Transformative impact of digital banking on Sri Lanka: People’s Bank leading the way

People’s Bank, a pioneering force in Sri Lanka’s banking sector, has been at the forefront of transforming the country’s banking landscape through digitalisation and customer engagement since 2015. With a strong focus on innovation and strategic partnerships, the bank has made notable progress in enhancing accessibility, convenience, and security for its customers, both in urban and rural areas.

In a recent interview, People’s Bank Chief Information Officer Dhammika Dasa shared insights on the transformative impact of digitalisation on the banking industry and highlighted the bank’s continuous efforts to improve banking services for Sri Lankan consumers.

Q: How do you view the impact of digital transformations on the banking sector in Sri Lanka?

A: Digital transformation has become a cornerstone of the banking sector in Sri Lanka, enabling institutions to transcend traditional limitations and deliver innovative, customer-centric solutions. For People’s Bank, this transformation is a strategic enabler of its mission to contribute to national economic development while remaining competitively profitable. By adopting digital technologies, the bank has been able to expand its reach, improve operational efficiency, and offer tailored financial solutions that cater to the diverse needs of its 15.2 million active customers.

In a country where rural areas have often been underserved, digital transformation has proven to be a game-changer. It has enabled People’s Bank to close the gap between urban and rural banking, ensuring that even the most remote communities have access to vital financial services. This transformation is in line with the bank’s core values of being “The Pride of the Nation,” by improving the living standards of Sri Lankans and supporting government initiatives and socio-economic progress.

Q: What digital banking services does People’s Bank currently offer, and how have they been integrated into customers’ daily banking lives?

A: People’s Bank has established itself as a pioneer in digital banking, offering a comprehensive suite of services designed to integrate seamlessly into customers’ daily lives. These services include:

• Mobile Banking: A feature-rich app that enables customers to perform transactions, pay bills, apply for loans, and access investment products.
• Internet Banking: A secure online platform for managing accounts, transferring funds, and accessing financial tools.
• Digital Wallets: Facilitating cashless transactions and peer-to-peer payments, promoting a cashless economy.
• Digitised Banking: A network of over 751 outlets and 307 SBUs (Service Delivery Units) that bring banking services closer to rural and underbanked communities.
• Self-Service Portals & Digital Twins: Enabling seamless customer onboarding and interactions through multiple digital channels, including mobile apps and digital interfaces.

As part of its forward-thinking strategy, People’s Bank is also exploring Digital Twins and AI Agents and focusing on AaaS (AI-as-a-Service) in the near future, believing that AI agents will revolutionise the banking industry by automating business processes and creating a tier of multi-agent orchestration.

Q: How has the adoption of digital technologies improved accessibility and convenience for consumers, particularly in rural areas, and how has People’s Bank developed simplified, user-friendly interfaces in multiple languages to engage with underbanked populations, especially in rural regions?

A: Digital transformation has significantly improved accessibility and convenience for consumers, particularly in rural areas. People’s Bank has developed simplified, user-friendly interfaces in multiple languages to engage with underbanked populations. This approach ensures that even the most remote communities have access to essential financial services, bridging the gap between urban and rural banking. The bank’s core business values emphasise enhancing the living standards of Sri Lankans while supporting state endeavours and socio-economic development. The bank’s palm-top banking solution is a prime example of how digital technologies serve as enablers to reach rural areas.

Q: How does People’s Bank ensure security on digital platforms?

A: As a bank entrusted with over Rs. 2.71 trillion in deposits and a total asset base exceeding Rs. 3.0 trillion, People’s Bank places the highest priority on security. The bank has implemented a multi-faceted approach to safeguarding its digital platforms, including:

• Advanced Encryption: Protecting customer data and transactions with state-of-the-art encryption technologies.
• Two-Factor Authentication (2FA): Adding an extra layer of security for account access and transactions.
• Real-Time Fraud Detection: Leveraging latest technologies to monitor and respond to suspicious activities in real time, which will eventually use to AI and machine learning solutions in near future.
• Customer Awareness Programs: Educating customers on best practices for digital security and fraud prevention.

This approach reflects the bank’s foundational values of Integrity and Accountability, ensuring that customers can place complete trust in the security of their financial transactions.

Q: How has digitisation contributed to cost savings for the bank and enabled more competitive offerings for customers?

A: People’s Bank has fully utilised digital transformation to achieve significant cost savings and enable more competitive offerings for customers. By reducing operational costs through automation and streamlining administrative processes, the bank has been able to lower expenses and pass on these savings to customers. Digital channels have enhanced customer engagement, leading to increased fee income.

The bank extensively uses analytics to gain a micro view of customer segments, allowing for personalised services and financial products. Robotic process automation and workflow systems add value by reducing overhead costs and processing times, resulting in faster services for customers. Solutions like palmtop banking have enabled the bank to reach previously untapped customer segments, integrating them into the banking system.

