Fintech is considered one of Sri Lanka’s fastest growing sectors with immense potential to drive economic development going forward. The Cofounder of PictureWealth and a board member of Peppermint Innovation, Neal Cross believes that the time is right for Sri Lanka to capitalise on fintech and accelerate its adoption.

During a recent LMDtv interview, he explained: “Each country goes through fintech adoption at different speeds. We have highly oversaturated markets such as Singapore and others that are halfway through the journey; and we can see some interesting developments in the Middle East.”

“It’s a global phenomenon that runs at different speeds and each market has a different combination of fintech. Each market also has a different impact and regulatory drivers,” he added.

Cross also noted that “fintech doesn’t necessarily need to disrupt. Almost half of the fintech operators are not there to compete with banks; they’re there to support them. They are tech providers from whom banks can obtain licenses, and add them to their product and customer offerings.”

He observed how Sri Lanka has major advantages and elaborated: “The population is fairly large with about 22 million people, which is not far off the size of Australia’s. And there are many people who aren’t active in the formal finance landscape so there’s a lot of growth to be had.”

The economy being on a promising track is another advantage, and Cross explained that this complements other factors such as the country’s regulatory and legal frameworks.

He explained: “What drives fintech is speed – meaning how fast Sri Lanka wants to go. I remember in the early days in Singapore, it was going incredibly quickly because we had the banks, regulator and universities working together to bring more accelerators into the country.”

Cross continued: “Having key pillars such as accelerators, university engagement, investor funding and corporate collaboration is critical.” And he added that for a country such as Sri Lanka, there are “a lot of upsides since the market is sufficient to cater to a substantial tech industry.”

And he pointed out that Sri Lanka has a good domestic market and larger markets surrounding it, which presents opportunities: “Fintech doesn’t need branches and physical locations; rather, only licenses for new geographies. So there’s an opportunity for a player to enter a market and grow very quickly without having a history or physical presence there – because growth happens through digital distribution.”

Collaboration is important too. Cross believes that this can begin with banks and fintech companies learning to work with each other. He said: “It’s difficult initially because banks are all about rigour, security, scale, professionalism and compliance, whereas fintech is about moving at speed, experimenting and growing quickly.”

This difference isn’t bad because the combination of these two cultures enables banks and fintech companies to learn from each other. In this regard, he noted: “Initially, you do have to be quite forgiving on both sides of the equation because there are differences but also plenty of symbiosis between those businesses.”

Fintech providers in Sri Lanka face several challenges when it comes to adoption and growth.

“There’s always complexity around compliance and regulation,” Cross asserted, adding that another issue is perception: “An acceptance that banking will be very different in five to 10 years is key.”

He continued: “Fintech is the biggest change that many financial organisations will undergo in their history, and the pitfall would be to not treat it with the level of seriousness that’s required, along with funding and focus by the leadership, to make it a successful transformation.”

Driving this change is almost non-negotiable, he noted in conclusion: “This is the time and organisations shouldn’t be slow; this is the time to execute.”