Sanath Manatunge, the Managing Director and Chief Executive of Commercial Bank, recently shed light on the bank’s strategies to uplift the Sri Lankan economy. As the leading private bank in Sri Lanka, Commercial Bank is committed to bolstering businesses, particularly SMEs and is embracing digital transformation, showcasing platforms like Commercial Bank LEAP GlobalLinker and ComBank Trade Club to foster business expansion domestically and internationally. Manatunge’s vision for the bank underscores the dual imperatives of digital innovation and sustainability. He envisions a future marked by technological prowess, unmatched customer service, and expansive growth, all while upholding the bank’s inherent values and dedication to sustainable operations. Excerpts of the interview are as follows:
In the context of the current economic terrain, how do you envision the future of banking in Sri Lanka?
It is common knowledge that the country has gone through very challenging times during the past few years, which changed the political and socio-economic conditions of the country. One critical factor that was a catalyst in the acceleration of these conditions was the foreign currency shortage faced by the country. Factors like restricted trade, lenient monetary policies, and a fixed exchange rate escalated debt and external imbalances. After its sovereign debt was downgraded in 2020, the country lost access to international markets, affecting industries, especially banking. With challenges like hyperinflation and increased taxes, banks prioritized the quality of the loan book and supporting their customers to overcome challenges. Despite these adversities and a stifled growth potential, the banking sector persisted with its digital transformation. The industry’s future hinges on political and economic stability, reserve status, international investor confidence, debt restructuring, policy consistency and sustained digital evolution. With banks now outside the DDO, interest and inflation reducing, they can increase lending to priority sectors such as SMEs, exporters, manufacturing industries etc., potentially reviving the economy and facilitating restructuring.
How does Commercial Bank plan to actively participate in the nation’s recovery and champion sustainable growth?
Currently, the country is better poised to re-establish its global stance, thanks to a stabilizing currency and improved macroeconomic indicators, bolstered investor confidence, and growing reserves. However, economic recovery after a downturn is a complex process influenced by various factors. The immediate focus should be on maintaining stability while emphasizing a production-based, particularly export-driven, economy. Commercial Bank is aligning with this approach, especially in aiding trade and SME sectors. Additionally, we prioritize industries like manufacturing, import substitutes, women entrepreneurship and renewable energy. We believe that banks must champion sustainability by funding eco-friendly projects, promoting women entrepreneurs, enhancing financial literacy among local entrepreneurs, and bolstering SMEs. It’s imperative for banks to uphold robust corporate governance, ensuring activities align with legal and ethical standards, and emphasize anti-money laundering and anti-terrorism financing measures.
Given the many hurdles Sri Lankan businesses confront, how does Commercial Bank intend to guide them towards maturation and global expansion?
As the leading private sector bank in Sri Lanka, we hold substantial market shares of the nation’s export trading volumes and import volumes. As a key trade enabler, the bank provides tools that safeguard both buyers and sellers in transactions.
In the SME sector, Commercial Bank has been able to make very significant contributions. According to Ministry of Finance statistics in 2022, 34% of all SME loans given were by Commercial Bank, making us the highest lender to SMEs in the country for the second consecutive year. Recognizing the unique challenges faced by this all-important segment, the bank offered tailor-made financial solutions during the pandemic and the volatile economic conditions that followed prioritizing sectors like exports and manufacturing. We adopt a holistic approach that focuses on mutual growth rather than a purely transactional one in serving SMEs. In addition to support provided to businesses through capacity-building programmes, trade fairs and digital initiatives, we even established a dedicated unit in 2020 to focus on rehabilitation and revival of SME businesses.
To assist SMEs in fostering global trade connections and to make that all-important leap towards the digital businesses space out there, Commercial Bank launched a comprehensive digital business ecosystem: “Commercial Bank LEAP GlobalLinker” in partnership with the International Finance Corporation (IFC). Powered by GlobalLinker, Commercial
Bank LEAP facilitates users to set up online stores, expand their global networks, and access special offers. It’s a secure platform offering services ranging from legal to marketing, and powerful tools to monitor business metrics.
“Combank Trade Club” is another initiative that supports our trade customers through their journey. Members of the ComBank Trade Club benefit from networking opportunities, knowledge sessions, and unique benefits such as preferential finance rates, advisory services, and more. In essence, both platforms aim to help businesses expand, innovate, and remain competitive in a changing global landscape.
What steps has Commercial Bank taken to leverage technology and innovation in banking?
