HNB to redefine retail banking through technology and service innovation

The exponential development and proliferation of information and communications technology within the past decade has revolutionised the way in which we perceive, interact and transact with each other. Today, more than 40% of the world’s population is connected to the internet, a factor which from an economic perspective has provided people from all walks of life with exposure to greater levels of convenience and choice. 

Such dynamics are anticipated to build a more inclusive and empowering experience for consumers while generating unprecedented new opportunities for institutions that are capable of adapting to these new dynamics, and making them an integral part of their future strategy.

From a Sri Lankan perspective, HNB has consistently expanded on a steadfast reputation of retail banking excellence through digital innovation and pioneering service delivery. Speaking on these general dynamics and the opportunities they create, HNB Deputy General Manager of Retail and SME Banking Thimal Perera elaborated on the significance of these changes for the Sri Lankan banking sector and the pioneering initiatives undertaken by HNB in that context. Following are excerpts:

Q: To begin with, could you speak about some of the key dynamics powering change and development in the Sri Lankan economy in general and more specifically in the banking sector? 

A: In many ways Sri Lanka is a nation in transition, whether itis from the perspective of our economic performance and outlook or in terms of social development and the increasing sophistication of general living standards and life styles. Of course there are numerous factors at play but one of the most interesting developments that we see is the growing ubiquity of technology in Sri Lanka. According to the most recent data, as many as 5.7 million Sri Lankans are now actively connected to the internet and mobile and smart phone penetration is similarly on the rise and among some of the highest in the region. Particularly among Sri Lanka’s youth, we are seeing a truly unprecedented level of integration of technology into their daily lives. 

Such a connection, to what can only be described as a global phenomenon, is gradually but inexorably changing the way that Sri Lankans in general and younger demographics in particular perceive and interact with the wider economy. We can see this in the way that social media for example has taken root in popular culture but on a more subtle level, we also believe that this exposure to a global culture brings with it a change in the general expectations that people have with regards to education, healthcare and naturally to banking as well. 

Personally I believe that the potential access to information that the average Sri Lankan has at their fingertips is an extremely empowering feature of technology that is re-defining what is expected of brands not just in terms of product offerings but also in terms of service delivery. This is generally true across every sector in the Sri Lankan economy and perhaps even more for the telecommunications and banking sectors. 

Q: In that context, what has HNB’s experience been in terms of keeping abreast of such changes?

A: Generally speaking HNB is very much a deeply customer-centric organisation as evidenced by the kind of recognition that we have consistently won for our efforts not only in retail banking but in most of our other verticals as well. HNB has won the Asian Banker Award for the Best Retail Bank a total of eight times in the past nine years, including in 2015. As a strategically important Financial Institution we continue to set new benchmarks in our industry.

HNB’s ability to regularly integrate new technologies into its business model has played a very important role for our on-going success – be it in terms of payments and cash management (PCM), trade financing and internet banking facilities in our corporate banking segment, supply and distribution financing for SME clients or the cutting edge internet and mobile banking platforms developed for our retail banking segment. 

The most recent product of this substantial emphasis on technological innovation can be seen through our ‘New World Banking’ integrated marketing campaign that we leverage to build greater awareness and adoption of the pioneering augmentations to our product and service offering.

However we believe that increasing our technological capabilities must go hand-in-hand with a continuously refined service offering. As I stated before, the expectations of the average Sri Lankan customer is changing and with it we are cognisant of the need to adapt in such a way as to meet these expectations and where possible, create entirely new standards of customer service that will further solidify our position as Sri Lanka’s leading Retail Bank.

Q: Focusing on HNB’s service delivery, what are some of the initiatives that the bank has implemented in the recent past? 

A: The traditional approach that the Sri Lankan banking sector has taken to was based on a somewhat mechanistic model. By focusing on brick-and-mortar expansion, most banks have sought to create a physical network of branches that would serve to draw in new customers. HNB itself was very much driven by this model and today we operate across 250 locations island-wide but very quickly we learned that while merely establishing a presence could serve to draw in some new business, we could also substantially increase the volume of such business by not simply waiting for customers to come to us, but instead taking our business to them. 

This means that our business development teams have actively sought to forge truly personalised relationships with our customers in order to build a deeper understanding of their needs and go theextra mile in terms of shaping our products and services to effectively address those needs. Given the rich 128 year legacy of HNB and its systemic importance to the Sri Lankan banking industry, this new approach has enabled us to meaningfully benefit the lives and aspirationsof people across the island using our branch network as a series of individual, yet inter-connected hubs from which to engage with families, businesses and communities, meet with them at their convenience and work together with them to meet their every banking needs. 

During the past 18-24 months in particular, we have worked hard to revitalise our organisation’s culture with an even more customer-centric mind-set while also encouraging each of our branch managers to get to know their customers and to understand their financial needs in order to deliver personalised, effective banking solutions that go way beyond mere transactions. Given the limited effect that marketing and promotional campaigns can have, moving forward we believe that this emphasis on relationships and service excellence will be what helps keep HNB ahead of the pack.

Q: What are the business areas that HNB has been able to maintain leadership position in? 

A: We believe we maintain leadership in all verticals – be it Retail, SME or Corporate. However with reference to Retail Banking one of our key areas of focus has been in the housing loan market through our Shanthi Home Loans product. Through the formation of tri-partite agreements between the bank, developers and the customer, we have been able to dramatically streamline the home-loans process through the introduction of new features such as a three-day in principle approval process. 

