With a presence in Sri Lanka for over a decade, leading software and IT services company SunGard looks to make the most of the growth in the country’s economy and is now aiming to take the next step in terms of the banking sector in Sri Lanka by upgrading existing technology that will be able to cope under the increasing strain of growth.
By Cassandra Mascarenhas
“We have concentrated on core banking historically, but seeing the growth in the market economy and the inflow of money into the system now, the ageing technology around core banking is literally creaking under the pressure of growth now, so we are now looking to take the next step in terms of our business treasury management, which will provide banks with more informed decisions around their credit processes,” explained President of Global Banking SunGard David Hamilton-Matthews.
A Fortune 500 company structured around divisional services of businesses, higher education, public sector, availability services and the financial sector, SunGard operates in over 800 customers across 70 countries in the banking sector alone.
Doing business in Sri Lanka has so far consisted of working on online core transactional systems, working with the commercial and retail banks, developing deposit loan accounts, and building up ATM transactions that flow through their systems which in turn help the banks support their customers.
In the decade that they have been operating in the country, Hamilton-Matthews explained that they had dealt with a lot of uncertainty, which has now diminished. The most obvious trend has been the rapid branch expansion of many financial institutions especially in the north and east of the country, which in turn will allow new money to flow into the banking system.
The number of banks in the country will have to deal with the inflow of commercial consumers and be able to provide a reasonable return on the funds that people invest and although lending activity has been a little slow to start picking up, he noticed, would pick up as the economy gains more confidence.
Global trends have remained very much the same over the last five years with many companies now focused on inward returns. The financial crisis has also led to companies getting back to basics as customers now need reassurance from such organisations. Banks globally, in the US, Middle East, Asia have invested heavily in organisational structures aimed at getting closer to the customer and rebuilding trust with them.
Staff has been another key trend, where companies now question if they have the right level or the right number of staff in the right place.
“It’s an interesting point because wherever I’m talking to bankers, whether it’s in the Middle East or Asia or Europe, the message is consistent, the message is all about growth. Every banker that I speak to is talking about growth where the organisations would like to see growth and what strikes me is that I think about the talent and the human capital required to execute on that and I wonder about where this talent will come from,” he said.
When talking about staff, it’s about staff in the banks working as efficiently as they can, but there is also some emphasis based on talent management, making sure that banks not only preserve the talent they have today because it’s going to be an increasingly competitive market when it comes to talent, but also preservation, making sure that they groom the talent that they do have in the right way.
These are the three big trends – an emphasis on rebuilding trust with customers, the second one being capital management and making sure that the capital allocation to the bank is made, that the risk adjusted bases are getting the return that they are looking for, which is something that is becoming harder and harder with the changes in the regulatory and the economic environment and the third area is staff which has two dimensions to it.
Moving onto his thoughts about the performance of Sri Lankan banks so far, Hamilton-Matthews, who has observed the Sri Lankan banking market for little more than a decade, thinks the market is a very resilient one and it has had to be resilient given the civil and economic climate.
This resiliency has served the industry well with respect to the global financial crisis through which Sri Lanka as a country and as an economy has fared fairly well in comparison to some of its Asian counterparts.
“So in terms of outlook, the industry has managed to do a good job getting through the turbulent times. In terms of performance, I think that Sri Lanka’s resiliency and ability to make it through turbulent times has allowed it to develop some capabilities in its systems, organisations and management decisions to perform very well under very difficult circumstances and I think we are beginning to see that performance begin to show through. We are seeing all the right movement in terms of trends in performance, loans, and profit growth and so on here,” Hamilton-Matthews praised.
Speaking of Sri Lanka’s position in terms of technological breakthroughs, although the country may have not been at the top of the game, the President of Global Banking thinks that the country has done a good job and has adopted new technologies at the right pace and is now moving from a phase of early adoption into mainstream adoption.
A lot of investment from the telecommunication industry and the IT vendors is also helping the industry with challenges such as mobile banking and a mobile workforce. They are moving from a stage of experimental investments into a stage where there would be some kind of mainstream adoption of technology.
The country is currently experiencing a lot of investment in new technology and also have more consumers demanding more banking services through their mobile and this demand in will shift into the commercial corporate space in due time as well.
“We see Sri Lanka as an important market in the long term for us, it is not a market we fall back on during good times, but we have been here throughout and have been a good partner in the long term. We have a very broad portfolio of services and banks like to deal with just a few trusted partners, which is what we hope to be,” Hamilton-Matthews clarified, when discussing the role SunGard hopes to play in Sri Lanka’s future.