Banking in Sri Lanka with NDB Bank
Originally published in October 2018, Issue 13
Since 1979, National Development Bank PLC (NDB Bank) has been committed to the financial success of Sri Lankans. Global Banking & Finance Review interviewed Mr. Dimantha Seneviratne, Director and Group Chief Executive Officer at National Development Bank PLC about the bank’s customer focused approach, product creation and their continued commitment to development in Sri Lanka.
National Development Bank (NDB) has been working with SME clients for over 30 years. How has this market evolved over the years?
NDB’s inception goes back to 1979, as a premier development financing institution in Sri Lanka, which was an apex body in disbursing credit lines from foreign investors. Since then, to date, nurturing SMEs has been one of our core commitments. As such our contribution to SMEs is perfected over the many decades we’ve served them.
SMEs over the years have evolved significantly. In terms of economic significance, SMEs which were relatively less prominent in the past have now become a major force in the Sri Lankan economy. They also possess the potential to develop in to large scale businesses in the future. Furthermore, SMEs have seen making deeper penetration in to a vast number of industries such as agriculture, fisheries, textile, handicrafts, floriculture, constructions, retail, etc. They are also seen to be embracing technology to greater extents, with quite a number of successful SME ventures being based on online selling platforms. We also see a considerable and an encouraging increase in women participation in SMEs.
What are the biggest challenges facing SME clients?
Access to financing at the right time could be a challenge still faced by SMEs. This proves true with start-ups in particular. The gap in knowledge about the avenues available for SMEs in the formal banking stream and absence of basic project proposal handling skills may contribute to this challenge. This could result in the ventures resorting to informal high cost borrowings, which would adversely affect their funding structure and profitability, and even the potential to expand further.
Technical know-how could be another challenge. Especially if the SMEs are exporters who are required to meet international manufacturing standards,and are competing with other leading manufacturers at a global level, it is vital that they have access to this knowledge, are aware of the best practices and possess the technical know-how. There could be instances that certain SME industries do not have such support, or are not making the full use of the support available.
Technology is yet another aspect which may pose a challenge, as well as an opportunity to SMEs. Whilst a number of start-ups are doing exceptionally well via on line platforms and social media, there is still a gap to the extent which technology is adopted by SMEs. Order taking, inventory controls, customer relations and marketing are some key areas in which SMEs could deploy technology, to make their ventures more competitive.
Can you tell us about your Business Banking Unit and how it will support the growing needs of SMEs?
NDB recently launched its Business Banking Unit which includes a new specialized offering for SME business owners in a variety of savings, investments and lending products.
Customers of the business sector can now enjoy a host of tailor made services and focus on the prosperity of their business while the Bank focuses on adapting the banking practices around the customer’s business needs, be it preferential rates and discounts on transactions, quick approvals for SME loans, trade financing, bank guarantees or mobile banking including dedicated Relationship Management, with a precise understanding of the importance of time for the entrepreneur.
From Business Star current accounts for small scale business owners to Business Class and Business Premier for Middle Market business owners, NDB Business Banking benefits include specialized current and savings accounts and investment opportunities for business owners where the product offerings differ according to the scale of business. Business Banking also offers project loans and re-finances schemes for business expansions or asset replacements, with flexible terms.
Small scale business owners can now obtain business loans of up to LKR 10 million with a hassle free, quick approval process, where all credit documentation has been centralized.
NDB Business Banking customers will also receive a complete suite of Trade Products and Services and Unique Value Added Services for Trade Clients with Supply Chain Finance. Meanwhile, Business Banking also offers digital transaction banking which make it easier for business owners to perform transactions on a digital platform.
Retail Customer needs have always been at the forefront of product development at NDB, one example of this is the Dream Maker Loans. Can you tell us more about this type of loan and how it differs from other loans offered?
We offer the industry’s most popular and sought after personal loan product, branded as Dream Maker Loan. Living up to its self-explanatory title, the product indeed assists the beneficiaries actualize their dreams via a convenient and non- restrictive set-up. The loans are offered for any legitimate purpose, may it be for educational/ higher studies purposes, home improvements, acquisition of a motor vehicle, a wedding, etc. We take pride in providing the necessary financial empowerment to realize the personal dreams and aspirations of our clients.
The internal processes in handling this product are streamlined in such a manner, that an eligible candidate’s loan will be approved within one day, under the Fast Track method. NDB’s personal loan product surpasses the competitor offerings, considering the flexibility it offers via means such as being collateral free and a free insurance provided against death or permanent disablement to the borrower.
