Sri Lankan banks would be able to offer very low interest rates to consumers in particular SMEs, MSMEs to help them develop their businesses, add more value to the economy if banks could bring at least 50 % of cash in circulation into the banking system, Thilak Piyadigama, Chief Executive Officer- SDB Bank said.
“Cash in circulation is not actually a good indicator and has no economic value to the country. That is where I would say digital can help big time in Sri Lankan context,” Piyadigama told a high level Virtual seminar organised by the Central Bank of Sri Lanka under the theme, ‘Digital Financial Transformation: Building Better Financial Systems”.
Noting that about 80 percent of Sri Lankans are having bank accounts, Piyadigama said, Sri Lanka is also blessed with few other assets such as a world class mobile network which has connected 30 million phones. Sri Lanka has only a 21 million population. Obviously out of that 30 million I would estimate 10-15 million to be smartphones and that’s a huge number for a size of nation like Sri Lanka. And they are all virtually digitally enabled citizens.
Apart from that 90 % of our internet traffic goes through these mobile phones. That means we’ve got our foundation pretty well. In fact if you call it a mobile phone, it’s not a mobile phone, it is a supercomputer and the phone is just an app.”
Piyadigama said that even with his previous experience at Nations Trust Bank and Standard Chartered Bank; they are more of catering to an urbanized crowd.
“But in my current bank it is totally opposite as we’re catering to the rural crowd. There are so many rural folks now using technologies and apps as it is made available to them. Our transaction value and volumes are going up. In fact in my bank we do 80 % of transactions through digital unassisted channels.”
Piyadigama further said that when it comes to money people are a bit reluctant to put money on an app. And it requires building trust and confidence on the system and also the user experience part of it.
“All the banks in Sri Lanka have got one or two apps; they are offering pretty good experience; as a result check volumes and value are going down every quarter about 10 % in Sri Lanka.
When digital payments across the banking industry are going up, that means we are connecting more and more enterprises, SMEs, and corporations onto digital platforms. Even though banks did not start in a structured manner,but everyone has done their part based on the infrastructure availability, then we’ve connected ourselves and connected the dots as well. That’s why we have this huge growth of digital connectivity,” Piyadigama added.
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