Deploying new banking tech during Covid-19
Listed Sampath Bank pushed the boundaries making sure customers had access to services and accelerating the digital adoption during the lockdown
Banks are often referred to as a country’s financial plumbing and this reputation for keeping the economy ticking was demonstrated during a two-month lockdown imposed to contain the spread of the Covid pandemic in Sri Lanka. As banking was declared an essential service it was possible to keep branches operating but providing customers and companies access to their savings and credit wasn’t straightforward due to the lockdown.
With a reputation for pioneering the use of cutting-edge banking technology, Sampath Bank fast-tracked and deployed several new initiatives slated for a 2021 release during the Covid-19 lockdowns. Among these was a tie-up with a ride-hailing startup for cash deliveries to people’s homes.
“Sampath Bank has built strong tech capabilities which offers the opportunity to do all this faster than anyone else,” says Tharaka Ranwala, Senior Deputy General Manager – Consumer Banking at Sampath Bank.
Excerpts of the interview are as follows:
What was the Covid-19 lockdown’s impact on the operations of Sampath Bank, and was it possible for the bank to offer uninterrupted banking services during this time?
Ranwala: Most people don’t realise that banking was an essential service, along with healthcare and the work of the armed forces. At the onset, it wasn’t clear how long the lockdown and curfew will continue. During that time, some bank branches operated with limited staff.
However, we soon focussed on getting our entire network mobilized with limited staff. By then, lockdown restrictions were eased to allow people to visit banks for essential transactions. Our technology capability meant that we were able to serve vulnerable customers like pensioners without any interruptions. We ensured smooth operations at branches where we thought a high proportion of customers were vulnerable to the Covid disruption and even extended banking hours to accommodate them. We did all this while ensuring the safety of our own staff.
We deployed mobile ATMs, like other banks. But we took that concept further. Sampath Bank together with the online food delivery and ride-hailing app PickMe were able to deliver cash to people at their homes. The process worked like this. A customer initiates a transaction through Vishwa (our regular mobile-cash platform) to send money to yourself. Then you book a PickMe driver and share the transactional-based OTP (one time password) that’s sent to you. It allows the PickMe driver to withdraw that exact amount of cash. He goes to the ATM, makes a withdrawal and brings it to you for a fee.
Our tech-savviness as a bank enabled us to successfully implement something no one else has done. The only security concern was in the event a driver did not bring the customer the cash. To mitigate this, we did several things: we restricted the maximum value to Rs 10,000 and had insurance coverage in place. We also had an agreement with PickMe where we used only drivers (and not riders) who may be better placed to handle this.
Further, PickMe has GPS tracking for all its drivers, which allowed our customers to monitor their movements. We initiated this service in three to four days, and this included obtaining clearance for drivers to operate during the curfew, which is a testament to our commitment to customers.
What will be Covid’s impact on the bank’s financial performance?
Ranwala: All banks will be affected by the pandemic this year. The question is, how ready are we to accept this? The two-month lockdown affected regular business volumes of banks, and additionally, the debt moratoriums and refinanced loan schemes impact revenue.
Banks must now prudently manage costs to avoid hurting profitability. Sampath Bank was resilient from the start. As early as March ‘20, we developed scenario-based business plans and rightsized, not downsized, branches and business units. We also introduced processes to improve productivity, streamline operations and got everyone in the bank focussing on digitalization. Those who worked from home committed time on revenue-generating activities.
How will the bank manage risk coming from the loan moratoriums?
Ranwala: This crisis has not spared anyone, including banks. The economy was just beginning to turn around after the 2019 Easter attacks when the pandemic struck. Cash Flows of businesses have taken a hit from the lockdowns and the slow recovery since. As a responsible bank, we had to ensure that the moratoriums and refinanced loans reached vulnerable businesses. Managing risk is critical because we need to support organizations that are at risk while safeguarding the funds of depositors. A lot depends on how quickly the economy recovers, so we monitor borrowers and keep a close eye on the situation.
How did you support SMEs during this time, and how would you mitigate the associated risks?
