for being the exclusive dealer of Compaq in Bangladesh. I went back to US after wards. One day my father phoned me and told me that Compaq had replied and Flora got the dealership for Compaq.
I came back to Bangladesh in August, 1993. Back in the US, I got a high-salaried job in General Electric (GE) capital and I worked there for some times. But I opted for going back to Bangladesh because of several reasons. First of all- my father was getting old and he asked me to come back to the country and to take charge of the computer business of Flora. Secondly-as I said earlier that entrepreneurship is in our blood, so I wanted to do business instead of doing salaried jobs. Flora was also growing fast at that time. It also got the exclusive dealership of Epson by the time I returned.
FINTECH: What was the state of computer business when you returned back in Bangladesh?
MRI Duke: At the time when I came back to Bangladesh in 1993, personal computer started gaining popularity among the business entities in the country. In each month, Flora used to sell 3-4 computers. Computers used to cost more than Tk 1 lakh at that time and by selling one, there used to be a profit margin of Tk 30,000. The popularity of personal computer however was still confined within business entities-primarily because of its high price tag.
In 1993, the first election of Bangladesh Computer Samity (BCS) was held. Mostafa Jabbar became the first president of the committee. My father was an executive member of that committee. BCS did a lot to popularize personal computing in Bangladesh.
FINTECH: When did the idea of designing and developing banking software came to your mind and how did Florabank start its journey?
MRI Duke: In and around 1991, while I was in the US, my father once called me and asked me to write banking software for him. Since he was a banker, that idea came to his mind. Besides, the foreign banks which were operating in Bangladesh were using software in their banks. So he thought of creating software for the local banks. I told him that writing such large scale software would be a massive task for an individual. I of course couldn’t do that at that time but the idea of developing banking software was stuck in my mind since then.
So, in 1997, after having four years of experience in running our old hardware and computer machineries business of Flora Limited, I first formed a software company named Flora System. At first, we didn’t develop any banking software in that company. In fact, at that time, very few companies used to develop branch banking software. There was a company called ‘Ease Computers’. They developed banking software. The market leader was Beximco Computers and they used to provide bexibank software to a number of banks. But that software was a branch banking software, not core banking software (CBS) though.
So what happened, Ease Computer took the task of developing branch banking software for a branch of Janata bank but they couldn’t deliver it. When we learned about that, my personal secretary who had an IT background told me that we could develop that software. I told him that it would take two to three years but he insisted on developing that. So we approached Janata bank and when we got that project, we started developing the banking software.
It took us three years to develop it. We first successfully deployed the software in Nawabpur branch of Janata Bank.
In 1997, another memorable incident happened in my life. Bill Gates came to India for the first time. Flora was the distributor of Microsoft in Bangladesh. I was invited to attend in a dealership meeting with Bill Gates in India. Only 20 distributors in India and two from Bangladesh got the invitation to join in the meeting with Bill Gates. The meeting was held in Oberoi Hotel in Mumbai. I remember it was big news at that time. All the Indian newspapers made leads about Bill Gates’s India visit. The Filipino President Fardinand Ramos arrived in India in a state visit on the same day but that news went inside while Bill Gate’s news got the front page.
Each one of us (the Microsoft distributors) in the room got to ask him one question. I asked him “What will happen to SQL server in future?” I asked him that question because I was thinking of investing heavily on developing banking software. Whether I should use oracle or SQL for the database of our banking software was my concern. He replied, “Whatever happens with the case of Windows server and Novell, expect that to happen between SQL server and Oracle.”
His quote was very significant because with that he envisaged a future. Novell Network was the largest networking tool and it had almost a monopoly in the market in the 80’s and 90’s and toppling that was unthinkable. They were the king in LAN operating system software. No networking was done without Novell software. But Windows server was slowly doing that. In the same manner, Oracle was and had been the leading database software for decades. Howevere Bill Gates believed that one day SQL server would be able to surpass the Oracle.
And it happened 19 years after he said so. In January 2016, Oracle became the number two database product in the world. SQL server became number one.
FINTECH: What were the impediments that you faced when you start developing Florabank CBS?