Commercial Bank is a pioneer in the digitizing of the banking landscape and technological superiority is something we proudly own and strategically work towards, as stated in our vision and mission statements.
‘ComBank Digital’ stands at the forefront of our diverse digital banking services, offering customers a comprehensive suite of financial tools. It is Sri Lanka’s number-one digital banking platform with the highest usage and customer penetration. This platform allows customers to manage transactions, investments, and personal loans seamlessly. For our corporate clientele, we’ve integrated features such as bulk payments, tax payments, and more.
Our digital arsenal featuring pioneering products like the ComBank e-Passbook, South Asia’s first, and Q+ Payment App, the first certified app under LANKAQR, the national payment system for QR codebased payments by LankaPay, is designed to be a convenient and hassle-free payment alternative for cardholders and vendors to make and receive payments, taking them to the next dimension of payment options. Our award-winning Flash Digital Bank Account, endorsed by the Central Bank of Sri Lanka, encapsulates a wide range of financial tools in one app. Our commitment to innovation is evident in our recent collaboration with IFC and GlobalLinker to launch the Commercial Bank LEAP GlobalLinker marketplace, focusing on digital transformations for SMEs. We’re shaping the banking future, merging innovation with inclusivity.
Being digital payment pioneers, our offerings span platforms like ‘Paymaster’ for bulk transactions and Internet Payment Gateway (IPG) facilities. We’ve equipped businesses with advanced POS systems and catered solutions like Simple Pay for SMEs and micro-businesses. Collaborations with global giants like Visa and MasterCard reinforce our commitment to excellence and security.
To familiarize customers with our digital milieu, we’ve inaugurated ‘Mini Digital Experience Zones’ across select branches. These zones, equipped with touch panels and Wi-Fi-enabled devices, guide customers on our digital services. Our Automated Banking Centers (ABC) bolster this initiative, facilitating basic digital tasks and financial inquiries. With a spotlight on customer convenience, we champion multi-lingual support, social media integrations, and initiatives promoting financial inclusivity. We aim to ensure that every transaction done at a branch is made possible through banking applications.
Amidst the prevailing economic backdrop, how is Commercial Bank championing sustainable and equitable growth?
As a financial institution, we have a relatively minor direct environmental footprint. Yet, we’ve significantly reduced our emissions and resource consumption by adopting a sustainability-centred approach. By integrating environmental, social, and economic factors, we achieve a comprehensive perspective on organizational performance, aligning with our corporate objectives.
The recent socio-economic challenges underline the need for a robust sustainability emphasis. In Sri Lanka, sustainability is often limited to environmental and CSR efforts. However, it’s a broader discipline involving process, compliance, and accountability. It’s crucial to embed sustainability at the strategic level, rather than merely operational.
Sustainability allows companies to merge their strategies with broader objectives, extending value beyond mere profits. Each organization moulds its sustainability strategies based on industry needs, ensuring alignment with business goals.
Commercial Bank’s green finance vision is ambitious: We aim to dedicate 3% of the loan book to green finance by 2025. Our Social and Environmental Management System (SEMS) helps monitor potential risks from funding activities, ensuring compliance with green financing.
The International Finance Corporation (IFC) awarded Commercial Bank the Climate Assessment for Financial Institutions (CAFI) award for the most climate finance transactions in 2021 and 2022. We finance projects focusing on areas like renewable energy, waste management, and smart agriculture, supporting the UN’s Sustainable Development Goals on Clean Energy and Responsible Consumption.
Commercial Bank is a trailblazer in green financing in Sri Lanka, being the first to incorporate a Green Financing taxonomy and introducing digital banking features to track environmental impact. Our green initiatives extend from supporting sustainable operations and promoting paperless banking to conservation projects like mangrove restoration in Koggala and turtle conservation in Panama. We’ve also sponsored reforestation in the Polonnaruwa District. Proudly, Commercial Bank is Sri Lanka’s first fully carbon-neutral bank which we achieved in 2020.
What is your vision for the bank?
My vision for Commercial Bank aligns seamlessly with our long-term strategic direction to maintain our status as Sri Lanka’s premier financial services organization, leading in technological innovation to provide unparalleled customer experience and expansion across South Asia with the support of the dedicated ComBank team. While pursuing this, we remain steadfast in upholding our century-old values such as integrity, honesty, transparency and good governance. We’re committed to sustainable business practices, ensuring we fulfil our duties as a responsible corporate entity.