Any individual with the required repayment capacity may obtain a Dream Maker Loan, whether the person is salaried, a professional or a business owner. Dream Maker loans make a significant contribution in uplifting the lifestyle of individuals and enhancing their quality of life.
The product offering is further strengthened by our “Feet on street” sales force, which disseminates banking at the door-step, whereby they visit the customers either at their work places or residence.
Another great example we note is your recently launched NDB Araliya an account for women; can you tell us about this unique product, what led to its creation and the benefits?
NDB Araliya was developed in response to the changing dynamics of the females within the economy. 51% of the Sri Lankan population is females, and their contribution to the national economy is significant with their presence in many sectors. They also make invaluable contribution in the capacity of home- makers. NDB Araliya is a guiding hand to these countless women in Sri Lanka, giving them the support they need to take care of themselves and their families, making women, in every essence, the true caretaker of the family.
It is to her that NDB has specifically designed “Araliya”; a savings account which will support women and their families through good times and bad. Araliya is a unique women’s savings account in the Sri Lankan banking industry that provides life insurance and medical insurance not just for the account holder but also for her immediate family members.
It also comes with added benefits of gifts at the 21st birthday and a free NDB Shilpa children’s savings account upon the birth of a child. The product is designed in such a way that encourages women to save, and inculcates the habit of regular savings. It truly yields financial independence to aspiring women in ensuring the wellbeing of themselves as well as their loved ones.
Do you have other innovative products you’ll be launching this year?
We are constantly looking at means to enhance the experience our customers have with NDB. In doing so, we look out for innovative solutions as well as enhancements to our existing offerings. As of now, our product portfolio is quite diverse with lifestyle offerings to individuals, SMEs, corporates, middle markets and even micro ventures.
We will augment these offerings through the deployment of digital solutions thereby increasing customer convenience.We will also come up with new products in response to the evolving customer dynamics. As we have now embarked on a digitally driven journey, our core focus in terms of innovation would be in that line.
How are customer behaviors and the increased movement towards cashless transactions changing banking in Sri Lanka?
There is indeed an increasing trend towards cashless transactions. This has trigged banks to come up with digital based solutions to enable seamless, rapid and secure payment methods. E-wallets, mobile banking platforms, online banking platforms and even card based payments are made available to customers by banks, with novel features to ensure customer convenience. This has led to banks making considerable investments in such digital infrastructure. It has also brought in a need for added security and data protection methods.
How is NDB supporting the social economic growth in Sri Lanka?
We are National Development Bank PLC. National development is in our identity. It forms a core purpose of our existence. Our support to the economic growth of SriLanka is multifold. We empower individuals and families in financial prosperity through our lifestyle banking offerings. We have a strong savings proposition which we offer to our customers, through tailored products to match any stage in life. We strongly believe that empowerment of individuals and families play a crucial role in overall economic development of the country.
We have one of the strongest project financing units in the Sri Lankan banking sector. Our Project Finance Unit has extended financial support to a large number of development projects taking place in the country. Colombo’s skyline is evolving with large scale residential, leisure and infrastructure facilities, and we are glad to be a part of this economic upbeat. Our contribution to SMEs and micro finance ventures, in both financial and non-financial aspects and our assistance to corporate customers all make direct and valid contribution to national economic development.
What does the year ahead look like?
We had an exceptional year of performance in 2017. We have shown sound results in H1 2018 as well, above market averages, as evident in our published results–inline with our new strategic goals of growing the SME and Retail base of our business. 2018 has been satisfactory so far. The Bank embarked on a new strategy in 2017, targeting 2020 to become a systemically important bank. With the successful implementation of this strategy, we are now strategizing on our way forward beyond 2020. We also bring in our NDB Group synergies and expertise in a host of capital market solutions including investment banking, wealth management and stock broking activities, so our customers can have all their financial needs met under one group of companies.
Q&A with Clare George-Hilley, co-founder, Centropy PR
Clare George-Hilley is the co-founder of Centropy PR
Global Banking and Finance Magazine recently caught up with Clare George-Hilley, co-founder of fintech and financial services specialist PR agency Centropy, as the company toasts to three years of trading. We asked Clare about what life is like running an agency in the city, the trends she is seeing in the financial services space and what the future holds following the Covid-19 outbreak.
Why did you decide to set up Centropy PR?
I was looking for an opportunity to launch my own agency, both my husband and I had been in the public affairs and public relations industry for over a decade and we thought the time was right to go out on our own.
