The banking sector is faced with a constantly changing external environment and customer preferences, innovations in banking products and FinTech, as well as a rapidly evolving technological landscape. Such circumstances call for a comprehensive strategic plan, in addition to significant investments in technology, which can help face the challenges of the short, medium and long term. DFCC Bank has responded to such daunting circumstances by adapting its business model, including investments in an ultra-modern technological infrastructure, to respond to the changing environment. This has been carried out with due consideration to stakeholder relationships, material issues, as well as the vision, mission, and values of the Bank.
Vision 2025, which was unveiled in 2019, outlines the strategic objectives and the goals to be achieved by 2025, which are: to be among the top five LCBs in Sri Lanka, achieve a LKR 1 Tn asset base, grow the customer base to two million, and become the most customer-centric bank in Sri Lanka by being data driven and digitally enabled. In addition, Vision 2025 is built upon three strategic pillars: enhancing customer-centricity, becoming a top-of-mind retail bank, and optimising key customer-facing operations.
The Bank’s investment in a state-of-the-art core banking system holds the key to the future, which will also facilitate sustained investment in people, processes, and the tools to implement the strategy, and monitor progress. DFCC Bank’s ambitious digital-first approach received a significant boost, when pandemic-induced travel restrictions accelerated the shift to digital platforms. Customers too were quick to embrace the new technologies, while being on-boarded through digital verification via DFCC Video Chatz. The adoption of Google Workspace played a crucial role in the staff’s shift to working from home, while streamlining operations and ensuring data security. This also set the foundation for the envisaged roll-out of innovative products in the year ahead.
Though Vision 2025 strategy was formulated in 2019, it was crafted with built-in features to facilitate agility and flexibility, in order to accommodate advances in banking products, technology and customer preferences. This strategic vision was put to the test during the pandemic and resultant changes in the working environment. Coupled with the core banking system, this far-sighted strategy enabled the Bank to accelerate the implementation of a number of processes to accommodate the new restrictions and requirements of that period. This also assisted in the re-engineering of working processes to adhere to the new guidelines, controls and directions issued by regulators.
A “Digital-first approach”, which was widely assumed to become the norm in banking by 2025, received a tremendous boost during the pandemic, based on sheer necessity. This led to the widespread adoption of this approach, five years ahead of schedule. As DFCC Bank had already mapped out strategies and processes to face this eventuality, the almost overnight shift to working from home was accomplished with considerable ease. Due to the changed operating environment, as well as imperatives of the economic situation, the Bank was able to re-evaluate and prioritise sectors which required special attention. Critical sectors such as agriculture, pharmaceuticals, ICT, education, services, construction, infrastructure and exports, in addition to other essential sectors were given greater attention.
The “War Room” initiative, which was set up at the onset of the pandemic in 2020, was carried over into the current year. The War Rooms on Deposit Mobilisation and Moratorium Management concluded in 2020 on the realisation of intended outcomes. War Rooms on Alternate Channels and Cost Optimisation continued in 2021.
Alternate channels became the default mode of delivery, due to the disruptions caused by the pandemic. Such channels embraced by the Bank during the pandemic include cards, as well as the Contact Centre. The Contact Centre played a crucial role in serving customers remotely, especially during the digital on-boarding of new customers. Existing customer-facing processes continued seamlessly, in addition to proactively reaching out to customers to create new business opportunities for the Bank.
Cost-saving activities were brought to the fore across the Bank, focusing on improving the Bank’s cost-to-income ratio. Productivity gains, process improvements and avoidance of potential waste were pursued wherever possible. An example is the Bank’s commitment to reduce paper usage significantly by 2024.
The climate of uncertainty of the previous two years is likely to persist well into the next year and beyond, due to the unpredictable nature of the COVID-19 virus and its mutations. The Bank will sustain its focus across all sectors, especially on SMEs which have been earmarked for enhanced development, in keeping with the Government’s goals, and supported by the DFC credit line from the US. Exports and services, whose development will be critical for post-pandemic recovery, will be targeted with special programmes.
DFCC Bank is also open to the concept of “reimagined” working styles, as virtual work platforms and tools gain traction in developed countries as an alternative to traditional office-based work. The success of digital-based banking during the pandemic opens up possibilities for working from home or similar, flexible working options.
The Bank will strive to improve its stable and low cost deposit base through a retail focused strategy while leveraging on alternate channels like digital and cards to grow fee incomes. Managing NPLs and improving cost effectiveness of internal processes will be a priority to ensure asset quality and operating margins. DFCC “Pinnacle” proposition, aimed at high-net-worth customers, continues its successful role in elevating the Bank’s image as a top-notch purveyor of bespoke services to discerning clientele, with a sophisticated outlook and understanding of the latest financial products in the market. The DFCC Pinnacle proposition will be expanded to other parts of the country in the year ahead.
The Bank’s commitment to sustainability will form a significant basis for all aspects of operations, as it works towards strengthening its image as the preferred banking partner for “Green Financing” by 2030.
As Vision 2025 has already been tested and proven as a future-driven and resilient strategy, the coming year will pave the way for DFCC Bank to consolidate its position as a data-driven, digital-first bank with a customer-centric approach.