Senarath Bandara, Chief Executive Officer at the youngest bank in Sri Lanka, Cargills Bank, explains how technology and the Cargills Group’s 177-year legacy is helping it transform rural economies, empower people and how people do banking.
Digitalization has transformed the financial services landscape at a rapid pace in recent years. In Sri Lanka, the pandemic has accelerated the digital transformation. How has Cargills Bank embraced this technological evolution in its service offerings?
Cargills Bank began operations in 2014, and as the youngest commercial bank in the country, we incorporated technology into our service offerings from day one. We were born with technological capabilities. Unlike most banks, we did not have to go through any structural shifts from adopting technology and adapting to change. Most banks would describe the digital upheavals taking place as a transformation. In our case, it is a natural evolution. In fact, during the early years of Cargills Bank, we saw our technological capabilities as a comparative advantage over our competitor banks: we had internet banking, a mobile banking app, electronic payment cards, and merchant network, ATM, and digital banking kiosks, and an e-commerce payment solution.
We were the youngest bank to establish an island-wide network on the back of our agency banking operation with Cargills Food City, which counts over 450 outlets, allowing our customers to deposit or withdraw money, transfer funds, and pay utility bills at any Food City checkout counter. Customers also have access to over 4,000 ATMs country-wide via the LankaClear Common ATM Switch.
Our Internet Banking and Mobile Banking services allow customers to manage their existing accounts or card, make fund transfers and utility bill payments, open savings accounts and fixed deposits, apply for a credit card, and many more services. We will soon introduce non-face-to-face digital onboarding of savings account customers, thereby giving new customers the convenience of opening an account with Cargills Bank without having to visit a Branch.
The bank plays an active role in developing the digital payments space in Sri Lanka, providing solutions for fintechs, e-commerce and merchants to accept cashless payments. We connect our fintech partners to the JustPay and LankaQR platforms to facilitate cashless payments, allow merchants to accept Card and LankaQR transactions, and also provide Internet Payment Gateway (IPG) solutions to facilitate e-commerce transactions in Sri Lanka.
We have also invested in our cyber security framework to protect the bank and customer data and privacy so that customers can avail themselves of these services with confidence.
How are you maintaining an edge in an overcrowded market?
Many feel that the Sri Lankan banking industry is quite saturated with the number of banks. There are 25 licensed commercial banks for our economy, and any new entrant naturally faces intense competition from the get-go.
As I elaborated previously, technology has been critical to how we differentiate ourselves in terms of service delivery and cost of service delivery. We are now reaching customers in all parts of the country and expanding our reach at a low cost. In many markets, physical branches are becoming less viable as consumer preference shifts towards digital solutions. We have also deployed technology to automate processes for efficiency gains, cost savings, and improved customer service experiences.
There is another aspect unique to Cargills Bank that gives us an edge – the Cargills group, which has built a robust ecosystem serving and uplifting local farmers, small & medium-sized businesses, and customers. Cargills Bank is an extension of the mission and purpose of the group, which is why we are focusing on agriculture & dairy, small & medium businesses, and retail customers. The farm-to-home model of the Cargills group provides us robust growth opportunities in terms of financing and promoting banking services among these stakeholders.
What is the outlook for the banking sector, especially with the unfolding pandemic?
It is a challenging period world over for any business and industry, including banking. However, every challenge creates an opportunity, and this is true for anyone or any business. The government and Central Bank introduced credit relief schemes and a moratorium to keep businesses afloat and help them to tide over this difficult period, as their cash flows have been affected. As a responsible bank, we responded to client needs and gave them every assistance to survive and emerge out of this situation stronger.
One positive outcome has been the gravitation towards digital technology. Consumers are increasingly using banking apps and digital wallets. In response, banks have also started to invest more in digital banking and new channels to reach out to customers. Banks are also developing capabilities to carry out their operations off-site and staff working from home. Bankers connect to their systems online, approve loans and make other decisions from home, all while ensuring compliance with the strict operational and regulatory guidelines in place. Before Covid, few bankers would have ever imagined working from home would be possible. This pandemic has resulted in a change in thinking. Although banks and businesses invested heavily in technology, from the customer end, the conversion was slow. Now they are taking it up and driving the pace of transformation.
How is AI impacting and transforming your business model?
Digital technology, artificial intelligence, robotic process automation, machine learning, and others are rapidly being adopted in the business world. The Banking and Finance sector has also commenced the journey to adopt these technologies.
We have begun to introduce robotic process automation and AI technology to repetitive tasks and specific processes to speed up transaction times, lower errors, keep costs to a minimum, and detect fraud. These technologies will be a part of our everyday infrastructure capabilities in the time to come.
What other product innovations are on the horizon—and what will this mean for your customers?
Customer needs and expectations drive our approach to banking innovation and technology investments. Digital transformation is not on the agenda for its own sake but because we are trying to make a difference to our customers. We believe physical locations will remain relevant to engage and serve many people who are not so techsavvy. However, expectations of customers are changing, and we are developing products and services that will appeal to the tech-savvy younger generation, which will facilitate the growth of digital banking.
We will enable customers to open accounts from home without visiting our branches by linking with the national identity cards database at the Department for Registration of Persons and introducing video KYC capabilities. We will also introduce digital lending products so that customers can speedily and conveniently meet their financial needs. We plan to open service points at selected Cargills Food City outlets enabling customers to open accounts instantly without visiting a branch or going online. This way, whether you are tech-savvy or not, we can still greatly enhance the experience and convenience of banking for everyone.
What is your vision for the future of the bank?
Our vision is to harness the spirit of the enterprising people of this country. We will do that by focusing on developing rural, agriculture-based communities and SMEs all over the country. We have field officers who have built strong relationships with farmers and SME entrepreneurs. As a group, we look beyond just their financial needs and provide them with market information, technical expertise, training, and the necessary tools to improve productivity and resilience to climate change. With Cargills supermarkets and our e-commerce solutions, we also give them a marketplace to sell their goods. During the pandemic, we provided concessionary lending facilities and payment terms to affected farmers and SMEs. We aspire to grow along with them, and in doing so, the growth opportunities are tremendous for Cargills Bank. We are fortunate to have access to the Cargills ecosystem and capable and experienced teams, who are agile, resilient, and committed to making this vision a reality.