We could see that the financial services industry was surging, with challenger brands and new technology transforming traditional banks and setting new standards of customer service. There was a huge market opportunity to create and launch a PR agency that could provider first class comms support, alongside a deep understanding of complex regulations such as AML, KYC, and the GDPR. Likewise, many traditional technology firms are diversifying their offerings, to tap into the growing market opportunity posed by the fintech boom.
So, we worked on a business plan, designed a strategy for winning clients and officially launched in September 2017. Within a few months we had a growing portfolio of clients and a thriving business, since that point, we have never looked back!
How is Centropy doing now and what are you plans for growth?
The last three years have flown by and our client portfolio has grown and diversified quickly. We now manage PR campaigns for clients on everything from cryptocurrency, wealth management to payments and trading software.
We’ve also hosted parliamentary debates with key industry figures, including Members of Parliament (MPs) on topics such as the future of the financial services industry and the impact of challenger banks on traditional providers. The team is expanding quickly and we’re investing heavily in the latest training and support to ensure our team members are equipped to reach their full potential.
How do you see the next 12 months?
The Covid-19 outbreak has crippled the economy, forcing millions of people to work from home due to the very serious health risks. The knock-on effect of this crisis will lead to companies cutting costs where possible to save jobs, so tech will play a vital role in ensuring many businesses stay afloat.
We are already working with contactless payments specialists and other fintech companies that offer solutions to help companies survive and thrive despite the inevitable challenges ahead.
We aim to continue building our portfolio of expertise, testing ourselves with new challenges and delivering the best possible service to clients
This is a Sponsored Feature.
Lessons from past recessions and advice for business owners during the coronavirus pandemic
By Neil Davis, managing director and co-founder of Sterling Networks
What is Sterling Networks?
“Sterling Networks is a professional organisation founded in 2014 which facilitates networking events for businesses across the Midlands, Oxfordshire, Wiltshire and the South West. Over 300 members attend our fortnightly breakfast and lunchtime meetings.”
What is your background prior to establishing Sterling Networks?
“During the 1990s, I worked in the corporate team for Halifax. My wife, Tracey, and I went onto own a manufacturing business, which was also called Sterling, and produced a range of gifts, merchandise and promotional items.
“We soon realised tradeshows were a great way to meet distributors and clients. From there, the business grew exponentially, and we managed to build a network of around 500 distributors. Eventually, we became ground down by the manufacturing business – in part because the local manufacturing sector was being devastated by competition from China – and took the decision to sell the business and relocate to Spain.
“After spending several years living abroad, we moved back to the UK to set up Sterling Integrity (EXPO’S) & Sterling Networks (Networking) We were inspired by a desire to help businesses make meaningful connections with one another, and we haven’t looked back since.”
The UK has recently entered a recession, brought about by the coronavirus pandemic. What have you learned from past recessions and how are these experiences helping you to navigate the current crisis?
“I’ve lived through a number of recessions and have seen the pain that insolvency causes companies on a large scale. It’s taught me that there are those who win and sadly those who lose, and that businesses must adapt to a rise in demand for certain products or services at a time of financial crisis.
“Given the nature of what Sterling Networks offers [an opportunity for business owners to connect and grow together] I decided we could build upon the brand due to the demand for new business during the pandemic. We therefore moved our networking events from face-to-face to virtual via tools like Zoom and have gained a steady stream of new members in recent months, reaching an overall total of well over 300.
“On top of that, we’ve taken new staff on during the crisis and have launched a number of new regional groups across the country. I was determined that Sterling should come out of the pandemic with a head start, so my attitude to the recession has been much more positive than those who are forecasting nothing but doom and gloom.
“We can’t pretend high street retail wasn’t suffering long before the pandemic came along, and thousands of new businesses are sure to start up to meet the demand for the products and services that people require at a time such as this. In order to develop and grow businesses need to focus on where changes need to be made to meet this demand.”
Sterling Networks has been providing emotional support to its members throughout the pandemic. What advice have you been giving to members that could be useful to other business owners?
“I try not to be too opinionated and respect other people’s views when giving advice to members, as there are always two sides to every circumstance. I’ve been careful not to say to people that they should be doing one thing or another, as I don’t know their business and its needs quite like they do. The only thing that I have been telling members is the importance of setting up one-to-ones with one another. By doing so, they can listen to the needs and concerns of other, like-minded business owners and work out ways that they might be able to help one another.
“The pandemic has meant we all have a bit more time on our hands, so the advice I would give to people is to use this extra time wisely. Not having to travel physically from one meeting to another means there is a greater opportunity to connect with more people. It’s important to remember that individuals outside of your business can be just as valuable as those within it.”
