Unveiling a digital strategy five years ago to become the best digital bank in Sri Lanka, the banking group is transforming the industry, as promised by its brand slogan; The Future is Banking on Us, into something more real and tangible today.
Beginning its journey as a development bank in 1979, NDB Bank is one of Sri Lanka’s formidable banking groups with diverse businesses in the financial industry. The group comprises NDB Bank, NDB Capital Holdings Ltd, NDB Investment Bank Limited, NDB Wealth Management Ltd, NDB Securities Pvt Ltd, NDB Zephyr Partners Ltd and Development Holdings Pvt Ltd.
Five years ago, the bank shifted gear, aiming to become the leading digital bank in Sri Lanka. Dimantha Seneviratne, Director and Chief Executive at NDB, and Deepal Akuretiyagama, its Chief Operating Officer, talk to Echelon about the banking group’s customer-centric digital strategy. Joined by Indika Gunawardena, Vice President and Chief Information Officer, and Damitha Silva, Assistant Vice President- Digital Financial Services, they share the bank’s vision to lead and enable the national digital transformation.
To set the context for how NDB is harnessing digital technology to make a difference and influence Sri Lanka’s journey towards a digital economy, what is the biggest challenge facing the banking sector today?
Dimantha Seneviratne: The future of economic efficiency is in enabling frictionless transactions where there are minimal levels of human intervention from the origination of the transaction till its end. Initially, it was called STP or straight-through processing and was the norm in most banks in advanced economies, which rapidly went further with the advent of mobile apps, placing transactions in the hands of the customer. Today most banks, if not all, have their mobile app. The challenge confronting the banks in Sri Lanka today is increasing the adaptation of these apps by the public. Whilst the pandemic and the recent transportation difficulties helped to boost the numbers, we at NDB believe that the way to increase usage is to increase the versatility and user experience (UX) the app creates for the client. The adoption rate is crucial because these apps require substantial investments; hence we need to translate this customer convenience and frictionless transactions to bottom-line gains through overhead cost improvements, thus justifying these investments to the shareholder.
Damitha Silva: NDB is explicit about its digital strategy: we aim to make NDB the best digital bank in Sri Lanka by continuing to pioneer innovative banking solutions with new-age technology. We are beginning to reap the rewards of the considerable resources and investments committed to developing innovative digital platforms.
While our digital strategy aligns with the National Digital Roadmap of Sri Lanka, we are collaborating with the Central Bank of Sri Lanka and other regulatory bodies to accelerate Sri Lanka’s digital journey.
We have also made conscious efforts to streamline our internal processes with Robotic Process Automation, Workflows and begun to introduce new IT architecture with fewer external components to give NDB better control over its aggressive digitalization drive.
Having better control and visibility over your technology is crucial because it contains an emerging problem for most banks. The tech brain drain and high turnover among tech workers hinder banks from successfully deploying new technology. Another challenge for banks is breaking out of the traditional, siloed mindsets to build relevant digital solutions. NDB has tackled both these challenges admirably.
Globally, evolving consumer and market trends, regulatory changes and technological upheavals are compelling banks everywhere to reinvent themselves. What are some of the factors shaping the future of banking in this country?
Damitha Silva: The transformative impacts of the rapid upheavals in digital technology are undeniable. Many countries, including Sri Lanka, are adopting digital solutions to enhance governance structures and payments infrastructure and improve financial inclusion. Regulators are also more digitally savvy and flexible, encouraging banks to invest in digital technology. Digital technology is helping to connect with consumers at a deeper level. Increasingly, consumers demand more from businesses to respect their unique lifestyle choices and care deeply about sustainability and social responsibility. For example, people care about how businesses impact the environment, so going paperless is increasingly becoming a priority, even for banks. And customers are demanding more convenient and seamless banking experiences, another factor influencing digital transformations in banking. New age technologies like AI, blockchain and crypto are creating the need for digital-only, new-age banks while securing customer data and transactions is also increasingly compelling banks to upgrade their technological capabilities.
Why is it imperative for banks to invest in technology?
Deepal Akuretiyagama: To answer this question, we need to deep dive into NDB Bank’s digital transformation: it is purpose-driven, creating better user experiences for customers who want access to banking services, on the go, from wherever they are, with minimum effort and time. They want detailed information on their deposits, loans, credit cards, transactions and other investments and make requests for other banking services, all from a single click.
So, if a bank wants to grow, it must be relevant to the evolving needs of the emerging generation of consumers and that is why investing in digital banking technology is imperative. If not, they risk being outdated by fintechs and digital banks. However, digital banking channels are not merely because consumers want everything at their fingertips with the minimum number of apps, interfaces, and login credentials. Banks who respond to consumer needs successfully would also enable interconnections between financial institutes to provide comprehensive solutions to their customers – and this is the approach NDB has adopted for its digital transformation strategy.
At most Sri Lankan banks, digital transformation is still at the nascent stage and fewer invest in typical fintech. However, NDB Bank has made giant leaps. Can you take us through the bank’s digital transformation journey? What do digital banking and digital transformation mean to you?
Indika Gunawardena: Digital transformation is not simply about automation and the use of technology. For NDB, digital transformation means giving customers the most convenient methods of executing transactions. It also means ensuring customer data and transaction information are secure and making ourselves readily available to guide and support them to adopt our digital platforms and enhance their quality of life.
Design thinking is the backbone of our R&D and digital adoption strategy, where we endeavour to approach a problem from a customer viewpoint. Rather than being high-tech and complex, we strive to provide solutions that deliver unique experiences with easy-to-understand interfaces and conversational language.
