LMDtv 2
Sri Lanka’s banking sector has been reporting robust earnings and profits as the country gradually recovers from its recent economic crisis.
“The banking sector is doing well because the economy is doing well,” Director/CEO of Pan Asia Banking Corporation Naleen Edirisinghe noted, on LMDtv not long ago.
He explained: “Sri Lanka’s GDP is growing at a rate of about five percent, foreign exchange rates are staying constant, the stock market is recording daily gains, remittances are increasing, tourism is booming and exports are growing.”
With the country moving in a positive direction, an equitable economic framework that ensures the needs of all is needed – albeit with realistic objectives.
He noted: “On the retail side, if you look at equitable income, I think it comes through experience and age – you can’t expect a youngster to have the income of a person who is 50 years old.
And Edirisinghe noted that “on the corporate side, large entities will have good incomes but SMEs won’t. This is because corporates would have taken time to earn that income – and similarly, SMEs will take time to become big corporates.”
“Post-crisis Sri Lanka is turning around, and individuals, SMEs and micro enterprises will take some time to grow. The government’s policy should be that everyone needs to earn well so that all can live a good life. And I’m sure that with the banks getting involved to support retailers, SMEs and corporates, there will be equitable income in the coming years,” he opined.
And the needs of these segments also differ from one another.
To this end, he noted: “If we consider the retail segment, customers may need a vehicle, a house or solar power for their homes. SMEs will want to invest more in various segments such as technology and personnel. Corporates may be considering diversifying, importing and exporting, which will need investment.”
“Since there is a lot of economic activity taking place, there’s more demand for finances and financial services, and that’s where banks can support the economy,” Edirisinghe added.
The banking sector is also championing the country’s digitisation agenda.
Edirisinghe explained that the digital drive has two aspects: digitalisation and digitisation: “Digitalisation is where our digital systems improve and digitisation is where our internal processes improve.”
And he highlighted the importance of driving digital payments, asserting that “when it comes to digital, payments are most important so that people can use digital technology to pay for goods and services. For instance, a mobile app makes it easier for customers to transact with a bank.”
As Edirisinghe noted, “the banking sector has a digitalised customer onboarding platform, which enables us to onboard a customer in less than 10 minutes. Previously, it took about 40 minutes to open an account for a customer. All these add value to customer service and make things cost-effective for banks.”
He pointed out that the government too must accelerate and enable digitalisation, adding: “If the government starts digitalising entities, naturally the processes will be faster, more accurate and transparent – and there will be no need for middlemen. And I think as a country, we’re heading that way and that’s the route we need to take.”
To drive digitalisation further, he emphasised that collaboration among banks is also crucial, citing ATMs as an example.
He said: “Many customers think that they have to withdraw their money from ATMs at the banks they deposit with. Yet, the fact is that anyone can go to any ATM and withdraw their money – that’s how the system has been made.
Edirisinghe continued: “So to encourage more cross bank ATM usage, it’s necessary to ensure that the screens are uniform in terms of design so that a customer who visits any bank will see a similar screen.”
“People should be educated on digitalisation so they’re aware of the extreme value it presents,” he urged.
