Enabling a digital future

Sanath Manatunge, Chief Operating Officer/Executive Director

Commercial Bank of Ceylon is investing in digital tech, AI and robotics to build banking solutions for everyone, and enable a digital economy.

For Sanath Manatunge, Chief Operating Officer/Executive Director at Commercial Bank of Ceylon, the largest private bank in Sri Lanka, investing in technology is a deliberate exercise. The Bank is investing considerably to propel itself to the digital age of banking, but recognises the need to put customers first, building digital banking products and services that fulfil diverse customer expectations, needs and a diverse range of digital literacy. The ultimate goal is to uplift customers’ digital uptake and enable a digital economy. Manatunge discusses the Bank’s long term digital strategy and the factors shaping the future of the industry post Covid-19.

As the country’s largest private sector bank, how is Commercial Bank contributing to the digitalization of not just Sri Lanka’s financial sector, but the economy as well?

With around 3.5 million customers and over 900 automated points, the Bank is poised to create a significant difference in the way banking is done. Commercial Bank’s approach to digitalization has always been based on the significance of its usage to our customers: what matters to us is that our customers experience the utmost convenience.

Commercial Bank employs various digital strategies to engage our customers that go beyond just business transactions. Whilst we embark on new digital journeys that create utmost convenience to the customers through products such as online banking, mobile banking, Flash Digital Banking Account, Q+ , QR code based payment app, automated banking centres, digital experience zones, ePassbook and digital banking accounts, our social media platforms and other digital platforms aim to engage customers through appealing content.

Our focus is not only on the retail customers: we have various digital solutions for our corporate and SME customers as well. Paymaster, our business payment platform, allows users to affect a multitude of payments such as salaries, bonuses, building rent, utility payments, statutory payments such as EPF and ETF, and customs payments at a click of a button. In the cards business, merchants are empowered with sophisticated digital payment methods such as QR code enabled payments, easy POS solutions for smalltime businesses, and facilitating web integration. In short, we need to digitally empower customers in different ways with a varying degree of sophistication.

We do not believe in a one-size-fits-all digital strategy. A developing market like ours comprises people at varied stages of digital literacy and organizations have to identify them and serve every one of them in a way that their needs are fulfilled through digitization.

This is where we believe in assisted automation and basic automation through the use of machines. Before you get customers, who are not so digital-savvy to take the plunge into digital banking, you need to get them familiar with the concept of automated machines and also assisted automation where our staff assist customers to use machines for day to day banking.

While we target the urban digital-savvy customers for our fully-digital banking products and services, we believe this approach allows us to groom and gear the suburban and less digital-savvy customers to be empowered by digital banking as well.

How important is innovation to Commercial Bank, and what is your strategy with digital tech?

Innovation is especially important to Commercial Bank and woven into both our vision and mission statements. As a leading bank in Sri Lanka, we believe that innovation drives the world forward and we want to be a force that propels our people and local businesses by enabling a digital banking and payments system on par with global standards.

In this context, the Bank has a long term strategic plan that we have been working on for several years now related to our digital portfolio and digital roadmap. We are investing substantially on all aspects of technology that includes infrastructure, training and expertise, state of the art cybersecurity measures, latest systems and tools such as AI, robotics, Customer Relationship Management (CRM) systems and Business Intelligence (BI) systems. Our digital road map is a well thought out plan that is interwoven into the business, so the extended ROI’s have been considered and planned for.

Managing change and risk in a fast-paced world is important. Therefore, all our stakeholders understand that digital is a dynamic and evolving area where operating environments could drastically change and that technology upheavals are rapid due to constant innovations. The advantage of adopting a strategic process rather than an ad hoc one is that Commercial Bank is better prepared for any possibility and therefore stronger.

Tell us about some of the Bank’s innovative services and products, and its impact on the lives of your customers during and after this pandemic?

Our digital strategy includes committing investments to introduce revolutionary technology-based products and services. Few such products and services are ComBank Digital, which is a state of the art omnichannel online banking platform; ComBank eSlips; ComBank ePassbook which was launched for the first time in South Asia; ComBank Q+, the first QR-code based app certified by LANKAQR, offering options for both retail customers and merchants. Our Flash Digital Bank Account is a revolutionary account that features a complete suite of financial management and financial wellness tools in one seamless application, which is also certified by LANKAQR. All recently launched Point-of-Sale (POS) machines issued by the Bank are also QR code compatible.

Demonstrating its innovative use of new-age communications, the Bank also pioneered a ground-breaking product on the world’s most widely-used messaging platform “WhatsApp” to become the first Sri Lankan bank to offer Banking Services on this platform.

