As claimed by Lakshman Silva, the Chief Executive Officer of DFCC Bank, 2021 will be a challenging year for the Banking industry as it will have to adapt to a new normal and focus more on digitalisation.
“For the year 2021, there are several possibilities. The new normal has impacted the Banking industry. It has changed the way we operate and how customers do transactions with the bank. Banks will be challenged to keep the systems updated all the times and facilitate real-time online solutions for our customers. At first, we thought working from home was not a choice in the Banking industry as we have to physically interact with customers’, but it’s a possibility today as we have embraced it by being agile and performed well in the past 9 months. In the new normal we are now facing , some employees will operate remotely while some will physically be at the office. We will have to introduce novel solutions and strengthen our firewalls and access controls as well to address the security side of the business”
Furthermore, Lakshman stated that another major challenge faced by the industry is the repayment of debt moratoriums.
“Extensions to debt moratorium timelines were granted to some affected industries and those dues are expected to be paid by March, 2021. This is a real challenge the banks are currently facing. If the customers’ do not honour their repayments, the bank will have to face a tough time as the non-performance ratio will rise and when the cash flows are deterred, additional cash should be found for the growth of the bank.”
However, according to the CEO, the extension of debt moratorium timelines can positively impact the customers if the business community prudently uses these funds.
“If the funds are used wisely to reinvest in their companies, increase their capacities and boost their performance, they will be able to reach a higher scale of operations by April 2021.”
SMEs plays an important role in the economic development of a country. Their role in terms of production, employment generation, contribution to exports and facilitating equitable distribution of income is very critical. This has therefore been established as a priority sector by the DFCC Bank to assist them for the betterment of the country.
“I believe that not only in terms of incentives and tax concessions, the government has a clear strategy, but also it is looking at the vertical integrations that can be made. The government will also assist in recognising the prospective markets for their goods.
“If the lock-downs continue to take place in the years to come, the SME sector will be largely affected. If there are no lockdowns, they would do well in the years if they use the opportunities properly.”