Continuous improvement in staff digital savviness has contributed to increased productivity and substantial cost savings. The bank is especially focused on engaging with Gen Z and millennials, who will soon play a central role in the ecosystem, as well as SMEs, which are expected to drive revenue growth at reduced costs. The resulting revenue growth can be ultimately passed on to customers through benefits such as offering higher interest rates on digitally opened fixed deposits.

The bank is also leveraging social media to redefine its engagement channels, significantly reducing customer outreach costs while enhancing connectivity and interaction.

People’s Bank integrates entire business value chains by offering business banking solutions such as supply chain financing, which automates the end-to-end supply chain. This is another example of how digitalisation adds value to businesses while minimising the bank’s operational costs.

Q: How is People’s Bank aligning its digital initiatives with the Government’s roadmap to improve the digital economy?

A: People’s Bank is fully committed to supporting and engaging with working groups under Sri Lanka’s National Digital Strategy 2030, a roadmap designed to transform the country’s economy and society through the full integration of digital technologies. Sri Lanka is ambitiously striving to become a digital leader in the Asia-Pacific region. To contribute to this goal, People’s Bank is focusing on:

• Creating secure and trusted financial mechanisms that enable people, businesses, and the Government to conduct seamless transactions, promoting financial inclusion and efficiency.
• Building and strengthening trust in digital platforms by enhancing data privacy protections, raising cyber awareness, and fortifying critical infrastructure against cyber threats.

According to a McKinsey analysis of 50 Sri Lankan companies across multiple industries, Sri Lanka’s Digital Quality (DQ) is ranked at 35, surpassing the global median of 33. The same analysis highlights that while Sri Lanka excels in connectivity, digital marketing, and investment in digital initiatives compared to other Asia-Pacific emerging markets, it still lags behind digital leaders such as China and India. Recognising this, People’s Bank is taking proactive steps to further elevate the country’s digital banking landscape.

People’s Bank is at the forefront of digital financial integration, having fully implemented and connected with all national payment platforms, including LankaPay, as per the directives of the Central Bank of Sri Lanka. The bank has also recently integrated with GOVPAY, contributing to key government projects in the digital economy. This integration positions People’s Bank as a key enabler of digital financial services for both public and private sector transactions.

At People’s Bank, is committed to driving the transition toward a cashless society, a cornerstone of our strategic vision. This initiative is supported by multiple pillars, each designed to enhance digital adoption and streamline financial operations.

One of the key pillars is the provision of innovative digital payment solutions, specifically targeting areas that currently rely on cash collections. By digitising these processes, we aim to improve efficiency, reduce costs, and enhance the overall customer experience. Our goal is to empower businesses and individuals with seamless, secure, and accessible payment options, paving the way for a fully integrated digital economy.

By prioritising these initiatives, People’s Bank has solidified its position as a leader in the cashless revolution, delivering value to customers and driving long-term growth.

Q: Looking ahead, what are People’s Bank’s key priorities and strategies for further advancing Sri Lanka’s digital economy in the coming years?

A: Our strategies are meticulously designed with the overarching goal of platforming all customer-facing banking functions, ensuring they are seamlessly integrated and accessible through an omnichannel experience. By consolidating services across digital and physical touchpoints, we aim to provide customers with a unified, consistent, and frictionless banking journey. Whether through mobile apps, online platforms, or in-branch interactions, our approach prioritises convenience, personalisation, and efficiency. This omnichannel strategy not only enhances customer satisfaction but also empowers users to engage with their financial needs anytime, anywhere, and through any preferred medium. Ultimately, this transformation positions us to deliver a modern, customer-centric banking experience that aligns with the evolving demands of a digital-first world.

Looking ahead, People’s Bank has identified several key priorities to further advance Sri Lanka’s digital economy:

• Creating seamless omni-channel experiences: Ensuring customers have a unified experience across multiple digital touchpoints.
• Leveraging data analytics for better decision-making: Utilising data insights to enhance financial services and optimise customer interactions.
• Enhancing Customer Experience: Investing in AI and machine learning to offer personalised, predictive banking services.
• Expanding Banking-as-a-Service and platform banking: Implementing solutions that cater to the evolving landscape of digital financial services.
• Becoming a true financial partner: Not just supporting customer transactions but actively helping to improve customer wealth.
• Strengthening Cybersecurity: Continuously upgrading security infrastructure to address emerging threats.
• Promoting Digital Literacy: Launching awareness campaigns and training programs to improve digital literacy among customers.

We are well aware of the evolving landscape of digital banking, including competition from fintechs, blockchain platforms. To stay ahead, People’s Bank is continuously realigning its business strategies, technical strategies, and tactical plans to adapt to these enterprise environmental factors, ensuring long-term sustainability and competitiveness. Additionally, we recognise the growing influence of alternative banking channels and are fully equipped to respond effectively while focusing on creating value for customers through enhanced digital integrations.