What makes you hopeful for the future and are there any words of encouragement you can give to budding entrepreneurs?
“The key events that have happened to this country during my lifetime – whether wars, recessions, or the pandemic – have enabled me to take stock of things. While these experiences are certainly challenging, we all become stronger for living through them, and it gives me great confidence that the world will ultimately improve as a result of the pandemic.
“The whole world is effectively rebooting right now, as is the business community. I like to think entrepreneurs will recognise this opportunity to take better care of their peers, and this translates to greater collaboration between organisations. Speak to as many people as you can, ask all the questions that you need to and do your homework. This might well be a difficult time for us all but planning for the future must start now if it is to become as prosperous as I know it can be.”
Exclusive Interview with Ugo Loser, CEO of ARCA Fondi SGR
Arca Fondi SGR is a mid-sized Italian active asset management company. Founded in 1983 by a consortium made up of 12 regional banks, the company has grown in time, expanding its network of distributors and its client base. Nowadays Arca manages Mutual Funds, Pension Funds and Institutional Accounts with total AUM exceeding 30 € bln, reaching more than 100 banks and financial institutions and serving more than 800,000 final clients.
What are the key contributors to ARCA Fondi SGR’s success over the past 35 years?
Arca has always put clients and distributors first. That is to say we have always privileged fair pricing for funds and developing high quality products and services for our customers. This requires constant innovation as an objective and looking for people’s talent to be free to produce its effect
Why are people the founding element of ARCA Fondi SGR and how have you sustained this vision over the years?
We work in small teams, people are young and motivated and can perform duties with a high level of autonomy and responsibility. Innovation is asked to everyone, everyday
What makes Arca Fondi SGR different from other asset management firms in Italy?
Arca is a company focused on doing what it can do very well, that is to say mutual and pension funds, services for clients and banks. We never follow short term trends but always look for long lasting impact on the industry, like we’ve done may times in the past
What products/services has ARCA Fondi SGR pioneered?
Arca has been the inventor of “Arca Cedola”, fixed-horizon, coupon paying funds, which have been with no doubt the greatest product innovation of the past 12 years on the Italian market. This type of funds, at first strictly based on bonds and later as a balanced product, has encountered an enormous success both with clients and distributors due to its simple and effective value proposition. Arca is a market leader also in the “PIR” segment of funds, a range of product focused on mid and small sized companies, that have been the best performers in the Italian stock market for the last few years. In services, Arca is a leader in technology applied to asset management. Our website, app and digital services for clients and banks are award winning, state of the art combination of data, technology and channels, and the best is yet to come on this side.
What strategies do you have in place to sustain your market position and withstand professional competition in the country?
As I mentioned, we do not waste resources on projects with dubious results, instead we constantly invest on people, products and services. The high level of profitability that Arca has been able to maintain even in difficult years for the markets of the banking sector is a further testimony that this strategy works very well
How do you use technology to create meaningful experiences for your customers?
First of all, we have created a whole new division, Arca InnovAction Lab, dedicated to technology, data and processes. This ensures projects are delivered quickly and they are free to leave bad past practices behind. Arcaonline.it, Arca’s website, provides distributors with detailed information on clients’ portfolios, asset under management and subscription/redemption requests. It monitors aggregate selling data offering to our partners a suite functions and analytics to track commercial campaigns. And if the banks branches need assistance, they may ask Sara, our digital chatbot. A broad and timely multimedia production, covering exclusive reports, comments, presentations, videos, webinars and newsletters is also available on the website.
Customers, subscribing Arca’s funds through its distributors’ network, may access Arcaclick, a dedicated area on Arcaonline.it. With Arcaclick the client can easily browse through her portfolio of funds, analyze its characteristics, view transactions and historical funds’ performance in customizable views. Arcaclick is also a powerful source of information on Arca product range: Prospectus, KIIDs and other literature is easily accessible along with news, comments and reports. Arcaclick may also be accessed via Arca Fondi App, a free application for mobiles and tables, running on both iOS and Android. Available 24/7 and in mobility, Arcaclick gives clients the opportunity access information, news and details of their personal portfolio anytime and anywhere.
What key trends will drive pension growth in 2020 and beyond?
The Italian market for pension funds is still very small and therefore there is a great opportunity to grow. Arca Fondi manages the biggest open ended Italian pension fund and it’s been constantly at the top of its rankings. As people and workers are looking for yield and to weather short term volatility, the pension fund is very well poised to profit from this trend.
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