The higher purpose of digital banking

S.Renganathan Chief Executive and Managing Director of Commercial Bank

Commercial Bank is more than convinced that there is more to investing in a suite of digital banking products and services. It aims to improve financial inclusion in a meaningful way among Sri Lankans, and fostering digital inclusivity is an integral part of its strategy

The largest private bank in Sri Lanka, Commercial Bank of Ceylon Plc, is on a quest to drive both financial and digital inclusivity among the population.

Here, Chief Executive and Managing Director S Renganathan outline Commercial Bank’s strategy to achieve these dual-objectives.

For most Sri Lankan banks, digital transformation is still at the nascent stage and fewer invest in typical fintech. As the largest private bank, how is Commercial Bank influencing or enabling change?

Commercial Bank has been actively engaging in digital transformation for several years now.

However, like everything else we do, it has been a journey interwoven strategically to our business model.

The bank wanted to introduce technology that matters in the lives of its customers, rather than introduce a plethora of namesake services that further complicate their already busy lives.

Having taken time to understand the nature of digital transformation that is best suited to a market such as ours, the bank has committed appropriate investments and is moving ahead full throttle.

Over the past couple of years, we launched several digital products such as the state-of-the-art fully integrated Combank Digital App.

We have digital products that are firsts for Sri Lanka, such as the e-passbook, Flash Digital Bank Account and Q+ Payment App. All these are delivering actual results in terms of influencing change in customer behaviour.

What is your vision for Commercial Bank in a digital economy?

Our vision is to improve financial inclusion of all segments of the population in a digital economy and to continue to be a leader in the digital space.

One would realize just how far this strategic direction has taken us by looking at both our vision and mission statements, which focuses mostly on achieving excellence through digital leadership.

Over the years, the bank has devoted a lot of resources and effort to research international trends and case studies to understand digital success stories of peer markets.

Our vision is a digital economy where each customer is engaged, at their level of techno literacy, rather than trying to force each one to adopt a platform that they might or might not be comfortable to use.

This is embedded in the business culture of the bank in terms of both internal and external operations. Even our Corporate Social Responsibility (CSR) initiatives focus on this area.

Instead of investing on product-specific projects, we dedicate a majority of our CSR funds to groom the future generation of the country as IT-savvy citizens by bridging the digital divide in the country through technology education.

The bank has built up a sustainable IT education journey which started with the donation of IT laboratories to schools, and has evolved into a host of full-scale national level online education initiative.

Can you discuss Commercial Bank’s digital transformation ?What are some of the initiatives the bank has undertaken in this regard?

As I said earlier, we are aiming for maximum inclusivity. It is a very complicated exercise where the national internet penetration is less than 50% and is most prevalent in urban and suburban areas.

Culturally, people would prefer to visit a bank branch rather than engage in a digital transaction.

Improving adoption requires unique and customised solutions and is one reason why the bank has adopted a two-pronged approach: the bank aims to achieve gradual migration into digital channels by first driving adoption of our electronic platform.

Our products and services both primary and secondary aim at acquisition levels of each customer segment.

This allows us to acquire customers across segments whilst migrating them both vertically and horizontally as their IT literacy levels improve over time.

Our approach to digitalisation includes investments in introducing revolutionary technology-based products and services.

Few such products and services are ComBank Digital, which is a state-of-the-art fully integrated online banking platform, ComBank e-Slips, ComBank e-Passbook which was launched for the first time in South Asia, and ComBank Q+, the first QR code-based app certified by LANKAQR offering options for both retail customers and merchants.

We also have Flash Digital Bank Account, 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 QR code compatible. Within the digital payment space, Commercial Bank is a pioneer, having spearheaded many initiatives and technological innovations, both for retail and corporate customers.

The bank has effectively covered every segment of customers with comprehensive digital solutions for corporates with bulk payment platforms such as ‘Paymaster’ where you can make all your corporate payments at a click of a button, and Internet Payment Gateway (IPG) facilities.

Commercial Bank is the market leader in providing payment solutions to the corporate sector. In addition to a variety of point of sales (POS) machines with many features for businesses, the bank has also taken the business needs of the SME and micro sectors into consideration launching specialised payment solutions ‘Simple Pay’ and Mini POS’.

Our strong affiliations with internationally acclaimed service providers such as Visa, Mastercard, UnionPay, WeChat Pay and Alipay also allow us to provide the best selection of services wherever our customers are.

The bank has ensured the security of our digital services and obtained comprehensive security systems, and is engaged in constant upgrading of them.

The other approach we have taken is focusing on electronic products and services such as ATMs, cash deposit machines, cash recycler machines, and automated cheque deposits.

We have ABC Centers and Mini Digital Experience Zones which mostly provide assisted automation and onboarding targeted at the late adapters, outstation and less tech-savvy customers.

The Bank aims to achieve gradual migration into digital channels through popularizing electronic channels.

The Mini Digital Experience Zones at selected branches are just one recent initiative taken by the bank to facilitate the evolving customer needs.

These zones are strategically located in branch lobby areas to attract the conventional customers and equipped with smart touch panels that display how-to-use product demo videos.

These units have smartphones and tablets with wi-fi access for customers to experience the bank’s digital offerings first hand.

Digital Assistants assigned to such branches facilitate handheld migration of customers on to digital.
Automated Banking Centers (ABC) is 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 offer basic digital banking services, including facilities for customers to submit loan inquires and FD requests.

We believe that these initiatives will be the catalysts that will boost digital adoption over time.

How has covid-19 impacted the banking sector? And how is this pandemic helping banks, customers and regulators become more accepting of digital tech in finance?

The negative impacts of Covid-19 are far-reaching and long-lasting than anyone could predict.

Naturally, the banking industry worldwide is feeling the pressures from contracting economies everywhere.

With the lockdown and the uncertain operating environment that ensued with the pandemic situation, we experienced a surge in demand for digital services which was encouraging and daunting at the same time, given the restrictive environments that banks had to operate in.

However, the regulator also responded quickly and relaxed the KYC (Know Your Customer) regulations and made e-KYC possible.

Since digital onboarding has been a focus area for banks under stringent regulatory guidelines for several years, the banking infrastructure was already in place to cope with the demand.

What was the bank’s own experience with digital tech during and after the lockdown?

It is encouraging to see the growth momentum continuing even after the lockdown lifted. We see user growth in all digital touchpoints such as Flash Digital Banking account, ComBank Digital Banking App, Paymaster corporate payment portal and also other merchant based payment systems.

The demand was so intense that we had to deploy several additional teams to work around the clock to satisfy the varied needs of customers.

It is extremely encouraging to see that most of the customers who do not fall into the typical ‘digital channel consumer’ are continuing to patronize the bank’s digital channels, having found out just how convenient and safer they are.

Despite the surge experienced during the lockdown, we will continue to focus on the strategic and sustainable process of digital onboarding, taking post-covid lessons also into account.

How much is the bank investing in technology, and with ROIs typically extended, and how do you balance stakeholder expectations and build a shared vision?

The bank is 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 Artificial Intelligence (AI), robotics, Customer Relationship Management (CRM) and Business Intelligence (BI) systems.

As explained earlier, our digital road map is well thought out, strategic and interwoven into the business, so the extended ROI’s have been considered and planned for.

Also, it is very well understood by our main stakeholders that digital is a dynamic and evolving area, where operating environments could drastically change or the technologies become obsolete as digital tech rapidly evolves.

The advantage of adopting a strategic process rather than an ad hoc one is that the bank is better prepared for such possibilities and therefore stronger.

As pointed out earlier, technology is at the very core of our business, so we had shared vision from the inception.