HNB WBG’s Innovation Revolution: Banking on Digital-First Strategies to Revitalize Sri Lankan Exports

HNB Wholesale Banking Group Deputy General Manager Damith Pallewatte 

In the continuing aftermath of Sri Lanka’s worst economic crisis, the nation’s hopes for a durable economic revival now hinge on our ability to rapidly transform and re-align the majority of the national economy to export high-value products and services. 

This national imperative comes at a time when both the global and local economic landscape presents their own set of extremely complex challenges. Traditionally lucrative markets in Europe and North America have recorded significant contractions in consumer demand as the impacts of post-pandemic inflation continue to ripple out. 

The consequences for enterprises have taken the form of sharp hikes in cost of raw materials, energy and labour. Meanwhile critical skills shortages are emerging as the worsening economic climate pushes more Sri Lankans to migrate to greener pastures. 

But parallel to broader global shifts in economic power – including the rising tide of the Indian economy closer to home – the nation’s most agile exporters are already pursuing new opportunities in non-traditional markets, while simultaneously seeking to move up the value chain in established markets.   But even in this challenging environment, there is still hope. Among the Sri Lankan banks working closely on the front lines of this monumental challenge is HNB and its Wholesale Banking Group. Specializing in comprehensive financial solutions tailored to businesses of any size— from large corporates and international businesses to SMEs – HNB WBG is on a mission to empower Sri Lankan enterprises to take their first steps into international markets.

Until recently, conquering technicalities of international trade has been a notable obstacle for businesses whose foray into overseas markets hinges on their ability to ensure that each transaction is executed securely and in complete compliance with buyers terms. 

From the intricacies of facilitating a safe corridor to exploit crystalized trade deals by issuing various types of Letters of Credit, Negotiation of export documents, to the issuing of Shipping Guarantees and facilitating Entrepôt trade business, HNB’s suite of services addresses every conceivable need of an exporter.

HNB WBG extends beyond traditional banking. They not only excel in the areas like trade finance, treasury solutions, and syndicated loans, but also ventured in to providing a sophisticated transactional banking solution establishing themselves as a one-stop financial hub for businesses with expansive and intricate financial requirements. Under the visionary stewardship of HNB Wholesale Banking Group (WBG) Deputy General Manager, Damith Pallewatte, the bank is strategically positioning itself at the crossroads of technology and international trade.

Leveraging HNB’s formidable resources, global network, and superior digital banking infrastructure, Pallewatte and his team are on a mission to sculpt a new generation of Sri Lankan exporters, each brimming with the potential to grow into multinational brands.

“Trade isn’t just about transactions; it’s about transformation,” Pallewatte reflects. “While there are significant challenges in realigning and reviving Sri Lanka’s economy, we still see immense untapped export potential. However, to succeed, we must shed the traditional mindsets that have hindered our nation’s entrepreneurial spirit.”

 “HNB WBG is configured to serve as a catalyst for this transformation, integrating every financial requirement of a business to specifically challenge the status quo in trade facilitation. In this manner, we aim to rebuild Sri Lanka’s export portfolio and ensure that every Sri Lankan enterprise, big or small, has the tools and expertise to navigate the global marketplace with confidence. Too many Sri Lankan businesses have the potential, but lack a definite path into global markets. By strategically partnering with and supporting these firms with an integrated value proposition custom customized to their individual requirements, we hope to nurture Sri Lanka’s next generation of export giants,” Pallewatte said.   

As an example, he highlighted the unique challenges faced by local enterprises attempting to tap into the full potential of Sri Lankan Cinnamon or ‘true cinnamon’. While geographically unique to Sri Lanka, it is still largely exported in bulk to other nations, which perform value addition, and re-export into high value market niches. According to Pallewatte, these opportunities for domestic value addition must be captured by Sri Lanka’s private sector.  

“One of our most urgent priorities is to get Sri Lankan businesses and entrepreneurs of all sizes to seriously reconsider their traditional approach to the truly incredible products that we have available. We see tremendous potential for partnerships in this area and other similar opportunities for domestic value addition with great interest,” Pallewatte noted. 

Aligned to the sweeping digitalization campaign that has been undertaken at HNB, the WBG too has been working to integrate technology into its core strategy. These efforts have been directed towards extensive optimization of operational, internal, and administrative processes. However Pallewatte emphasizes that digital transformation also needs to move outward from the bank to its customers as well.  “When it comes to exports, the second wave of digitalization that we are working to expand across Sri Lanka has the potential to create a thriving export ecosystem, where large multinationals, and small single proprietor businesses can each find their niche in global markets. The banking sector has a critical role to play in this effort. We cannot act as simple financiers, we have to also come to the table with technical expertise to help clients navigate the increasingly complex legal and regulatory environments, and help them to identify, prioritize and pursue optimizations to their business and operating models. 

“It is not an easy task to take a local business global, but it is rewarding. In our work, we encounter many highly entrepreneurial Sri Lankans who are now making their mark in international markets with home-grown products. Our focus is to nurture these enterprises, facilitate their export journey, and ensure that they scale their businesses in order to sustain their growth,” Pallewatte said. 

He added that HNB was actively pursuing local partnerships that could further strengthen its engagement with grassroots economic collectives, including de-centralized groups of traditional textile weavers, agri-products, handicraft and a wide range of micro-enterprises, to help aggregate their products. Meanwhile, through HNB’s groundbreaking partnership with global B2B e-commerce platform, Cord 360, the bank can also guide these enterprises to gain easy access to customers in 140 countries. 

Together with export facilitation, he also emphasized the importance of strategic import substitution to bolster vital industries which Sri Lankans depend on, such as essential pharmaceuticals and medicines like saline, as well as automotive batteries and dairy production. “The past two years of crisis have clearly demonstrated the value of maintaining some domestic production capacity for our most vital requirements. However, if we are able to really master these industries, there is also long-term potential for export as well. These are areas which HNB WBG is keen to engage with,” Pallewatte said.  

Another cornerstone of HNB’s strategy is its ability to forge global and local partnerships. With a network of over 700+ correspondent banking relationships, HNB offers unparalleled global connectivity. This vast network, combined with the bank’s skilled trade finance team with in-depth understanding of international trade dynamics, places it in a unique position to facilitate global trade for Sri Lankan enterprises.

“In this interconnected world, partnerships pave the way for progress. HNB WBG, with its expansive global network, has been instrumental in fostering alliances between Sri Lankan businesses and their global counterparts. Moving forward, we will continue to leverage our extensive resources and relationships to continue building out a vibrant export ecosystem. Our message to the world needs to be clear, and unified: Sri Lanka is open for business,” Pallewatte said.