MRI Duke: At that time, there were hardly any Computer Science majors in Bangladesh. So finding adept manpower was the toughest challenge in front of us. So I first started scouting for proper manpower.
Tapan Kumar Sarkar (the founder and incumbent president of CTO Forum) was the IT head of Beximco Pharma. I brought him here as the DMD of Flora System. We both went to India after getting necessary approval from Board of Investment (BOI) and brought 15 programmers from there. I took an office at the 14th floor of Adamji Court (now the head office of Prime Bank). It was a 7,000 square feet office. I also took 14-15 local people-mostly from applied physics background.
I brought some consultants from Microsoft to provide us training for SQL server. I also arranged a boot camp in Hotel Purbani in where those consultants from Microsoft provided training. A total of 500 people got training in SQL server management. There were five batches-each having 100 people. We brought those trainers from India. During that time, people had no idea about client server. My product was the first client-server product in the country.
I had the vision to create the product which could sustain serious banking load including real-time online banking. Those consultants from Microsoft helped us to design and build the foundation of our banking software. Once the foundation was done, we started building on it.
Soon, we started getting orders from the banks including Janata Bank, Agrani Bank and Krishi Bank. The private commercial banks also start taking branch banking software from us. We got order from Mutual Trust Bank (MTB) and Jamuna Bank in the early 2000.
Later in 2002, Syed Manzur Elahi, the founder Chairman of MTB called and told me that he wanted to connect all of the branches of MTB. He asked me whether I could design and implement online banking for MTB. I said ‘yes’ and I asked for three months of time. During that time, there was no local commercial bank with online banking facility. The facility was available in multinational banks like Standard Chartered Bank and ANZ Grindlays Bank. This was because for doing online banking, the bank needed modern CBS which would cost them around Tk 7-8 crore. The price tag was obviously very high for the local commercial banks.
MTB however wanted to do that and they gave us the mantle for doing so. So it was the first bank to trust a local company for doing online banking software for them. When others bank 
including Trust Bank and Jamuna Bank heard about that, they also came to us to implement the same service for them.
You have to understand that creating platform for online banking was not an easy task back then. There was no broadband or mobile internet. We used dial-up connection. I had previous experience of implementing online platform for banks though. In 1998, I first crated online platform for ANZ Grindlays bank. I first brought CISCO router for doing that. CISCO was not even in India then, we had to talk and negotiate directly with the original company to bring it in Bangladesh with the help of ‘Data Trust’ of Hong Kong which was the regional distributor of Cisco in this part of the world. I send some of my employees to Singapore to get training on operating CISCO. So there were trained professionals in our company.
We have been able to successfully implement online banking platform for MTB and subsequently for Trust Bank and Jamuna Bank.
After those successes, Krishi Bank wanted us to implement the online banking platform for them as well. They had more than 1000 branches and bringing those all under network was a tough task then. So, we proposed to start our work with 40 branches in 2009. They were reluctant at first but we successfully implement our task in three months. Now we are doing it for its rest of the 950+ branches. We have already implemented it in more than 250 branches. Upon completion, it would become the largest bank with which run local software on local online banking platform.
FINTECH: Florabank has recently replaced Temenos CBS in South Bangla Agricultural and Commerce Bank (SBAC) recently. It has become a banking folklore. How did it happen?
MRI Duke: Yes, the replacement of Temenos in SBAC was a milestone in our history of Florabank. It happened when the SBAC Head of IT Mr Mizanur Rahman came to us with the proposal of replacing Temenos-which it was using as its CBS- with Florabank software. We jumped on the board as we got the chance to replace the world’s number one CBS with our product. Replacing a CBS of a running commercial bank was a mammoth and monumental task but we all had the confidence to do. Within nine days, we successfully completed that unthinkable task of replacing the Temenos CBS with Florabank CBS.
I think we had been able to succeed because we had honed our skills in digital data migration in tremendous manner over the years. When we were working on the projects of state owned banks like Janata Bank, Agrani Bank and Krishi Bank, we found that a huge chunk of those bank’s data was stored in manual ledger. We transform those data into digital format. In doing so, sometime around 300 officials from my company used to work simultaneously in different parts of the country.
