Moving beyond the ‘one-size fits all’ model of retail banking with HNB

HNB Deputy General Manager, Retail and SME Banking Sanjay Wijemanne

A reliable quirk of human nature when it comes to technology is that once we become familiar with a certain level of capabilities, we almost immediately take it for granted. This immersive dynamic creates a natural inclination towards continuous innovation. However in the quest for better ways to do business, it is always useful to reflect on the distance we have travelled, in order to recalibrate, and move forward with greater purpose. 

In 1888 when our bank was founded, the telegraph was just emerging as one of the fastest modes of long-distance communication available. In the ensuing 134 years, the speed of communication, and the size and complexity of the information we are able to transmit leveraging the internet has increased exponentially. 

Today’s average retail banking customer is immersed in a culture and society that is changing at the speed of information. Increasingly, the bare minimum we expect is instant, seamless access to whatever services we require at our fingertips. Moreover, these changes are taking root within the span of a single lifetime. 

The question that we at HNB have been asking ourselves is: how can we stay relevant to our customers in such a rapidly changing landscape, while continuing to offer tangible value through our products and services?

Simplification and the power of a ‘less is more’ mindset 

These were some of the core issues that we grappled with when first setting out the parameters, and objectives of HNB’s transformative journey to position ourselves as a truly future-ready bank. Initially our goal was leverage emerging technology to complete exponentially more work in half the steps. 

Guided by this ambitious vision we initiated sweeping updates to our core banking systems, technological, digital and physical infrastructure. We also quickly learned that the systems we were building were ultimately for the benefit of our employees, and customers. Hence we also started an intensive program of capacity building, skills development, and recruitment to build up the capabilities of our team to match our objectives. Simultaneously, we established comprehensive customer support and feedback mechanisms, in order to ensure that we were able to start proactively addressing customer concerns even before they arose. 

Parallel to these efforts, we undertook a complete re-design of back-end processes. Instead of a fragmented approach that relied on enforcement of consistent policies across our extensive branch network, we instead embarked on an ambitious centralization of administrative, and credit evaluation functions. This enabled radical streamlining of our product and service delivery. 

These optimisations in turn gave our people the freedom to concentrate on honing their technical expertise and building our most valuable asset: our relationships with customers. All of these transformations were focused toward a single goal: customer centricity. 

Building a hyper-personalised value proposition 

As one of Sri Lanka’s oldest banks, and a dominant leader in private sector retail banking, another key priority was the standardisation, simplification and optimisation of our product and service portfolio. 

We took a hard look at our offering, and based on customer feedback, we removed those offerings that were not adding sufficient value, and re-packaged and re-bundled others in order to build holistic value for customers. 

Even with this significant optimisation in product design, HNB continues to offer customers the largest and most versatile range of retail banking products in the market – spanning general and specialised savings accounts for Sri Lankans across every chapter of their lives: from minors and youth to working professionals and senior citizens. Similarly, we offer fixed deposits, and other innovative investment opportunities which provide the highest returns in the market. 

The HNB SalarySMART savings account was one of many unique retail banking innovations that emerged as a result. Designed for dynamic working professionals, we bundled a high interest saving account with a 3x overdraft/personal loan with special interest rates, a HNB Platinum Visa Card, and exclusive access to bancassurance products. Similarly, where in the past our minor’s savings accounts were limited to a ‘one-size fits all’ proposition, we were able to create fine segments that were designed to provide greater value at each stage of a child’s journey into adulthood. Until the age of 5, this meant that the account was completely in the hands of parents, but with greater functionality for children as they grew into their teenage years. 

While high interest rates have discouraged customers from taking borrowing, those that do require loans will also find the most streamlined service in the market, and the best rates and value additions in our lending and leasing solutions, all of which are available through the most advanced digital banking solutions in the market.   

In this manner, we were able to support parents in giving their children a strong financial head-start, while also providing invaluable early experience with banking, and an opportunity to build financial literacy from the get go. 

Meanwhile, the centralisation of our back-end processes, and the resulting separation of our sales and credit evaluation functions created a stronger governance paradigm, while also enabling improvements in the scale and capacity of both. The improved back-end systems also provided an opportunity to harmonise our products across all branches, while empowering our staff with the freedom, time, and data they needed to understand the needs of our customers with greater clarity. 

As a result, we were able to proactively approach customers with hyper-personalised value, zeroing in on exactly the bundle of products and services that could support them to achieve their goals. 

Evolve or perish: The new ‘phygital’ imperative

While the future remains extremely volatile, what is certain – especially based on our collective experience over the past two years, is that technology-enabled products and services will play a pivotal role in the future of retail banking. In that regard, some of our strongest competitors may not even come from the banking sector. 