Damitha Silva: The NDB digital journey commenced about five years ago in 2017 with the rapid expansion of our Cash Recycle Machines (CRMs) network, increasing the touchpoints for our valued customers to make deposits and withdrawals without visiting a physical branch.
We made significant leaps in the digital journey with the launch of the NDB NEOS Mobile Banking app in 2019 with many industry-first features such as biometrics and self-on-boarding with a world-class User Interface and User Experience (UI/ UX) followed by the NDB NEOS Online Banking channel in April 2020 during the peak of the Covid-19 pandemic crisis.
We embraced the concept of Omnichannel banking by providing a seamless, frictionless experience between the NEOS channels.
Since inception, our NEOS channels continue to evolve with many industry firsts: such as AI and video KYC-based online account opening and loan origination in collaboration with CRIB; combining banking and an e-wallet on a single app with the introduction of NEOS Pay QR payments, and enabling interbank transactions in partnership with LankaPay JustPay.
Further, NDB NEOSBiz is yet another offering available both online as well as in mobile application and the platform comes with a host of benefits for SMEs enabling them to manage their business transactions digitally. NDB NEOS Biz will be an essential tool for managing financial transactions via a secure and simple system and will be available to SME entrepreneurs across a wide range of sectors.
What is the role you envision for NDB Bank in a digital economy? How is NDB Bank influencing or enabling change?
Dimantha Seneviratne: We aspire to lead and enable the transformation towards a digital economy, committing significant investments because we believe that to drive change on a larger scale, we need to be that change and lead by example. Our digital drive is not confined to customer touch points but holistically across the organization. Hence our adoption of digital signatures, work-from-home capabilities, e-learning and more, shifting the mindset of our staff to broaden their digital perspective. And that elevates our natural ability to create innovative solutions for better customer convenience. The digital drive also encompasses strategic collaborations with regulators and external partners for comprehensive financial solutions, freeing our customers from the physical boundaries of the bank.
The NDB NEOS App is the best example of our revolutionary impact on banking and the leadership we give to the national drive towards a digital economy. With the app, you can open accounts from anywhere in the world and invest in FDs, apply for loans, pay utility bills, view your entire portfolio with the bank and across the NDB Group, and use it as a digital wallet. We will further enhance this to enable you to view your total net worth through our custody services and enjoy other services, such as concierge services, estate management, advisory and more, without leaving your living room. These services are extended not only to individual customers but to businesses as well, enabling them to unlock operational efficiencies. We have partnered with government institutions such as the Credit Information Bureau (CRIB) for online registration and to obtain credit reports and credit scores through the app.
We will continue to explore opportunities to deepen and broaden such partnerships with the state sector, influencing digital adoption at key government institutions that could lead to exponential growth in digitalization across the economy.
Deepal Akuretiyagama: As the bank at the forefront of the digital transformation of the Sri Lankan economy, we will continue to invest in pioneering initiatives, upgrading our core banking system to the latest version, and introducing new-age technologies to provide customers with a fully-fledged lifestyle banking experience. With each of our industry-first initiatives, we aim to set new benchmarks for other financial institutions to follow.
NDB Bank has won many global awards for digital banking and innovation. Which of these are you most proud of?
Dimantha Seneviratne: We believe all awards are equally important as they are independent external endorsements covering different performance aspects of our progression, including the adoption of digitalization to provide holistic solutions to our customers. The Bank of the Year Award by The Banker UK is one of the most coveted awards, dubbed the Oscars in banking & financial services across the globe. So are the Euromoney Best Bank Award and the US-based Global Finance’s Best Bank Award. NDB has been winning these prestigious accolades with increasing frequency in the recent past, a feat attributable to our meticulous execution of far-sighted strategies, wherein digital has always been a critical pillar.
We have won several coveted digital banking-specific awards that capture our passion for digitalization beyond a mere enabler to a holistic transformer. The Best Bank for Digital Solutions Sri Lanka 2022 by AsiaMoney for the second consecutive year, and being ranked as the Sri Lanka Market Leader in Digital Solutions 2022 by Euromoney at the inaugural annual Market Leaders rankings, are two top accolades that NDB won recently. Earlier this year, we were honoured as the Best Bank for Digital Banking Services Sri Lanka 2022 by The Global Banking and Finance Review of the UK. These accolades and awards always serve as a source of inspiration, giving our teams the affirmation to set new standards and outperform ourselves.
How do you align shareholders and other stakeholders to a shared vision around digital transformation where investments are high but returns take longer? How do you align your people to the bank’s digital strategy and build a culture of innovation?
Deepal Akuretiyagama: Our digital drive begins with the members of the Board of Directors. They continue to formulate the vision, provide the leadership and support the NDB banking group’s digital transformation. Additionally, a sub-committee within the board gives focused leadership, engaging shareholders to strengthen our resolve to transform into a digital bank. Today, digital channels account for almost 90% of the total banking transactions performed by our customers, a testament to our strategies to increase the uptake of our digital platforms. Our customers appreciate that our digital banking services with world-class UI/UX features have enhanced their quality of life.
Damitha Silva: Since its inception in 2017, our digital transformation journey encompasses upskilling our people to embrace new technologies. We first ensure our people adopt our digital banking products and solutions and then train them to be savvy users so that they can help customers make a change. It also entails building a customer-centric culture of innovation across the NDB group, ensuring that we approach product development to create banking solutions that delight and empower, helping the bank strengthen its relevance today and in the future.