People’s Bank lights the digital banking torch for Sri Lanka

N Vasantha Kumar on the challenges of digitising Sri Lanka's largest banking branch network

January 3, 2017

Sri Lanka’s People’s Bank has been a key partner in the country’s post-independence journey. But being a bank for the people comes with its challenges. Today’s people are millenials: that means digital, and it means mobile. The bank has taken on the challenge of carrying Sri Lanka’s digital banking torch, with a goal of becoming the most digitalised bank in the country. CEO and MD N Vasantha Kumar, and Deputy General Manager of Banking Support Services B M Premanath explain the roadmap for the strategy, and how changing attitudes – both of staff as well as customers – is the biggest challenge. They also explain the efficiencies and environmental sustainability that going digital will bring, as well as the opportunity to capitalise on the growing foreign direct investment in Sri Lanka’s infrastructure development.

World Finance:  Sri Lanka’s People’s Bank has been a key partner in the country’s post-independence journey. But being a bank for the people comes with its challenges. Today’s people are millenials. That means digital, and it means mobile. Joining me are N Vasantha Kumar and B M Premanath.

You’re working to become the most digitalised bank in Sri Lanka; what’s the current state of the market?

N Vasantha Kumar: At the moment, four million people are using internet banking, and internet banking users are growing annually. But still payments, things like that, are not taking place through internet banking. Very few – about 10 percent, I’d say.

Other banks also, in little areas they’re digital, but we can’t say they’re completely digitalised banks. So certain providers maybe they have internet banking, mobile phone banking, things like that. But that is the reason we at People’s Bank want to have the entire thing digitalised. As a state bank I think it’s our duty and our responsibility to take this into the market.

World Finance: What’s your roadmap for driving this strategy forward?

N Vasantha Kumar: Our roadmap is first changing the mindset of our staff, then the customers. Of course, this is a real challenge. One thing is, our people are used to the brick-and-mortar type of banking. They like to come to the bank to do their transactions. To change that concept, it’s a bit of a difficult thing. And bank staff also, it’s a big leap forward from normal banking.

So we’ve already started changing their attitudes. Then the procedures and the manuals need to be changed.

For younger customers – the up and coming, young generation – I think it will be very easy. But as a state-owned bank, we have a branch network covering the entire country. So in rural areas, for those people it’s much easier to come to a branch and do their transactions. That’s very important for them. So changing their mindset will be the real difficulty.

The roadmap is starting. Already we have started the introduction, the installation of digital banking, will take place early next year. At least five branches will be digitalised.

World Finance: Digitalisation is also going to improve your environmental sustainability, which is increasingly important to you. Tell me about some of the projects you have there.

N Vasantha Kumar: As a state bank, we have a responsibility to the national development programmes. So at this moment, we have embarked on an ambitious programme of green banking. That means to paperless banking and environmentally-friendly, reducing carbon usage. So we have already started Green Pulse and Green Banking.

Green Pulse: we have started sending e-statements. Making minimal usage of paper.

Other environmental things in Green Banking are our buildings. Green Banking takes solar power energy – those types of things we are doing in the Green Bank building concept.

Premanath, where did the new building, where we were going to start the first building of Green Banking?

B M Premanath: We are planning to start that in the Tafta Plant.

N Vasantha Kumar: The Tafta Building. That is our regional office and branch located up north. That is the first building accorded the Green Bank concept.

World Finance: And the digitalisation strategy is also going to position People’s Bank as the go-to bank for international investors?

N Vasantha Kumar: Yes – the government wants to attract more foreign investment, to develop the country. Especially in infrastructure development, IT hubs, tourism. And the government has announced the Colombo Megapolis – they want to make the entire Colombo district one mega city, having an IT hub, a maritime hub, an aviation hub, and also the financial city there.

So the People’s Bank has the largest branch network and is one of the largest state banks, we’ll have a major role to the play in the government’s developments.

Once the market is improving, and as the government ought to have a new financial centre, so in that case People’s Bank will be an active partner. So the entire international banks are mostly digital, so it’ll be a good opportunity to take the lead.

World Finance: Kumar, Premanath, thank you very much.

N Vasantha Kumar: Thank you.