Sharp decline in over-the-counter transactions due to digitization: Banker
In an interesting revelation, DFCC Vardhana Bank PLC CEO, Lakshman Silva observes the number of over-the-counter transactions is on the decline due to the increasing adoption of digital banking solutions in recent times.
“The migration to automated formats has resulted in teller-assisted transactions declining steadily yearon-year,” Silva said in his annual address to the shareholders.
This development questions the need for Lankan banks to invest on brick and mortar style of banking as aggressively as before when most of the services could be offered through a variety of digital channels, mainly through mobile devices. Banking sector analysts see this trend in earnings as positive for banks as they could minimize their capital expenditure required to extend their branch network which will reduce the depreciation chargers/rent and minimize the upkeep cost at a time when pressure is mounting to increase Return on Equity (RoE) when the sector margins are narrowing.
Nations Trust Bank PLC saw their internet banking transactions growing by 6 percent in 2014 while its mobile banking app having 15,000 downloads during the 12-months to December 2014.
This year, Hatton National Bank PLC launched its campaign titled ‘New World Banking’ in order to create awareness about the array of innovative digital, electronic and mobile banking products it offers and to highlight special features of these comprehensive cross-platform systems. It is in the grapevine that some private sector banks are even contemplating to levy a fee to discourage the clients coming into the counter for basic transactions such as cash/cheque deposits and cash withdrawals, the functions which could be performed via self-kiosks.
Self-kiosks are now being widely installed by many banks which facilitates cash/cheque deposits, cash withdrawals and payments so that a branch can run with minimum tellers to reduce costs.
It now appears that the banking industry is gradually shifting towards a self-service model with minimum human touch points to offer the traditional as well as new banking services. Meanwhile according to Sampath Bank CEO Aravinda Perera, despite the advancement made in technology, people still prefer to see the presence of a bank officer when doing their banking transactions in Sri Lanka. “So, what I finally want to say is that, technology; yes but that alone will be not enough for us,” Perera said.
Sampath Bank currently has the highest percentage of non-counter transaction in Sri Lanka.