Roger Norton, Country Head of Transaction Banking at Standard Chartered Sri Lanka, delves into the future of banking in the country, navigating through macroeconomic hurdles. He underscores the criticality of digitization, risk management, and cultural adaptations within the industry while shedding light on Standard Chartered’s inventive strides in trade finance and partnerships with tech entities like PickMe. Norton’s insights illuminate how technology is fundamentally reshaping Sri Lanka’s transaction banking arena.
As the head of transaction banking at Standard Chartered, can you take us through the factors shaping the future of banking?
The banking industry is expected to undergo greater transformation given the series of macroeconomic shocks the country has been through since 2019. We can expect a potentially sustained after-effect in the short to medium term as we look to grow on the backdrop of higher risks, higher costs and slower-than-desired demand.
History teaches us that opportunities and quantum changes emerge through adversities. As a result of the pandemic, we were able to digitize nearly 100% of payments and cash management transactions. A staggering 80% of our trade flows are digitized as well, pushing Sri Lanka to No. 01 in the digital trade race across all markets in Standard Chartered.
The future of banking will continually evolve more rapidly to meet the changing needs of our clients. Some of the standout factors to manoeuvre through can be seen as follows:
- Rising Risks – As clients look to rebuild alongside our stressed economy, credit risk management in particular will be crucial to maintain a steady balance sheet growth and retain depositor confidence.
- Tech Upheavals – The financial technology landscape and how equipped banks will be to rapidly respond through innovative solutions will be crucial. A robust and nimble core technology stack is fundamental to pivot more rapidly towards where clients may head in the future. We just rolled out our brand-new cash operating platform, which is far more agile and geared to be easily upgraded or externally integrated.
- Culture Shifts – The cultural change banks will need to go through to tackle the future will be significant. Nurturing and growing the right mix of talent from a creative and technical leadership standpoint will be crucial.
- Capital – Also, the availability of capital to continuously invest in the right combination of technologies will be a game changer to avoid strategic drift.
How do you define your role, and can you give us examples of how you are leading innovation in trade finance at the bank and why it is so crucial?
My role entails the development and commercialization of products that deliver transaction services to our corporate and institutional clients. Driving a steady balance sheet growth through cutting-edge payable and receivable solutions, coupled with seamless working capital options is native to the strategic priorities of transaction banking.
A key aspect of our success lies in our ability to converge products and technology seamlessly to create better client experiences. For instance, traditional trade finance requires the submission of documents, whereas many of our clients enjoy the disbursement of working capital loans by simply transmitting data from their ERP systems. We have expanded such capabilities to a host of industry-leading clients who draw working capital financing on the go, across various touch points in their supply chain. Digital warehousing and automatic financing of invoices on due dates is our latest enhancement in this space.
The latest version of our digital letter of credit (LC) interface was added to address the growing demand for LCs. We also rolled out a global document tracking service and the latest version of our shipping guarantee interface, allowing our importers to gain faster access to their goods.
Can you take us through the evolution of the bank’s collaboration with PickMe that led to the award-winning API solution, allowing merchants and ride partners to get instant payments?
We took Digital Mobility Solutions (PickMe) on a journey of matching products to their business evolution from initial web connectivity to an API-driven instant transfer landscape. We accelerated our world-class interface once we identified a need that can only be addressed through API-connected instances. Standard Chartered’s timely solution allowed driver partners to call funds available in their PickMe wallets by simply clicking on their application profiles to instantly trigger fund transfers to their predefined local bank accounts and withdraw funds through the nearest ATM.
A second award-winning phase of our API-driven solutions was our capability that ensured corporate clients enjoy instant top-ups to their wallets with PickMe. Our virtual account capability captures the inward CEFT transferor details on the Standard Chartered bank statement and instantly updates PickMe’s back-end platform through API credit notifications.
How do you see the transaction banking industry shaping up in Sri Lanka, and to what extent will technology influence this road map?
The digital penetration in transaction banking will only keep expanding to all corners of the business. At the front end, banks will have to be reachable through mobile devices that incorporate biometric recognition and two-factor authentication, given the growing cyber risks. It is also advisable to prepare for a cashless transaction landscape. The aim should be to simplify digital financial exchanges to an extent where language or literacy will matter less.
Among the many technologies that are too many to discuss here, generative AI and large language models (LLM) will redefine how we prioritize our relationships and fully digitize our service delivery to clients. For example, LLMs can digitize the seemingly impossible documentary trade aspect to read and automatically process large volumes of bills. Regulatory protocols can be validated on cash and trade payments through algorithms to achieve straight-through processing on all fronts.
The pace of automation will accelerate rapidly towards a fully digital landscape once such advanced technologies reach acceptance by regulators and banks, creating more time to serve clients.