The Customer as Ambassador
For most banks, the term customer service means being at least two steps ahead of the customer. In other words, being geared to be where the customer is, the moment they need financial services.
What’s unique about SDB bank is that our customers are yet some way behind this demographic. A majority of them are bound by physical boundaries, eking out a living from day-to-day. What we do is to inspire, educate, support and nurture them until they too are able to break free and capitalise on the potential that wider horizons bring. In addition, a strong well-financed SME-base that is “banked” contributes towards nation building. They will be able to expand regionally and internationally, while supporting broader national economic stability and growth.
To achieve this goal we focus on three distinct groups:
- SMEs – micro, small, and medium sized enterprises
- Retail – providing financial services to the masses
- Co-operatives – small clusters of individuals who collaborate with co-operative societies in grassroots communities working together to improve their lives and livelihoods
Improving the lives of our customers means using every resource at our disposal, including inspiring our customers to act as ambassadors, converting more of their peers in rural, grassroots communities to take on an entrepreneurial outlook and in doing so contribute towards the country’s economy.
The SME segment
This customer base comprises 33% of our loan book and 20% of our deposits. During the year under review our key focus was on raising business volumes in this segment from 24% in 2018 to 27% – a feat that we achieved by focusing primarily on agri-finance, particularly minor export crops such as fruits, vegetables and horticulture.
While there is high demand for horticultural products – cut flowers and foliage, our studies revealed that the key issue faced by many other SMEs in this segment was the lack of stable value chains. Although they were able to produce good crops, they depended on an unpredictable supply of middle men to take their products to the consumer. Too often this resulted in these smallholders having to stand by helplessly as their hard-earned crops rotted.
Together with other SANASA stakeholders, we decided to focus on improving value chains for five key groups in this segment over the next two years. We focused on growers of pepper and traditional rice during the year under review. We also partnered with big brands such as John Keells Holdings PLC and Brown & Company PLC to provide these SMEs with easier leasing access to tractors and harvesters. 2020 and beyond will see SDB bank focusing more closely on banana growers. SMEs in the tourism and IT sectors will also be in our radar over the next two years.
With 52% of Sri Lanka’s population and 33.3% of SMEs being women, we continued to focus on uplifting female entrepreneurs during the year under review. We provided both technical training and financial literacy programmes to help them improve their businesses.
Our financial literacy programmes focused on the following four sections:
- Savings
- Loans
- Entrepreneurship
- Digital banking
During the year under review we conducted 43 such seminars for over 4,000 participants. Some of these programmes were conducted in partnership with private sector organisations such as John Keells Holdings PLC. (For more details see The Commitment to Society and Environment on pages 69 and 70.)
We offer many products and services that are geared to serve this customer segment. For instance our employees take POS machines right to the doors of these businesses to inculcate the savings habit.
The retail segment
Retail customers comprise 61% of our loan book and 49% of our deposits. This customer base consists of five distinct divisions. Such categorisation allows us to provide customer service that is tailored to the needs of each of the following segments.
- Minors
- Women
- Youth
- Senior citizens
- Veterans
Minors
Inculcating a saving habit among the young has been one of our long-term goals. Over the years we have conducted a number of programmes and competitions to encourage thrifty thinking.
We also conducted 11 seminars for 4,445 grade five scholarship students during the year under review. To ensure that they receive adequate support, we also conducted awareness programmes for their parents and teachers – particularly on the subject of child psychology and how not to put extra pressure on youngsters facing their first public examination.
Our Lakdaru children’s savings account encourages children to save for important events in their future.
Women
Supporting female entrepreneurs, particularly in the 35-50 age group, has long been one of our key focus areas. Many face perennial problems such as lack of collateral and businesses registered in a male relative’s name instead of their own. Education is the key to this segment’s success. While many may not have had much schooling, they have a rich social life within their communities and are able to rally like-minded women in the co-operative and SME segments.
Products such as Athamaruwa, which offers a three month over-the-counter gold loan (as opposed to the one-year period for regular pawning), was launched during the year to support women in the low income segment.
Financial literacy contributes towards financial inclusion, and it is this two-pronged approach that we take to help better the lives of women in grassroots communities. In turn, they enrich the SME segment of the country – the backbone of the economy – and contribute towards nation building.
Youth
We take pride in contributing towards national development by helping to ensure that the aspirations, hopes and dreams of a future generation are met through meticulous financial planning and management. Our programmes for Sri Lanka’s younger generation of new thinkers and entrepreneurs complement their ambitions for success. We help this customer segment to develop and maintain a strong financial strategy through our SDB Jawaya youth savings account.
