Leading Core Banking and Insurance Solution Provider Expanded to 33 Countries

Interview with Joe Faddoul, Chairman of BML Istisharat

It is a pleasure to be here today and thank you for having Marcopolis in to talk a little bit about BML, its history in short but more so: where it is in 2014 and where it is going. Tell the average reader a little bit about BML, what its current services and solutions are and also a little bit about your current client base.

BML Istisharat is a provider of core applications for banks, insurance companies and small and medium manufacturing and distribution firms. We have been doing this for the last 42 years. Our client base includes Fortune 500 names like Citibank, Société Générale, Banque Populaire, Swiss Life, Gazprombank etc. The core banking software solutions is up and running in 33 countries spanning from the US, to Europe, Africa, the Middle East and recently South East Asia. BML Istisharat is also a leading provider of core banking and insurance software and among the top 40 providers globally. 

Tell us about core banking solution, software and applications and what it is for the average non technology specialist.

Well, a core banking system, solution, application or software mainly covers the basic functions of a bank like opening an account, interest calculation, trade finance, foreign exchange, money market, capital markets etc. as opposed to peripheral systems like customer relationship management, electronic document handling etc.

What sort of new core banking solution, application and software can we expect from BML over the next few years?

Well, from a technical point of view, we just completed the addition of a Java layer to the core banking and insurance systems. This layer allows us to be database independent and uses less bandwidth, which is great for a bank that has a network of branches. From a functionality point of view, we are adding new functions to our core Islamic banking application and insurance solutions, as well as to the industrial and manufacturing systems.

You are expanding into the different types of banking in the region as well. Tell us about your international relationships, you said you work in 33 countries. Let´s begin with MENA and your top clients.

Well, we have clients like the Commercial Bank of Kuwait, the Bank of Jordan, Cairo Amman Bank in Jordan, Societé Générale in Lebanon, Jordan and Cyprus, Gazprombank in Lebanon. These clients are fortune 500 companies using the core banking and core insurance solution. 

Do you have any relationships in the KSA?

Yes. In the whole region, we are providing the core insurance solution to an insurance company — AXA, which is a major French and European insurer. They are using both of the core systems for both life and non-life insurance in seven or eight MENA countries.

Do you also do risk hedging for your companies and banker´s insurance?

Yes. Since we are selling both core insurance solution and core banking application, we developed a banker´s insurance solution, and as regulation takes place in our markets, we are implementing this banker’s insurance solution. We have already implemented it in both Lebanon and Saudi Arabia. The solution allows to integrate the core banking and insurance solution into one. 

Tell us a bit more about banker´s insurance and what a client gets in terms of return on their investments.

The main issue with a bank selling insurance with two different systems is, you have to duplicate all the transactions; the transactions must be captured at the bank level and at the insurance level. Since we are providing both core banking and core insurance solutions, we have seamlessly interfaced the banking functions with the insurance functions. That means that the person capturing the transaction at the counter level in the bank has to capture it only once, and it will impact both the banking system and the insurance company system.  Furthermore, it will automate everything that follows i.e. the monthly payments, commissions, reinsurances etc.

You have worked through some difficult periods domestically and certainly your market is a challenging one. Encapsulate in short your management philosophy and how you handle challenging business environments whether they are challenging in terms of politics, regulations or security. You are dealing in some interesting areas like Iraq etc.

Firstly, when there was a war in Lebanon there was also an opportunity. The war obliged us to look at export markets. In the sense that when the local currency dwindled and we were not able to pay our colleagues in dollars, we had to begin to earn dollars to be able to pay them and, therefore, we had to export. This was the beginning of our export drive. Nowadays, exports represent about 85% of our core banking and core insurance applications.

In Iraqm of course, there are some security challenges, particularly in Bagdad, but we work with 8 out of the 32 banks operating in Iraq, including the Central Bank, to computerize their systems. We have client banks in Bagdad, Basra and Erbil that are using our core banking solution. Business is going quite well.

Other security challenges obliged us to be present on different development sites. Therefore,  if one development site is compromised by events and cannot work, then it is ok because we are also working somewhere else.

Now when the situation is normal, we find it very easy to abide by deadlines and things like that!

Would you say that after the war years here, you have probably seen and done it all?

In the war years, we produced our own electricity like everybody else in Lebanon. When there was no more fuel for our generators, we dug a dump in a nearby tract of land and had our fuel in that dump. When the neighbours were annoyed by our generators, we installed solar cells on our roof. When there were no more telephone lines to Europe, we installed a satellite dish, and I’m talking 25 years ago!

You are a true survivor!

At that time, the organisation that was installing the dishes were only installing them on ships, so we registered a ship in Belgium, and nobody cared to check if there was a ship in Beirut because of the war. We were registered under the name of MV Motor Vessel Istisharat in Belgium and we were able to communicate with our clients in Europe. So now, everything seems very easy!

How do you handle the fiscal challenges of the last few years? How is the outlook for the core banking and insurance application market?

Well, when the crisis happened in Europe, we mitigated it with our markets in the Middle East where the crisis was being felt a little less. The thing to remember is that the financial crisis did not happen at the same time all over the world. So between the Far East, the Middle East and Europe, we mitigated the crisis, so we did’ feel it too much. The other thing is that when you sell core banking and insurance applications, you are’ selling a luxury product, a bank needs a core banking software solution crisis or no crisis. It is not a gimmick or a gadget or something like that.

Finally, for the BML Group going forward into the fiscal 2014 period and say for the next 3 to 5 years, what is your growth strategy, your targets and your business plan going forward?

We want to push the advantage that we have in South East Asia. We hope to have our first client in Indonesia this year, after our client in Malaysia. We are also looking very carefully at some niche markets that we just recently discovered as we were asked to perform some demonstrations there. I would mention the Baltic countries and Sweden. I know that it might be surprising for us to be selling in Sweden and the Baltic countries, but since they are asking for core banking and insurance solution products,  we are going to follow up on those opportunities.

During the demo of your product that you use with prospective clients what does it show them?

Basically, we show a PowerPoint presentation to them and then if they want to see more, we go on to the second step and show them a demo walk through. We send one representative and he shows them the full system and he performs some typical operations to show them how it works.

BML Istisharat is a leading provider of core banking solutions, core insurance solutions and core systems for industrial and manufacturing SMEs.