The country’s biggest private sector bank, Commercial Bank, is leveraging digital transformation to enhance customer experiences and improve operational efficiency in its quest to be futureready. Commercial Bank’s Sumudu Gunawardhana, Chief Information Officer, and Pradeep Banduwansa, Assistant General Manager – Digital Banking, explain how the bank is enhancing its strategic focus with investments in emerging technologies like AI and robotics and fostering a culture of continuous learning among its people to stay ahead in the digital landscape whilst prioritizing digital education initiatives to bridge the digital divide in the community
Changing customer expectations and emerging technologies will force banks to adopt new business models and strategies that are customer-centric to stay competitive and relevant. How will these trends reshape the future of banking?
Sumudu: As people increasingly prioritize convenience and relevance, rapid technological advancements continue to speed up the evolution of customer expectations in the global banking industry. The digitization of banking and the transformation of traditional brick-and-mortar models have gathered pace worldwide for several years. However, the Covid-19 pandemic acted as a catalyst, further accelerating these changes. Even in Sri Lanka, we witnessed a significant shift and a change in perception, even among the most resistant segment of the population.
Customers now demand convenient access to banking services 24/7 through various channels, including mobile apps, online platforms, and chatbots. And banks are responding, increasingly investing more in digital transformation to create a seamless, omnichannel experience while streamlining their operations. The banking business models are shifting to reflect these market dynamics, and banks are prioritizing a customer-centric approach to deliver personalized and frictionless experiences.
Open banking initiatives and regulatory changes have fostered collaboration between traditional banks and fintechs, startups, and other third-party service providers. This collaboration drives innovation, enhances competition, and expands customer choices. By leveraging open APIs and secure data sharing, customers can access a better range of financial services from multiple providers within a single platform.
The future of banking will witness advancements driven by AI-powered digitalization, the increased role of big data and analytics, the implementation of blockchain technology, and the opportunities offered by the Metaverse. To ensure the security of customer data, prevent fraud, and enhance cybersecurity, banks are adopting advanced technologies such as biometrics, blockchain, and encryption.
Moreover, banks are embracing ecosystem integration by forming partnerships with non-banking entities. These collaborations with retailers, e-commerce platforms, and service providers enable banks to offer integrated financial services that seamlessly sync with customer lifestyles, and the expanding banking ecosystem enhances customer engagement and improves the overall banking experience.
In that context, can you tell us about the Commercial Bank technology strategy and how it aligns with overall business goals and objectives under the prevailing economic conditions?
Sumudu: Acknowledging the enduring economic challenges the country will face during its recovery in the coming years, our plans and strategies prioritize both resilience and future readiness.
Our strategy is to migrate customers to Digital channels for regular transactions and offer more advisory services like financial planning, wealth management, and trade services at the branches. To achieve this objective, we ensure our channel experience to be best in the industry and benchmark with the top banks in the world.
We make substantial investments to explore how banking services will evolve in the next three to five years, forming a separate unit called Future of Banking to be ready with the technologies and new business models to support ever-changing business environments. Commercial Bank undertakes multiple proofs of concepts (POCs) to identify how changing technological and business landscapes can offer a superior experience and new services to our customers and potential customers.
As part of our groundbreaking projects, we developed a robust digital ecosystem tailored to our business customers. We prioritize inclusivity, but the low national internet penetration rate, particularly in rural areas, and cultural preferences for in-person banking present unique challenges, and to address these, we have adopted a two-pronged approach, focusing on digital and electronic products and services. This approach allows us to cater to different customer segments and gradually transition them to digital platforms as their IT literacy improves.
