By Chandeepa Wettasinghe
Sri Lankan banks and companies in general should transform themselves to be relevant in a changing future, according to experts who presented their views at the CIO Agenda 2015 held at Cinnamon Grand this week.

The speakers included Former Standard Chartered Bank Global CIO David Brearley, LinkedIn Asia Pacific Marketing Director Virginia Sharma, Oracle Corporation Applications Product Management Vice President Hirak Kayal, IDC Financials Asia Pacific Managing Director Cyrus Daruwala, IBM Analytics ISA Business Unit Leader Dulles Krishnan, VmWare Strategic Business Development Head Matthew Hardman and ICTA CEO Muhunthan Canagey.



Making use of our location
The ASEAN Economic Community (AEC) which is planning to become an integrated regional economy by the end of 2015 will become the new European Union, and Sri Lanka should be ready to harvest its potential, Daruwala said.

“You’ll have to open your eyes a little bit more to see what has already crept up. If I ask you if you could take a one hour plane ride or a ferry, and you’ll be in the European Union, would that appeal to you? Would that have an impact on Sri Lanka? The answer is 100 percent yes. If the EU was just around the corner, that will affect you. That will affect your economy, your banking, everything that you do. Well, the EU is here, and it’s called AEC,” he said.

Daruwala said that the 10-member regional bloc which forms a US$ 3 trillion economy will lift barriers between each other, just like the EU. For example, he said that Singaporean banks could set up 100 branches and 300 ATM machines in Myanmar with capital adequacy being the only qualifier.

“Now you’re not competing with China and you’re not competing with India. You’re competing with a US$ 3 trillion economy. Everybody starts scrambling to do something. IDC wrote about 100 different RFPs (request for proposals) last year. Some small things like mobile banking and some large RFPs like core banking; all because suddenly this becomes a very big playing field, and very few banks are ready,” he added.

Several Sri Lankan banks and financial institutions have already set up small branches in ASEAN nations, possibly to have a foot in the door. Daruwala added that ease of population movement within AEC as well as from the outside world would increase, adding to the matrix.

“We could have 50,000 Indians working in the heart of Malaysia, as long as the bank could afford to pay them. So, population movement suddenly becomes a huge issue. Now imagine the ramification of that to the Sri Lankan economy, or banking institutions; you are only 20 million,” he noted.

He said that since China and India present the world’s largest populations and both have economies exceeding US$1.5 trillion, they would be better equipped to enter the AEC market.



Sacrificing politics to gain talent
Sri Lankan financial professionals are however globally considered to be cut above the rest of Asia and the developing world, thereby presenting a competitive advantage, despite a consensus that they lack soft skills.

Meanwhile, Daruwala noted that Sri Lanka could compete, if the country becomes innovative.

“Ninety seven percent of you are inconsequential to your organization. 97 percent are just BAU (business as usual) people in the audience. You won’t leave any legacy, or bring any change. You’ll tweak the process a little. But 3 percent will bring the change. They will shine brighter. That 3 percent, they’re not exceptional people, they’re just a bit radical,” Daruwala noted.

Canagey said that companies must give these radicals a chance to implement their processes.

“Innovation has to come from within. You shouldn’t just take plans presented to you and implement them. But for that, there needs to be a change in culture. Just allow one crazy idea to be implemented in your organization. Give that opportunity for the one who comes up with the craziest idea. Put it through and have it rolled out. And you might end up realizing that this person had a completely different view of how things should have been done these entire years, he said.

However, Daruwala said that for this to happen, there must be an absence of office politics.

“You could call it a political divide or politics within the bank. Each bank and institution has their P/L (profit and loss), and the CIO (Chief Information Officer) has a BAU budget. There are now data scientists, information officers, data transformation heads. These are ceremonial titles. They can think and play, but they don’t have budgets. If a CEO decides they can go to market with something that’s all well and good, but that’s one of the big inhibitors; politics and budgets,” he said.

Sharma said that in order to make the most out of these new job roles, employers must speak social instead of English, and indicated that 80 percent of CEOs now frequent social media, compared to just 36 percent in 2010, compared marketing and information officers, virtually all of whom are active in social media.

Since most top tier executives are not accommodating the innovative Millenials and Generation X, Sharma said that Sri Lanka has continued to see a brain drain in crucial skills needed for the future.

“These are the skills that will be most needed by employers in Sri Lanka. Perl, Python and Ruby, mobile development, data presentation, digital and online marketing and mechanical and aerospace engineering. But there’s been a lot of turnovers and most of these skills are leaving the country,” she said.

Sharma added that of the younger generations surveyed, compensation was not found to be as important as work-life balance which was found to be important by 57 percent, strong career path found to be important by 52 percent, and challenging work by 47 percent.

Canagey said that these younger generations must be placed in the board rooms.

 “Predominantly the problem is; we don’t have youth in our board tables. We don’t have the youth, who have a very clean understanding of what is needed. They have a great understanding of technology and innovation,” he said.

However, Sharma pointed out that there is no talented youth in the boardrooms, as those who are have gone abroad seeking opportunities not being given to them in Sri Lanka due to politics.

“Most of them (directors) are in their 50s. So, in a few years, they’re going to be moving through; and we’re not replacing that talent with the next generation, and that next generation is not coming out of the Sri Lankan university curriculums with the skills that they need to be successful in this new paradigm. So, until the education system is reformed, until institutions and companies invest in certifications that matter, and until the country retains the talent that it is generating and bringing back talent that it needs—especially technical—I think it’s going to be a big problem,” she said.



Letting the talent innovate
“Does the organization have a need to change instead of resorting to politics?” Brearley asked the audience.

He noted that mobile banking will be the future, and treated the audience to a real life scenario, where a bank without staff operates using mobile technology and 2 touch screens.

Brearley said that regulators are going to add to costs going forward—hinting at extra taxes and stricter governance and quality standards—which would lead to digital disruption.

“Costs are a big challenge going forward. Banks will have to go from service to self-service models, by including the whole ecosystem around it, and completely redress problems,” he said.

Kiyal noted that Sri Lanka, with its abundance of pre-smart phone style phones, should develop a text-based system which could be utilized by the population at the bottom of the income pyramid instead of just servicing smart phone apps.

Brearley said that it was innovation which led to Alibaba taking just 15 years to build an ecommerce platform and then placing the excess liquidity in a lending service, while Standard Chartered had taken 150 years through the traditional methods to reach the financial strength of Alibaba. He speculated that future entrants could even topple the current giants within one and a half years.

“So banks are going to have to grow as a network. They are going to have to grow as one entity,” he said.
Kiyal gave an example of strength in numbers for banks.

“Now, when a bank is hacked, they hide it. Why don’t they, instead of hiding it, inform the other banks, and try to find a solution together,” he noted.

However, banks are more worried about protecting their reputation, as customers place their money in accounts based on trust, which may be breached if the truth is revealed—60 billion hacking attempts took place in 2014, most of which targeted banks.

Meanwhile, Daruwala claimed that banks have ample room to innovate.

“There is so much data in banks. Why do they just print a black and white statement at the end of the month? Why don’t they, instead of pressing the print button, press the analyze button, and do some gamification? Show some pie charts. Give me prizes based on achievements? Deals? Anything,” he said.