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Sunday June 16th, 2024

Transforming a development banking legacy

Dimantha Seneviratne Director / Group Chief Executive Officer

Legacy business models can often inhibit change. However, Dimantha Seneviratne is transforming NDB Bank’s development banking heritage to meet the demands of a new digital age.

NDB has a legacy of contributing to Sri Lanka’s economy through development banking. As its CEO, how do you envision using this legacy to build a bank for the future?

NDB was formed back in 1979 with the express intention and responsibility of spearheading the development of Sri Lanka. This it did admirably having partnered with some of the large development projects at that time and not so large ones which have now grown to be large businesses because of that support at the start.15 years ago, with the country upgraded to middle-income status and the drying up of low-cost development funding allocated to the country, the bank was compelled to look at a different business model and continue funding these growth objectives. Hence the move to commercial banking has quite a different set of challenges in front of it: transiting from few large ticket transactions of development banking to millions of small-ticket transactions of retail and commercial banking.

However, our legacy of development banking left us a strong corporate and project financing expertise and customer base. We have inherited a very robust underwriting standard which today is paying dividends. This legacy has given us the luxury of building around our mainstays of corporate banking and project financing to build out SME and retail banking to the same level.

My vision is to continue our legacy of supporting the country to touch and uplift the lives of the people through our SME and retail banking franchise and digital banking as an enabler. Digital is the future, it is no longer a nice-to-have option, and hence building a robust scalable digital platform is a key imperative. We will continue to be the change agent and lead in many areas including renewable energy, digital solutions, improving operational efficiencies, empowering women, and holistic banking solutions.

My vision is to continue our legacy of supporting the country to touch and uplift the lives of the people through our SME and retail banking franchise and digital banking as an enabler.

NDB has successfully raised new capital in a challenging environment. How was this achieved?

Our rights issue is yet to be concluded, but we are confident that with a cornerstone investor, it will be a success. Partnering with a DFI such as Norfund demonstrated the confidence such long term investors have in the untapped value in the country and who is best poised to realize that value. This was after a very stringent credit and commercial due diligence and also the first equity investment for Norfund in Sri Lanka. This is a great achievement for NDB and the country amidst the challenging environment and country rating downgrades. It could also give an impetus for future investments of this nature. Excellence, transparency and keeping with international standards went a long way in finalizing this transaction. A well-coordinated effort bringing together the various teams across the group to successfully conclude very thorough due diligence amid a pandemic was a job well done.

Let us talk about the industry. Technology is transforming banking everywhere. How will banking be different five years from now in Sri Lanka?

Sri Lanka is a bit behind when it comes to technological adaptation when compared to our regional counterparts. However, there are several initiatives taking hold as we speak. Most of us are aware of the QR code promotions that are happening across the country, this has the potential to transform the economy, the spending habits, and the saving habits at a country level.

The digital KYC is another initiative that is taking hold, this will change the way we onboard clients and will increase the ease with which clients can switch banks. This ability to switch banks easily will, in my opinion, drive the change in the banking industry over the next five years. Banks or third parties which facilitate this ability will entice more clients because clients need convenience, especially the millennial who want to tap the best from across any industries. Closer interaction and exchange of data will take place especially among the financial sector player such as the insurance industry.

The industry will need the support of the government, other ecosystem players and the regulator to deploy technology-based solutions more rapidly by creating the necessary interfaces for seamless data interactions. One such interface is the one developed by the CRIB which allows banks to efficiently read the clients credit history. During the next 5 years, we will see Banks starting to use data to understand client requirements better, using predictive and prescriptive AI technology to deliver that solution to the client proactively.

At NDB, nurturing talent and rewarding performance is a key element in our value system.

Leaders need to keep an eye on the future while managing the everyday challenges. How do you balance these competing demands as a CEO?

The secret is in developing and empowering a talented and energetic team below you. While I rest assured that my top leadership team takes care of the day to day operational challenges, it frees up my time to spend it on strategic aspirations. But of course, from time to time we need to dig in deep to overcome underlying issues and that is where the banking experience I have in several local and overseas institutions come in handy to understand and come up with holistic solutions.

At NDB, nurturing talent and rewarding performance is a key element in our value system. Apart from that, one needs to invest there own time in strategic thinking and constantly explore growth opportunities. NDB is the only bank that was exposed to a gamut of other financial sectors via the subsidiaries in investment banking, wealth management, stockbroking, and investment funds. We need to keep abreast of all the development at the highest level, and I as the Group CEO need to make sure that potential growth opportunities are identified, and sector heads are adequately empowered and encouraged to pursue them. To do this, investing energy and freeing up time to think is essential.

What is the one leadership lesson you learned the hard way? Please explain.

The adage about judging a book by its cover is very apt here. We assess people by their experience, education etc. However, when it comes to delivery, they can fall well short of what their pedigree would otherwise indicate. This I learnt the hard way, having had to roll up my sleeves and do the heavy lifting in some cases. I think as a leader, it is important to get a clear assessment as early as possible of your second level who you expect to deliver on your aspirations and vision for the organization. Having made that assessment, taking the most appropriate action in the shortest possible time to put the correct team together is the next quality one must develop so that one can delegate with confidence. I certainly believe in developing winning teams and this I learned the hard way.

As a leader, when you look back, what do you think will matter to you about the legacy?

What I do today, we might not see the results of within the day or even during my term as CEO. What I am doing today is sowing the seeds and laying the foundation. Today we live at a time when so many changes are happening which will shape the future of not only the industry but the country. I count my blessings that I am at this position where I can shape that future and do something for society and people. My legacy will be the fruit of my decisions today and I hope they will make a difference to society in the future. With position comes power and one has to be very mindful of the responsibility and use it for the sustainable good of the country, economy, and our people.

My legacy will be the fruit of my decisions today and I hope they will make a difference to society in the future.