People’s Bank aims to be the most digitalised bank by 2020

The dynamics of the traditionally cash-based society of Sri Lanka are changing quickly with penetration in the following areas going up: smartphone, mobile (jumping to 137%) and internet (rising to 34%). While financial institutions are rapidly investing in digital channels, the competition on mobile channel is quickly heating up with new applications and instant payment services like e-money, QR code and near field communication-based payments.

People’s Bank, the country’s second largest bank, is breaking away from the traditional mindset and legacy technology barriers and has been the frontrunner in undertaking digital transformation. The bank has over 10 million customers and operates through one of the largest physical networks with 745 branches and around 1,000 automated teller machines, cash deposit machines and kiosk machines. Adopting a holistic approach, it developed ‘People’s Digital’, an ambitious digital drive focusing on seamless digital experience. The comprehensive transformation included upgraded core technology, digital channels, mobile application, digital branches and digital onboarding among others. A challenging transition for the 57-year-old unionised state-owned bank set in traditional mindset.

Multi-pronged initiatives

Sharing the details of the bank’s digital journey, Rasitha Gunawardana, CEO and general manager of People’s Bank explained, “We initially thought of six modules, some of these are digitising the internal processes and others are at the front end where the customer interacts with the bank. We introduced hand-held mobile app and corporate internet and mobile banking. We are proud that the adoption of our mobile app is number one in the market. Some of the private competitors are catching up but we have still maintained the difference because we were early adopters. For the corporate Internet and mobile banking app, it sits on corporates’ desktops and they can do all their transactions with the bank. That is a little slow because even for corporates in the country it means a sea change in the culture.”

In a systematic move, the bank looked into core technology as well as channel initiatives and implemented Silverlake’s Digital Bank Platform for end-to-end digital engagement, including the development of digital omni-channels. The platform comprised of several modules towards digital onboarding, internet banking, mobile banking and loan origination system for retail and corporate customers.

With the world moving towards mobile communication and transactions, the bank focused on channel remained its focus as it launched "People's Wave" app for its retail customers in 2018. This enabled customers to complete their registration and perform 50 types of transactions through mobile. Besides all core financial transactions, it included pawning (gold loan) based payments  and also the ability to transfer cash to any individual even if he does not hold a bank account, which could be collected at the nearest People’s Bank branch.

Digitising the physical network, the bank rolled out digital onboarding centres and paperless digital branches. These included ‘on the move’ digital marketing agents equipped with WiFi-enabled tablets and devices for digital onboarding and to serve customers with the country’s first paperless process. All these facilitated opening of accounts within a few minutes, instant card issuance and activation of cards and digital channels.

In addition, the bank implemented 230 new self-banking unit concepts comprising cash of deposit machines, automated teller machines and kiosks to improve the 24/7 service capability using digital technology.

The bank is also developing a retail loan origination system that has been rolled out in 35 branches. “Once tested and proven, it will be rapidly rolled out to all branches. Previously it took about one week to one month to give loans. Now by being digitally enabled, we will be able to give loans within an hour to one week, depending on the collateral,” explained Ranjith Kodituwakku, deputy general manager, People’s Bank.  He shared that the bank expects to launch its corporate loan origination system by October 2019.

Recent digital transaction growth

The People’s Wave app achieved remarkable market acceptance. Prior to the launch of the app, the bank had a native short message service (SMS), unstructured supplementary service data (USSD)-based mobile banking that had 800,000 customers. Since the launch of the new app, it achieved a download of 310,000 within seven months, with four times the value of transactions from 250,000 customers. Currently, the application download is over 500,000.

The app recorded over a million financial transactions and over eight million non-financial transactions. It currently has a good customer satisfaction rating of 4.4 out of 5 on Google Play.

Notable results can be seen in the bank’s overall digital journey. It now has 200 digital branches, which it plans to extend to its entire branch network in one year. The digital branches have improved efficiency and enabled the staff to shift to more relationship-centric roles.

“We have digitally onboarded 400,000 new customers and 80% of all our onboarding is digital now. Our target is to increase this beyond 90%,” added Kodituwakku. At present, People’s Bank’s digital onboarding already passed 500,000.

“Since we have started digitalisation, we have not recruited any staff. People are retiring. We are trying to cover our costs by having more channels, more access to the bank rather than coming to counters. We have stopped expanding our branch network. We have established more than 250 self-banking units across the country. We can further capitalise on this concept in future,” revealed Kodituwakku.

Notably, the bank achieved a significant 348% growth in its digital transaction volume in 2018 compared to year 2017.

Recent digital initiatives translated into notable increase in mobile and digital transactions

Figure 1: Mobile banking transactions and digital transactions growth in 2018

Source: People's Bank

Growing competition and future plans

As the shift towards mobile transactions continues to accelerate in the country, competition is rapidly mounting from other banks, as well as fintechs.

The competition in digital and mobile services is definitely heating up, however, the bank is optimistic in beating the competition.

“Other banks have introduced applications, but I am not sure if they have a truly digital platform. On top of the core banking, we have built a digital application layer with Silverlake and on top of this we have built digital channels. In that sense we are truly digital,” pointed Kodituwakku.

“We plan to be the most digitalised bank by 2020 and we are driving towards it”, he said.

“Since we have a digital platform and core banking and it is integrated with social media, we have a lot of data. Our next step is to see how we can use this big data to churn out new opportunities, business intelligence and how we can manipulate this data to give digital market offerings to customers. Customer specific marketing is the future,” he added.

Digital penetration is still picking up in the country while access to smart phones and internet is low but growing. Expanding digital banking adoption will require constant customer education. People’s Bank has an advantage of being an early adopter, but it’s continuing future success will depend on how agile it is in bringing new solutions to the market, how effectively it can exploit data and how it will continually expand its network through collaborations to offer a wider spectrum of customer-centric services. 

Contact Person:
SooChing Choo
sooching.choo@silverglobe.com
Group Managing Director,
Silverlake Digital Economy
Level 5, KPMG Tower,
First Avenue, Bandar Utama,
47800 Petaling jaya,
Selangor Malaysia
+60377216000
+6012 9778831