“Promote Sri Lanka to bag opportunities”: CISI CEO

Visiting Chartered Institute of Securities & Investment (CISI) CEO Simon Culhane applauds Sri Lanka for the vast improvements it has undergone since the end of the 30-year war.

However, pointing out that there is more room for improvement in the country’s financial service industry, he opined that the nation is not promoting itself enough to bag opportunities that will help economic development.

In an interview with the Daily FT, Culhane spoke about the progress of CISI, and his view of the economy and the financial service industry of Sri Lanka.

Following are excerpts:

By Shabiya Ali Alham

Q: How has the performance of CISI in Sri Lanka been so far?

A: It’s been good, but we could probably do a lot better. It’s been slower than we expected, but we have had very encouraging results recently. We have done good work with the stock broking and the Colombo Stock Exchange. We do have a growing number of students, but it has taken us longer to reach where we wanted to be. I think it is possibly because we need to explain to people what we do, our brand and make a more direct link with that.

We need to communicate the fact that when you opt for one of our qualifications, you will be more employable in the financial sector. So I think we need to do a bit more explaining to get that across.

We have two aspects in our business. One that promotes qualifications, and the other hand, Sri Lanka is also the operations base for all our work in Asia and the Gulf. That part has been terrific since we have employed 15 people in our office here which started off with three people. The quality of the staff we have has exceeded our expectations.

Q: What are the new initiatives taken by the CISI to uplift the financial service industry in Sri Lanka?

A: We are offering a much wider series of qualification here. For example, risk is one of the important aspects of finance world, so for this we are setting up risk forums. Also with some of our training partners we are making much emphasis on risk programs to a wide number of professionals.

On the other hand we are also looking forward to do some work with the Ministry of Education to help get across financial understanding at an early age. We are having a new module called ‘Fundamentals,’ which will help our students to understand about the financial industry, the role of stock market, capital, and importance of risk in everyday business judgment.

We have also partnered with the Sri Lanka Foundation Institute, where together we are doing financial compliance, which is another crucial element. This talks about stability and financial confidence in the finance and banking industry. This is important since if you don’t have confidence the finance and banking industry, people will not do business, and its impact must be realised.

Q: So are people losing trust in banks and financial service industry?

A: Certainly in the West it’s true. The reputations of banks in that region are very low as there have been a series of scandals that has made the rating of acceptability to about 11%, whereas in other sectors, such as the medical, has an acceptance of 86%. In the West, the banks are in big trouble and that has required them to have a big structural corporate, and most importantly, cultural change. It means that no longer is short term, or dash for cash, going to work. It is about recognising banks and business, along with other stakeholders, to maximise the long term outcome.

Q: In your view, how is the level of trust in financial and banking sector in Asia?

A: Asian banks are much more trustworthy. The banks in the region have a very high acceptable ratio, which in the range of 80% to 90%. In Asian banks, it is not as hysterical as what the West is going through.

Q: Globally, what are the issues prevailing in the financial service industry?

A: One of the main issues is the retention of trust and professionalism. A professional person is one who has the right knowledge, applies the right skills and at the same time, behaves properly.

The key elements are knowledge, skills and behaviour. This intersection is what a professional is. There is a huge drive now to increase professionalism in the financial service arena. And this in turn means raising standards by gaining, maintaining and increasing the qualification one would get. A large number of regulators are mandating a certain number of learning hours for a year for those who are in the industry. Singapore, the Gulf and many countries in the West have this in place. Having better behaviours is the biggest thrust that most regulators are looking at, I must say.

The thing here is that many countries want to raise standards of their industry. What happens here is that they want to raise the basic level of standards but what they need to realise is that they have to do this for those who are in the industry and for the new entrants as well.

Q: How does the CISI qualification help those who reading for the qualification to tackle these issues?

A: We are offering this qualification for 40,000 people a year at entry level and advanced level where it is giving them the basic knowledge. For those who are members, we provide a huge opportunity to keep their knowledge up-to-date. We have over 50 e-learning subjects and we also have through applications about 50 seminars available per year, so that they have access to the latest information from good speakers from key learning centres. CISI allows one not only to have the knowledge but also allows one to stay up-to-date.

Since this industry has a lot of work to do in terms of its integrity, core members will have to subscribe to a code of conduct and from next April all students will have to take an integrity test. We set very high standards and we believe that we have to do the right thing before we talk about profitability.

Q: With turmoil in the financial markets, what are the challenges for wealth managers?

A: It is interesting that we talk about it this week, since the stock markets for the last two week were at an all-time high. Wealth managers just need to apply the basic principles and look at the fundamentals of what they are doing. They know the requirements of their clients, their appetite for risk, and they should provide professional advice and not just follow the herd.

Q: What is your opinion on the financial service industry of Sri Lanka?

A: I would say that there are a few encouraging signs here. This week, the relaxation of the rupee remittances for foreigners is a very good sign of confidence in the market and that will lead to a greater investment. The asset management industry here is too young and this all goes back to how you can encourage people to save. Saving, pensions, and future financial security is all wound up. It’s coming along and it is getting better.

However, there is still a lot more to go. For example, there is not quite yet much encouragement for retail advisors to upgrade their skill levels. Nevertheless, the industry has very much improved in the short time I have been here, but there is certainly room for improvement.

Q: What is your opinion of the economy and where do you think it is heading?

A:What I can tell you is that Sri Lanka has a lot of room to think positive. One of the problems this country has got is that it is not selling itself as well as it could externally. To give you an example, I was in Singapore earlier this week and I was made aware that at least 1,000 jobs are being transferred to India over the next 12 months. I asked the people who were responsible for decision making why they didn’t look at Sri Lanka. To my surprise, they hadn’t even thought about it. Sri Lanka has all the requirements of getting those jobs since the country has a willing and able workforce, good and growing infrastructure, cost economies and good air transport.

These were good reasons for them to shortlist Sri Lanka, but they don’t think that since they are not yet aware of the change Sri Lanka has witnessed in the last five years. If I had any advice to give, I would say, externally, the country has to explain to the world a bit more of the benefits Sri Lanka can offer. I believe that this is a winning nation against other countries, even India. If you cannot get to the shortlist, you are never going to land some of the jobs.

I often find myself actually having to sell Sri Lanka to other businesses since I meet many decision makers. When I recommend, they ask me, ‘is the trouble still there?’ They are not very aware. When you analyse why they go to India, you can actually put a parallel and a better reasoning why they should come to Sri Lanka.

You have the key ingredients in place, but you have to tell people more. The Ministers and the Governor should meet the top 15 people of a country that they are visiting to promote the country and the benefits it offers. There are lots of opportunity for Sri Lanka, especially in the financing operation world, where your natural competitors will be, India, Vietnam and Philippines. In every case, Sri Lanka has a very good argument as to why it should be getting its fair share.