Some sectors of the economy and many businesses will need a fresh start. The onus is on the banking regulators and the banks to adjust accordingly so that these segments get the help they need

Possibly the easiest and fastest form of contactless banking yet for smartphone users, Commercial Bank’s WhatsApp Banking offers services to both account holders and non-customers, and importantly, can facilitate the opening of accounts for those seeking to become new customers of Commercial Bank.

Within the digital payment space, Commercial Bank is a pioneer, having spearheaded many initiatives and technological innovations, both for retail and corporate customers. For businesses, the bank has effectively covered every segment of our customer base with comprehensive digital solutions for corporates such as bulk payment platforms like Paymaster, where you can make all your corporate payments at a click of a button and Internet Payment Gateway (IPG) facilities. We are the market leader in providing payment solutions to the corporate sector.

In addition to a variety of Point Of Sale (POS) machines with many features for businesses, the bank has digital solutions for the micro, small and medium enterprises sector, launching specialized payment solutions such as Simple Pay and Mini POS. Also, our strong affiliations with internationally acclaimed service providers such as Visa, Mastercard, UnionPay, WeChat Pay and Alipay allows us to provide the best selection of services, wherever our customers are.

Cybersecurity is a priority for us. The bank has ensured the security of our digital services with comprehensive security systems that are constantly upgraded.

We also focus on building our portfolio of electronic products and services such as ATMs, Cash Deposit machines, Cash Recycler machines, Automated Cheque Deposit machines, ABC Centres and Mini Digital Experience Zones which mostly promote assisted automation targeted at the late adapters, rural and less tech-savvy segments. The bank aims to achieve gradual migration of this customer segment into fully digital channels by first popularizing these basic electronic channels.

Our Mini Digital Experience Zones at selected branches are just one recent initiative to facilitate the evolving needs of the customers. These zones are strategically set up in the lobby area of a branch to be inviting to customers. The zones are equipped with smart touch panels carrying “how to use” product demo videos. These units are equipped with smartphones and tablets with wi-fi access, so anyone can experience the bank’s digital offerings and onboard our digital platform with the guidance of digital assistants we have assigned to such branches to help customers familiarise themselves with our digital offerings.

The Automated Banking Centres (ABC) are another first introduced by the bank in the electronic space to help customers adopt digital channels. These are located at our branches and some stand-alone points and offers basic digital banking services and allows customers to submit loan inquiries and FD requests.

We believe that these initiatives will act as catalysts in the electronic space and over time boost digital adoption among our client bases.

What are some of the challenges for the banking sector in 2021 and beyond in terms of changing customer behaviour and expectations, and the macroeconomic environment?

As an industry that is at the forefront of post-pandemic economic revival efforts, the banking sector has a challenge to plan and provision for an indefinite period of economic uncertainty. And this is harder to do because the banking sector depends on the financial health of their customers, both retail, SME and corporate, whom they serve. Firstly, Banks need to have empathy to understand the difficulties faced by different customers at varying levels and have the genuine feeling to assist them to overcome their difficulties post COVID. Banks will need to do a lot of rehabilitations including restructuring credit facilities, strengthening relationships, and bolstering customer and investor confidence.

All this must be done by managing risks and fluctuating interest rates, keeping non-performing loans under control, and adjusting to the new normal post-pandemic while continuing to invest and innovate in new products that suit all the different customer expectations and needs. All things considered, it is fair to say that it will be a particularly challenging year for banks. However, the industry has overcome such challenges in the past and is well geared to emerge stronger from this crisis.

Whilst many sectors here are slowly and steadily returning to normal, the global economic environment remains uncertain with no permanent solution to the pandemic yet in sight. This means that the major sectors of our economy will take a longer time to recover to optimum capacity.

Falling or slower GDP growth will impact the balance sheets of banks and also the key indicators of the health of any bank: Return on Equity (ROE), capital adequacy ratios and the liquid asset ratios. Banks will need to realign their priorities and business models, operations, and processes to suit the new normal.

Parameters that determine the quality of credit, classification of borrowers and other regulations have changed, so banks have to be nimble enough to balance risks and opportunities and adjust to the needs of the economy.

Banks have deployed considerable resources to provide uninterrupted client servicing and various relief measures which require additional due diligence, customer engagement and monitoring. The way we approach credit evaluations and risk will be vastly different under the present conditions, and the accounting standards will have to undergo adjustments in the medium term so that banks can effectively contribute towards economic recovery. Some sectors of the economy and many businesses will need a fresh start. The onus is on the banking regulators and the banks to adjust accordingly so that these segments get the help they need, perhaps by way of a comprehensive post moratorium package, to enable a faster and a sustainable recovery.