The COVID pandemic has been the most powerful catalyst for the adoption of digital banking, as evidenced by the 238% increase in digital banking transactions and the 107% increase in registrations for innovative products like our payments solution HNB SOLO over the past year. The implications for retail banking are extensive. 

While fintechs are starting to uncover avenues for disrupting traditional banking and lending models, the fact remains that institutions like HNB still have the most crucial first-mover advantage: trust. Together with the realignment of our physical and digital infrastructure, HNB’s relationship capital with our customers is creating a new paradigm in retail banking that delivers a seamless, high-quality omni-channel retail banking experiences. 

This required the harmonising and optimising of user experiences across SOLO, and our popular mobile banking app, as well as the continued expansion of access to cashless payments across our merchant network, leveraging on systems like our affordable card payment acceptance system, HNB MOMO. 

Similarly leveraging partnerships with specialised firms like WEBXPAY, Cord 360, OnePay, Bileeta and AppiGo, HNB is providing our vast network of SME customers with access to essential tech and tools to enhance their competitiveness, and even expand into global markets, leveraging specialised affordable payment acceptance solutions, Enterprise Resource Planning (ERP) systems and robust e-commerce capabilities.   

The results speak for itself 

In an environment of elevated crisis, agility is often the best survival strategy. The performance of HNB as a whole, and in particular, our retail banking group is the best evidence for this fact, especially when considering the unprecedented volatility in which that performance was achieved.

Our success continues to be validated on both local and global stage, with HNB having won the Asian Banker Best Retail Bank in Sri Lanka award, the ‘Best IoT Initiative’ award for our pioneering HNB FIT Savings app at Asian Digital Finance Forum, and 4 awards at the LankaPay Technovation Awards and ‘Best Bancassurance Provider in Sri Lanka at the Global Banking and Finance Awards 2022 by the Global Banking and Finance Review. 

But our greatest validation has been from our customers, who continue to rate HNB SOLO and the HNB Mobile Banking app highest among all banking apps available in Sri Lanka. We believe that our transformation also has national implications. 

Today, many small enterprises have been shuttered by the economic crisis, and we are acutely aware of the daily struggles and sacrifices that our customers and all Sri Lankans are being forced to endure. 

Hence our top priority is to proactively approach customers that are genuinely struggling, and work closely with them to ease their hardships and restructure payment wherever possible. 

We understand that any responsible individual who has taken on debt to meet their most important needs are always intent on fulfilling their obligations. As an organisation, we have committed ourselves to channelling the benefits of the optimisations that we have made to our business towards supporting such individuals, and enterprises, in addition to supporting every opportunity for export development and generation of foreign currency inflows. 

Remittances are naturally a core focus area for HNB, and we will continue to provide novel and extremely high value incentives for expatriate Sri Lankans to safely, reliably and affordably send money back home to their family and loved ones. 

Through products like the Adhishtana Savings Account – which includes weekly chances to win cash gifts, as well as pre-departure loans to prepare for migration, housing loans, education loans and microfinance facilities to start a business of their own. HNB also provides debit cards, card-less remittance collection, and even door-step cash deliveries to make sure that recipients in Sri Lanka are guaranteed with convenient access to their funds as and when needed. 

In this manner we aim to beat the unreliable and unsecured black market alternatives that emerged by out-competing them, and delivering genuine value to our customers and their loved ones, in recognition of their invaluable contributions to our nation. 

Updating the role of the retail banker

Moving forward, HNB aims to be ‘A Joy to Bank With’. Given the powerful impact that our finances have over our quality of life, banking has always been serious business. Constant evolution in customer preferences means that our goals will also be shifting depending on each individual customer. As a result, the promise that we are making is an extremely ambitious one. 

The transformations we have undertaken to integrate a 134 year legacy as Sri Lanka’s partner in progress into a single joyful experience for our customers that is consistent across every product, every touchpoint, and every interaction is what HNB aims to leverage in order to deliver on our promise.  

The next frontier of retail banking will be driven by advancements in Robotic Process Automation, machine learning, and Artificial Intelligence systems like Chat GPT. But the innovative capabilities that they enable will only be effective if they are leveraged by our people, in order to unlock higher levels of value for our customers.  

While the sum of these enhancements are revolutionary, they also mean that the role of the modern banker itself is now changing. Where in the past, our contact with customers was more focused on transactions, increasingly, our employees are taking on a more collaborative advisory role. Through our continuing transformative journey, HNB aims to be at the forefront of defining this new paradigm in tech-empowered retail banking for generations to come.