Pradeep: Our digital offerings include revolutionary products like ComBank Digital, a fully integrated online banking platform, and ComBank e-Passbook, the first of its kind in South Asia. We also offer ComBank Q+, the first QR code-based app certified by LANKAQR, catering to retail customers and merchants. Recognized for its excellence on an international scale, our Flash Digital Bank Account has received prestigious accolades. It is the first digital bank account approved by the Central Bank of Sri Lanka (CBSL), offering customers a comprehensive suite of financial management and wellness lifestyle services tools, all within a single application. Furthermore, our Flash Digital Bank Account is certified by LANKAQR, ensuring seamless integration with digital payment systems. All our recently issued Point-of-Sale (POS) machines are QR code compatible to enable digital payments. We continuously strive to provide advanced and customer-centric digital solutions, transforming the banking experience for the digital era. The bank recently launched a dedicated marketplace called Commercial Bank LEAP to foster digital transformations among our SME customer base, an initiative in collaboration with IFC and GlobalLinker. This groundbreaking initiative is another first for our country, highlighting our bank’s innovative spirit. Through these endeavours, our bank is actively shaping the future of banking, ensuring that digitalization is inclusive and beneficial to all customers. We remain dedicated to embracing digital innovation and serving the evolving needs of our society.
How is Commercial Bank leveraging digital transformation to enhance customer experience and improve operational efficiency?
Sumudu: As pioneers in the digital payment space, we have introduced numerous technological innovations for retail and corporate customers. Our comprehensive digital solutions for corporates include platforms like “Paymaster” for bulk payments and Internet Payment Gateway (IPG) facilities, making us a market leader in corporate payment solutions. We also offer a range of feature-rich POS machines for businesses and specialized payment solutions like Simple Pay and Mini POS tailored for SMEs and micro-businesses. Our partnerships with renowned service providers like Visa, Mastercard, UnionPay, WeChat Pay, and Alipay enable us to offer excellent services and solutions easily accessible to our customers wherever they may be. Security is a top priority, and we continuously upgrade our comprehensive security systems to safeguard our digital services.
In addition to our digital focus, we also provide electronic services such as ATMs, Cash Deposit machines, Cash recycler machines, Automated Cheque Deposit machines, ABC Centers, and Mini Digital Experience Zones. These offerings cater to late adopters, customers in remote areas, and those less familiar with the technology. We aim to gradually migrate customers to digital channels by popularizing these electronic options.
Pradeep: To assist customers in embracing digital banking, we have introduced “Mini Digital Experience Zones” at selected branches. These strategically placed zones within the customer lobby area offer smart touch panels with product demo videos, smart devices with Wi-Fi access, and Digital Assistants to guide customers through the bank’s digital offerings and facilitate their transition to the digital platform.
Another innovation in the electronic space is our Automated Banking Centers (ABC), available at our branches and standalone locations. These centres offer basic digital services and allow customers to submit loan inquiries and fixed deposit requests. Our focus is on maximizing customer convenience through self-registration processes, multi-lingual support, leveraging the high usage of social media to promote banking services through innovative WhatsApp Banking and Bank with ComBank on Viber and ensuring financial inclusivity.
We believe that these initiatives will serve as catalysts for digital adoption over time, making banking services more accessible and convenient for all customers.
What digital transformation initiatives have the bank undertaken, and how have they impacted operations, bottomline and customer experience?
Pradeep: Through ongoing investments in our digital offering, we have transformed the way that our customers interact and transact with us, leading to an enhanced customer experience. This included the launch of Sri Lanka’s first ‘wearable banking’ product via the award-winning Flash Digital Account, thereby stimulating a new dimension of infinite possibilities for our customers. We also introduced digital customer verification allowing customers to complete verification requirements and gain full access to all the functions of our mobile banking app anytime anywhere.
We augmented the teller experience, facilitated foreign remittances digitally, and enabled secure onboarding to payment portals. The upgrade to our core banking system is helping meet increasing regulatory and business requirements and optimize operations, enabling Commercial Bank to be future-ready.
We focused on automating processes, introducing a centralized procurement system and automated inward remittances and nostro-reconciliations, and real-time monitoring of our extensive branch network resulting in significant cost savings and productivity gains across the bank. We are planning to deploy AI-based interfaces such as a tri-lingual chatbot to help with customer queries and improve customer navigation on our digital platforms. Digital Assistants deployed at all of our branches have been useful in onboarding and supporting customers to embrace the matchless banking experiences we provide with our digital banking solution.