Senior citizens
We have a long history of catering to senior citizens and this is an area in which SDB bank has a real competitive advantage. 23% of the loan book and 19% of liability book are from this customer segment. Retired and often lonely, these customers look forward to their monthly visit to the branch to collect their pension. At SDB bank we go all out to make the day memorable for them.
Our branch employees make use of the opportunity to encourage this customer segment to think in an entrepreneurial manner. Many have skills and social connections that would benefit SMEs. Getting involved in entrepreneurial activities would also boost this segment’s confidence and sense of self-worth while ensuring that they remained mentally and physically active.
We serve this segment best through SDB Upahara. Going forward we plan to organise free health checks for these customers, and increase their loyalty towards the brand.
Veterans
Thirty years of ethnic strife came to an end a decade ago but, as a country, we continue to salute the brave men and women who gave up their lives and limbs to safeguard the people. SDB bank has long been focusing its energies on ensuring that veterans and their families are not left behind as this hard won peace gives way to economic development.
When a veteran reaches retirement age his or her family’s income drops steeply. The dip in income usually coincides with a time in their lives when funds are more essential than ever. We help our veterans to prepare for significant milestones in their lives and of course their own retirement through a range of financial literacy programmes and our Uththamachara product.
The co-operatives segment
This customer segment comprises 6% of our loan book and 31% of deposits. The Group’s non-performing loans, however, are just 1% compared to 7% for SMEs and 3% for retail customers during the year under review. Such low NPL rates are attributed to the peer-pressure factor, with individuals in each cluster pressuring each other to keep up with their payments so that they can all capitalise from the financial benefits together.
Business volumes for this sector are currently at 17% – a number that we hope to grow to 33% over the near future. In preparation for this push we restructured the Co-operative Development Department at SDB bank to promote entrepreneurship among co-operatives.
Many co-operatives have ready cash, which they bank with SDB bank and then lend-on. The message we began to drive home, during the year under review, was that this is a missed opportunity. By fostering an entrepreneurial culture within the co-operatives, we hope to drive wealth creation and job creation among grassroots communities. While hospitality and food and beverage type services have flourished among certain entrepreneurial co-operatives, we focused on creating awareness about two other areas – medical and fitness. Laboratory services received a satisfactory level of success but gymnasiums did not receive the kind of take up that we had anticipated, driving us back to the drawing board to study better alternatives.
During the year under review, we also strengthened relationships with the co-operatives regulators, organising a forum where all the co-operatives commissioners congregated to enjoy productive dialogue on how to work together to meet common goals.
Welcoming everyone
While we focus on bringing our customers into the digital era we have also worked at ensuring that our branches are welcoming refuges from the chaotic pace of life. The new branding that was launched during the year under review contributed to cool, orderly interiors infused with our corporate colours. With every new building agreement, we renew we will be incorporating the new look and feel to ensure that our customers across the country come to associate us as a beacon in the community.
By the end of the year under review we had also installed 100 internet banking kiosks in co-operatives across the country. Our goal is to bring rural communities into the digital age by ensuring that they learn basic online banking skills.
Towards nation building
While our main goal is wealth creation, particularly for those in grassroots communities, we also contribute towards nation building through the many initiatives we have launched for our key customer groups.
Our Transformation Agenda is closely aligned with the United Nations Sustainable Development Goals. Sri Lanka initiated the Sustainable Development Act in 2017, which establishes the legal framework to implement the SDGs with improved institutional and policy coherence. Under this Act, the Sustainable Development Council has been established, which formulates related national policies and guides new development projects. This takes on added significance for SDB bank given that, for a majority of our clients, meeting SDGs such as Zero Hunger, Quality Education, and Reduced Inequalities are crucial to the betterment of lives. (A detailed outline of our contribution towards the SDGs can be found on pages 69 and 70.)
With the launch of a number of digital platforms during the year under review we are helping to convert grassroots communities into digital bankers while also providing them with greater convenience and access to financial services. The launch of such innovative products
and services has also allowed us to better streamline our operations and business.
New products launched during the year under review include:
- UPay payment app
- SDB Mobile banking app
- Business Internet banking with CEFTS and SLIPS connectivity for SMEs
- Connected to LankaPay ATM network
(For more information on our digital products see The Quality of Manufactured Resources on page 47.)
Delivering value to our customers
Retail products
| Product name | Financial inclusion and financial wealth | Financial literacy and social wealth |
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SME products
| Product name | Financial inclusion and financial wealth | Financial literacy and social wealth |
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Co-operative products
| Product Name | Financial inclusion and financial wealth | Financial literacy and social wealth |
| Loans for Society |
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| Loans for Members Agricultural loan |
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| Equipment/Machinery loan |
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| Export/Import loan |
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| Tech loan |
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| SANASA Co-operative/NGO Savings |
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| Sahanya |
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