We just didn’t perform the data migration for banks rather we did the transaction on behalf of them for the first three months. In the meantime, we used to train their officials. So, one of our core competencies was not just writing software rather the migration of data and that gave us the necessary confidence to replace Temenos.
Besides, we had our familiarities with Temenos. There are some complex reporting forms for Bangladesh Bank (CL1-CL5 and SBS1-SBS5). It took us around two to three years to develop those reporting provision in our software. Temenos didn’t have any familiarity with those reporting. This was because; those reports were country specific report. Temenos asked us do those reporting for them in the banks where their CBS are being used. So, in doing so, we attained our familiarities with the ins and outs of Temenos. In fact, we have over 30 Temenos specialists in Florabank.
FINTECH: What are the characteristics that define Florabank CBS? Is it capable of competing with the foreign CBS?.
MRI Duke: It has been over 13 years since we have started working with our Florabnak software. In this long period, we have deployed it in 1000 branches in nine premier banks throughout the country and they are all running the software without any problem. If any problem occurs, our support teams are there immediately to provide real-time solution. I think this maintenance and support is our key-selling point against the foreign software because none of the foreign vendors has the maintenance and support system that we have.
I think the customer centric state of mind and innovative on-going business analysis for new and up-coming banking products are the core strength of FB’s Success. Besides, we always have been improving our system with new additions. For example, I have a team of specialists who analyze other CBS and their functionalities. Then we apply reverse engineering on those functionalities and implement those in our CBS.
On the whole, I would say Florabank CBS is an on-line, real time, centralized core banking software which is providing the solution of corporate banking, retail banking as well as Islamic banking product. It provides a complete integrated, highly secured and scalable database, data warehousing, data mining, and data encryption with high performance.
Our Florababk CBS also has a strong product configuration capability to launch innovative product such as deposit and loan product and SME loan product if required. Customers Information System, customer deposit, loans and advance, Islamic banking product, bills and remittance, treasury, trade finance, general ledger, KYC for anti-money laundering and credit monitoring system (centralized limit).
FINTECH: Is it difficult in our country for other companies to develop CBS? Why we don’t see more companies developing large scale software like this?
Most software companies of our country are suffering from lack of employee retention. I don’t know if there is any formal study about the state of employee retention in Bangladesh’s IT sector or not, but I can tell you that the software and IT sector has the lowest rate of employee retention. Most of the software engineers and programmers switch to other company in every two or three years. But developing a CBS takes four to five years, so if a programmer working in a CBS project leave the company after one or two year, then that creates a problem for the project.
Since I am a programmer, I know how programmer thinks. I know what they want and what do I need to give them so that they won’t leave my company. You see, programmers are a whole different breed. They don’t just work for money. As a boss, if you don’t know their language, their jargons and the way they think, you will fail to earn their admiration. This is like an intellectual game and you have to be a proven leader to garner respect. I have that confidence and ability in myself to earn that respect and thus I was being able to indulge in developing large scale project like developing CBS.
Besides, there are obvious problem of finding able manpower at the first place. The best programmers are obviously from BUET but they tend to leave the country immediately after they complete their undergraduate studies. The next best sets of programmers come from SUST, DU AUST and NSU. We employ those programmers and hone their programming skills with our own training systems.
FINTECH: In the banking industry of Bangladesh, there is a common notion that the boards-which are still mostly comprised of people with old school thought-don’t want to invest in IT? Do you think it is changing?
MRI Duke: I believe it is changing. As a bank, if you don’t invest in IT now, you will be left out in the Stone Age. All the banks now have CBS to run their operations because they realize at some point that without giving customer real time faster digitized service, they will lose their customers. However digitization doesn’t only mean having CBS, rather it is about customer onboarding, loan profiting and apprising of loan-all in digital manner. In a bid to do those, you have to digitalize the whole engine. The fact is, in future, no banker will work in any real branches. Because a physical branch of banking is all about a big expenditure.