In addition to disruptive digital innovations through collaboration, our vision is to digitize all conventional customer banking journeys and automate internal processes to achieve a fully paperless banking operation.
Looking to the future, what are Commercial Bank’s plans and priorities for its technology strategy and digital transformation efforts, and how will the bank continue to innovate and stay ahead of the curve in an ever-evolving digital landscape?
Sumudu: As already mentioned, the bank is making substantial investments in all aspects of technology, encompassing infrastructure, training and expertise, state-of-the-art cybersecurity measures, and the latest systems and tools such as Artificial Intelligence (AI), robotics, Customer Relationship Management (CRM) systems, and Business Intelligence (BI) systems. Our digital roadmap is a well-thought out plan deeply integrated into our business operations, with extended Return on Investments (ROI) carefully considered and planned for.
We recognize that the digital landscape is dynamic and ever-evolving, where operating environments can undergo significant changes, and technologies can become obsolete due to constant innovations. By adopting a strategic and systematic approach rather than an ad hoc one, we are better equipped to anticipate and adapt to such possibilities, making us more resilient. As previously mentioned, technology lies at the very core of our business, and from the outset, it has been a shared vision embraced by all key stakeholders.
Our commitment to investing in technology extends beyond mere implementation. We place a strong emphasis on building robust infrastructure, fostering a culture of continuous learning and upskilling to develop expertise within our workforce, and implementing stringent cybersecurity measures to safeguard the integrity and confidentiality of our customers’ data. Additionally, we leverage cutting-edge systems and tools, such as AI, robotics, CRM, and BI, to enhance our operational efficiency, provide personalized customer experiences, and derive valuable insights from data.
Moreover, we acknowledge that the digital landscape is subject to rapid advancements and disruptions. Therefore, we actively stay abreast of emerging technologies, industry trends, and regulatory changes. By doing so, we ensure that our technology investments align with future market demands and position us as frontrunners in the ever-evolving digital space.
By adopting a strategic approach and continuously investing in technology, we can effectively leverage digital capabilities to drive innovation, improve operational efficiency, and meet the evolving needs of our customers. This comprehensive approach to technology integration allows us to remain at the forefront of the banking industry and deliver superior services and experiences to our valued customers.
Our vision encompasses the inclusion of all segments into a thriving digital economy, where we strive to maintain our leadership in the digital space. This strategic direction is evident in our vision and mission statements, which place a strong emphasis on achieving excellence through digital leadership. To understand digital success stories in similar markets, we have invested significant efforts in researching international trends and case studies over the years.
We remain committed to creating a digital economy that engages each customer at their level of technological literacy, rather than imposing a one-size-fits-all approach. This customer-centric approach is deeply embedded in the bank’s culture, encompassing both internal and external operations. Even in our Corporate Social Responsibility (CSR) initiatives, we prioritize bridging the digital divide in the country by dedicating a major portion of our CSR funds to nurturing the future generation as IT-savvy citizens through technology education. Instead of focusing solely on product-specific projects, we have established a sustainable IT education journey. It began with the donation of IT laboratories to schools and has since evolved into a comprehensive range of national-level online education initiatives.
The commitment to technology education extends beyond the boundaries of our organization, as we believe that empowering the younger generation with digital skills will contribute to the long-term growth and development of the country. By equipping schools with IT infrastructure and facilitating online education programs, we aim to bridge the digital divide and foster a digitally literate society.
Through these initiatives, we demonstrate our dedication to driving digital transformation not only within our operations but also in the wider community. By nurturing IT talent and promoting digital education, we aim to create a sustainable and inclusive digital ecosystem that benefits individuals, businesses, and the overall economy. By aligning our strategic vision, mission statements and CSR initiatives, we ensure that digital leadership remains at the forefront of our business objectives, fostering an environment where technology plays a pivotal role in shaping a prosperous future for all.