Working through tie-ups with related construction industry suppliers and service providers HNB has been able to secure valuable benefits for its customers in this area while simultaneously working closely with specialised service providers in order to speed up the legal and title search process as it relates to the obtaining of title deeds and other related processes. Additionally, the bank also provides the ultimate in convenience through its highly skilled mobile mortgage advisors who are able to meet with customers and potential customers at their convenience to discuss home financing and the many different ways that HNB can work with them to help achieve their housing dreams. 

Both our issuing and merchant acquiring credit card business segments have been another important growth area for HNB, with our popular, tailor-made offers and benefitpackages and our regular seasonal discounts providing valuable discounts for our customers ranging from 10% to as much as 50%. HNB also has clear market leadership in the Leasing segment. It is a portfolio that has seen rapid growth and we were able to double our portfolio making us the largest among all banks in operation in Sri Lanka. 

Q: Could you describe HNB’s approach to technological innovations and how this has been leveraged to refine its own product offerings and service delivery? 

A: At the outset I think it’s important to note that we don’t just seek to innovate for the sake of innovation. As I said before, we have a very deep focus on understanding and addressing customer needs be it current or future and our emphasis on technological innovation is similarly geared towards providing powerful, tangible outcomes for our customers. With the rapid proliferation of information and communications technology and related services we are currently witnessing a revolutionary shift toward e and m commerce on a global scale. 

While there will certainly be a lag-period before we see the kind of ubiquitous technological integration that is already present in advanced economies, we are confident that Sri Lanka is well on its way towards comprehensive, end-to-end integration of digital banking solutions. 

The ground-work for such integration can be seen even in the telecommunications sector where digital wallets are already seeking to imitate and replicate banking functionality and we believe that much more can be done from the banking sector to similarly expand digital payment platforms in the future. 

There has been a whole raft of digital innovations that HNB has pioneered in the industry. Primary among these have been our invention of the MOMO – the mobile POS product that has revolutionised the outdoor sales and delivery industry. Among the more interesting developments coming out of this technological rejuvenation for HNB has been the creation of youth prepaid cards that take financial transactions between parents and their children to an entirely different level. 

It allows the parent to maintain total oversight over where the card gets used, and providing SMS notifications of transactions while also allowing for remote balance top-ups. 

This creates a win-win situation, allowing children the ability to conveniently transact, whether that takes the form of movie tickets, or visiting a bookstore for example while ensuring that parents can monitor and strictly control what their children are able to purchase, thus providing convenience and peace of mind and most importantly teaching our children financial discipline at a very early stage in their life.

Another ground-breaking use of technology from HNB has been our inland remittance service through which HNB customers can use our wide-reaching network of ATMs to make payments to anyone, anywhere in Sri Lanka. 

This service was developed in a similar manner, by identifying gaps in market needs and conceptualising simple, yet effective solutions to fill those gaps. In this case, we took note of the significant proportion of Sri Lankans that are employed in Colombo or in other urban centres around the island, while their families live in outstation areas. 

Through this service such customers need to only visit an HNB ATM or use a mobile device to wire money quickly and conveniently at any time of day or night. The system is set up with a dual authentication process to ensure optimal transaction security and minimise the potential for fraud where the recipient receives part of a pin number on his mobile device via SMS and the sender gives the other part of the code through which a card-less transaction process is able to retrieve money from the ATM. These are just a few examples of the kind of practical-minded innovations that HNB is introducing to the Sri Lankan market, bringing unparalleled customer convenience.

Another exciting and truly cutting-edge innovation from HNB has been the introduction of Augmented Reality technology. This New World Bank experience is yet another example of how HNB is leveraging next-generation technology to extend our brand into the digital space and we are extremely enthusiastic about the opportunities that this new platform will generate for HNB and its valued customers moving forward.

Q: Some of the technological innovations that you have described seem to be incremental while others seem completely radical. Is the Sri Lankan consumer ready for these innovations and what can be done to further prepare them? 

A: I would have to say yes, and no. On the one hand, there is a substantial percentage of our customer base that is extremely keen to get on-board with the very latest in digitally-led banking innovation and this is not purely restricted to younger consumers. The sheer convenience extended to customers through our digitally augmented products and services offers an extremely compelling incentive for customers from all walks of life and this is a rapidly expanding proportion of our customer base. 

But at the same time, there is a learning curve for any new digital product or service and it is very natural for those customers that are used to more traditional, face-to-face banking experiences to feel some resistance towards new technologies. For our part, we continue to place great emphasis on sincere, friendly and personalised customer service, as we touched on before but HNB is also focused on taking whatever steps are necessary to reduce the learning curve for digital customer services. 

This is accomplished both through the careful attention we assign to the development of our digital solutions to make them as user-friendly as possible, and we complement this by training our staff on how to guide users and ease them through the process of using these digital services and help our customers to understand these systems and the convenience they bring for themselves. 

Ultimately, it is all about providing the widest choice for our customers in how they choose to bank and we believe that HNB is emerging as a trail blazer in terms of building an integrated, hybridised service offering that offers the best of traditional and digital services and this approach will be what sets us apart as Sri Lanka’s Bank of the Future, and brings to life the tag line of our recent corporate campaign Banking Beyond Transactions.