Digital divide a key challenge for local banking industry: Arjun

This is the eighth of the interview series titled ‘Mirror Business S&P SL20 Insights’ conducted in collaboration with the Colombo Stock Exchange (CSE) as an investor relations initiative. The column encourages S&P SL20 companies to bring attention to developments in the industry, the company and discuss growth prospects.
Following are the excerpts from an interview with DFCC Bank PLC CEO Arjun Fernando
What are key milestones that DFCC Bank has achieved in 2016? 
We have achieved much during the year 2016. The key highlights are as follows:
Following our merger, we successfully aligned our staff and have built a thriving workplace environment and strong culture.  We want DFCC to be a great place to work and we want to attract the very best talent to the organization. 
We made significant efforts to enhance our digital channels – we introduced the Vardhana Virtual Wallet, a revolutionary product that takes everyday transactions online and offers our customers added ease and convenience. 
We increased our branch network and we have strengthened our presence in many key rural areas, where we have converted extension offices into fully-fledged branches. 
We developed a comprehensive SME strategy incorporating rural banking and micro financing. We also launched our MSME unit to cater to micro-enterprises that are greatly in need of financial services. 
We increased our brand presence throughout the year, sponsored three big events (World Export Development Forum, Global Shapers and the Economic Forum) this further reinforced the stance that DFCC has always taken to support the nation and our economy at large. 
What does 2017 hold for the Bank and what do you see as potential opportunities? 
We plan to implement a dynamic and innovative digital strategy across our operation shortly that will drive us towards an era of online applications, transactions and processing. 
Going forward, value additions and customer care will be core areas that we will invest in and focus heavily on. We will focus on adding a broader and a more diversified range of products to our overall offering. 
We will also focus on aggressively expanding our branch footprint and brand presence, especially in key rural areas and up-and-coming towns across the country. Driving financial inclusivity is an integral part of DFCC’s commitment to building the nation, and we want to make our services and products as easily accessible as possible for communities across Sri Lanka. 
Could you elaborate on a few industry-wide growth prospects going forward?
Over the years, Sri Lanka’s banking industry has strengthened with the implementation of practical regulations, continuous stability and strong growth. Retail, commercial and investment banking are key areas that can be tapped into further. 
SMEs and MSMEs are also on the rise and in need of customized, high quality banking services, this is a key target segment that we will focus on in the years ahead. Our efforts to increase our presence in smaller towns and more remote locations, will hopefully enable us to cater to the business communities and customers in these areas.
Additionally, the digital ecosystem of the banking industry is evolving at a rapid pace, new innovations and technology along with more streamlined processes are revolutionizing banking in Sri Lanka. However, as we make the move towards cloud-based systems, online banking and the use of digital apps, it’s important for us to keep cyber threats, security, good governance and effective practices in mind to ensure that the industry continues to grow and thrive.
In your opinion, what challenges do you anticipate in the industry and how do you aim to address them? 
The digital divide is a key challenge that we have to address in the local banking industry. We need to facilitate the growth of online banking, however this requires a great deal of trust in online processes and transactions.
In a nutshell, we need to convince more customers of the benefits of using digital applications such as the Vardhana Virtual Wallet and other similar platforms. That being said, we have noted a drastic increase in online banking activity over the years and we hope to build on this in the future. 
Focusing on the shareholder, what efforts and initiatives are you taking to drive shareholder value? 
Our resilience and ability to evolve to cater to emerging needs has been a key factor in the past. We have a proven track record in project financing and SME financing.
Following our merger, we took great strides to strengthen our position as a fully-fledged commercial bank and launched an array of innovative products and services. We take great pride in our continuous efforts to build a well-diversified portfolio that fulfills the financial needs of our customers and provides them with added value. 
Expanding our presence to key locations across the country is an important investment for us and we hope to open even more new branches in the coming year, as well as intensify our digital reach.
After 60 years of being a leader in the sphere of development banking, we are proud of the results that we have obtained for our shareholders. Now as a fully-fledged commercial bank as well, we are further strengthened to grow and raise the bar in key aspects of service delivery. 
How has listing on the CSE been beneficial to DFCC Bank? 
Being listed on the Colombo Stock Exchange was an important milestone for us, not only does it enhance our capacity to raise funds, it has also given us immense market exposure. 
The Colombo Stock Exchange has 295 listed companies representing 20 business sectors. We are pleased to be listed alongside them and hope that we can continue to benefit from increased levels of transparency and exposure, that being listed on the CSE offers. 
Finally, what is your message to the Bank’s shareholders? 
Overall, we remain committed to maximizing shareholder value in a sustainable manner by providing innovative solutions and drawing on the synergies of the other businesses within the group.  We maintain continuous dialogue to constantly assure them of our commitment to keep growing.
I would like to thank our valued shareholders for their continued support and encouragement, and we look forward to delivering optimal results and value to them in the future as well.