Q: How can businesses endure the impact of the coronavirus pandemic?
A: The disruptions caused by COVID-19 are unprecedented in their range and intensity. For most, the priority at the beginning of lockdowns was ensuring business continuity. Systems had to be implemented so that employees could work from home (WFH) while ensuring adequate health and safety protocols were needed for those reporting to work.
Similarly, corporates had to maintain clear communications with customers to pursue whatever business was possible. New cus- tomers, markets and business had to be uncovered.
We witnessed ingenuity with many home delivery services springing up overnight, others turning to online platforms, and some apparel manufacturers shifting from high fashion to personal protective equipment (PPE).
As we approach the one year mark of the pandemic, these trends have continued to gain traction. With the upcoming islandwide vaccination campaign, the end of COVID-19 is in sight but a difficult few months are ahead.
It’s important to remember that some of today’s most suc- cessful businesses were launched during the global financial crisis of 2007/08. There are still opportunities in this difficult time.
The curtailing of imports is encouraging demand for domes- tic substitution. Entrepreneurs must move with the market, be innovative, digitalise and optimise costs – especially given the rise of a robust digital payments ecosystem.
There are many emerging opportunities for those with agili- ty and ingenuity. If businesses can prove their viability, low- cost funding will be more readily available.
Once the vaccination campaign is completed, there will be a major rebound so businesses must prepare accordingly.
Q: How do you view the WFH phenomenon?
A: Employees’ safety is our utmost priority. During the lock- downs, we facilitated as many of our teams as we could spare to WFH. As ours is an essential service how- ever, teams needed to work in branches under strict safety protocols.
For those who worked from home partially or throughout, the benefits were undeniable. They wasted no time on commuting and enjoyed major cost savings. Staff who main- tained disciplined schedules could complete their work quicker, and spend more time on themselves and personal commitments.
However, WFH also introduces unique challenges. While video-conferencing helped keep our teams in constant contact, it also impeded productivity and many felt their effi- ciency was compromised.
While these tools were useful, I think we all have a greater appreciation for meeting in person. When we beat this pandemic, I’m certain most will be eager to return to the office.
For those who worked from home partially or throughout, the benefits were undeniable. They wasted no time on commuting and enjoyed major cost savings. Staff who main- tained disciplined schedules could complete their work quicker, and spend more time on themselves and personal commitments.
However, WFH also introduces unique challenges. While video-conferencing helped keep our teams in constant contact, it also impeded productivity and many felt their effi- ciency was compromised.
While these tools were useful, I think we all have a greater appreciation for meeting in person. When we beat this pandemic, I’m certain most will be eager to return to the office.
Q: What opportunities is Hatton National Bank (HNB) looking to pursue this year?
A: The acceptance of digital services has reached an unprece- dented peak. While this trend was driven by necessity at the onset of the pandemic, convenience and versatility will sustain it. With an economic recovery anticipated this year, the govern- ment is focussing on supporting segments such as agriculture, dairy, pharmaceuticals, vehicle repair, IT and renewable energy, emphasising local manufacturing, exports and entrepreneurship. As such, we see opportunities in partnering with these criti- cal sectors to support a grassroots led resurgence.
Q: And what are the bank’s priorities in the short and medium terms?
A: Over the short term, our priority has been to support SMEs and corporates so that when the economy rebounds, they’d be equipped to aggressively pursue opportunities.
As for the medium term, this means that our investments in terms of people, systems and processes are expanding. We must ensure that we’re future ready as this will have a multiplier effect on growth.
Compared to SAARC, Sri Lanka lags in e-commerce and digital payments. Therefore, facilitating a robust digital payments ecosys- tem is essential to our strategy. As a leader in this field, we consid- er it our responsibility to set the pace on the uptake of these plat- forms.
We’re constantly refining our digital offering through ground- breaking products such as our versatile QR code-based digital pay- ments app SOLO.
HNB is also a leader in card payments, combining POS devices and popular low-cost Bluetooth card payments solution MOMO, along with our internet payment gateway (IPG) systems in partner- ship with global leader CyberSource.
By leveraging these components simultaneously, HNB aims to promote a digitally driven economic renaissance.
Q: What are the main challenges facing the banking sec- tor?
A: Even prior to the pandemic, asset quality across the banking and non-banking financial sectors were under pressure owing to the sluggish economic performance in 2019. These conditions were exacerbated by COVID-19.
While the moratoriums extended until the end of March will
enable some companies to sustain themselves, the possibility of another wave could prolong this.
In the interim, we can expect an extended period of low interest rates, and reduced economic and trade activity – all impacting our ability to generate income.
As such, our focus will be on maintaining asset quality while supporting customers affected by COVID-19 in reviving their businesses and livelihoods, by ensuring focussed and quality lending, and efficient recoveries.
Q: How can Sri Lanka improve its global competitiveness?
A: One of the most essential and potentially impactful solutions would be drastically simplifying business registration.
According to Advocata Institute, 97 percent and 85 percent of micro and small businesses respectively are registered as sole proprietorships. Meanwhile, three percent of businesses surveyed are registered as partnerships and two percent as private limited companies.
The main reason is that the registration process is long, tedious and convoluted.
Through low level digitalisation, we could streamline this, encouraging more existing and aspiring entrepreneurs to register businesses, and bring new players into the formal economy.
Positive downstream impacts include improving access to credit, infrastructure and other essentials while strengthening the tax base.
Additionally, more can be done to improve regulatory and legal bottlenecks to encourage foreign direct investment (FDI).
Sri Lanka is gaining attention on the global stage so if we can dissolve these roadblocks and ensure a stable policy framework, the nation can attract substantial investments in the second half of this year and beyond