Ranwala: We have a sizable SME portfolio, and we made sure they received all the help they needed to access the Central Bank’s refinance credit scheme. The team at our CSR project, ‘Sampath Saviya’ Entrepreneurial Development program, also stepped in to help our branches work with the SMEs to help them obtain the debt moratorium.
Due to the uncertainty, I can’t suggest we mitigated every risk. Every time a bank lends it undertakes a risk. But, at this juncture, the priority is to support our customers.
To ensure SMEs can continue to service loans we help them with managing finances, shedding unnecessary fat and providing the tools for cashflow management. We credit facilities to customers’ operating accounts allowing us to then understand how cashflow works. Sometimes, SMEs have used personal funds of owners to pay salaries and when the business makes money, the owner requires repayment. We look into all of this.
Additionally, Sampath Bank is funding its own loan scheme to support businesses during this time of need. This scheme is apart from the moratoriums, Central bank refinances, and guarantee schemes.
How is the bank leveraging technology to manage costs and also enhance the customer experience?
Ranwala: This is one of our strengths. We are a technologically driven bank. Pre-pandemic, we had embarked on a digitization drive with a twofold focus.
One is digitizing the operations, to significantly improve our processes, reduce costs and have a low fraud culture. Second is the digitization process of the customer delivery point. One year ago, I decided to put the group chief IT officer in charge of developing the technology platform, with me driving the entire undertaking bank-wide. I stepped up the whole process, and there has been a lot of development. One example is the e-mandate. Today, at any of our branches a customer can submit an electronic mandate. The customer fills in the information on an iPad, or someone is present to guide them through it and the data goes straight into our system. Not only is the entire process digitised but we’ve eradicated about 15 paper documents in the process. This practice also prevents any kind of malpractice or fraud.
Sampath Bank has changed the game from a customer experience perspective too. We are the only bank to implement slipless banking to deposit or withdraw money. You can do these functions without signing a single slip. It uses a mobile device to issue a token to either share with the teller or run a QR scan, and the transaction is complete.
Many of these initiatives were planned for rollout early next year but we fast-tracked it due to COVID-19. We are pushing forward on both internal processes and customer engagement so that our entire operation is digital. It will lower costs, improve processes and efficiency within the bank.
In the bank’s experience, have online banking and e-commerce transactions grown since the pandemic outbreak?
Ranwala: If you look at January and February 2020 versus April and May, there is phenomenal growth. Customers have flocked to digital banking and also have grown accustomed to e-commerce transactions. We are lucky to have the best internet banking facility in the country—Sampath Vishwa—which allows you to perform a wide range of tasks from anywhere.
With Vishwa, you no longer need to visit a branch. It also links the largest base of third-party vendors. We are the only bank with a platform capable of handling 90% of all online transactions via Vishwa. The tech platform is user friendly. For example, your driver takes your vehicle for servicing, and when it’s done, the service provider will send you a text message. All you have to do is get onto Vishwa PayEasy and make the transfer.
Change is not easy especially in well established and large businesses. How did Sampath Bank navigate change?
Ranwala: Change is also challenging in highly regulated industries like banking, where procedures sometimes appear to be cast in stone. However, like everyone else in the aftermath of the Covid outbreak, we understood we had to change fast. In the first two weeks of the outbreak, I was unsure of how things would go.
Our quick adeptness soon after was maybe because we knew we are essential services and we had to be relevant in the climate and serve our customers. Covid-19 taught us invaluable lessons, one in particular, is that the biggest obstacle preventing success is the inability and sometimes unwillingness, to change. My whole life has been about change, and this pandemic taught us how to change and why it’s important. If you don’t, you won’t make it very far — you need to adapt and accommodate.
At the same time, I believe we bankers are luckier than most people. The Covid-19 lockdowns did not impact us in the same way as other sectors in the economy were. The authorities made sure we could continue to function realising the economic contribution banking makes. We didn’t layoff team members—we only paused the promotions. There were also no salary cuts because the Central Bank clearly instructed us not to do so. This insulation also brings with it a great responsibility, to get the economy up and running.
From the banking point of view, risks are elevated, and until September 2020, we will not know where we stand. These are uncertain times for us all, however, banks need to be more resilient than ever and prepare for the future.