May 20, 2015 (LBO) – Sri Lanka’s banking sector needs to invest more in modern technology as the new generation is much more tech savvy, a former Central Banker said.
“Most of the banks need to further introduce technology today. They were in the wave of technology that started in the 1990’s but now its 2015 and we have to cater to cater to a new customer; we now have the generation Y customers,” W.A. Wijewardena, former Deputy Governor of the Central Bank said.
“Our banks are not yet ready to serve the generation Y customers as we don’t have the technology,”
“So we have to encourage the banks to reinvest these profits that they have
made back into technology development that will enable them to raise the saving account interest rate and not cut the lending rate and have narrow margin.”
“This is a matter of urgent policy need.”
Wijewardena said, the Island’s commercial banks should use the profits that were made in the past two years to upgrade their technology to the next level.
“The banks are presently riding on a low interest rate policy of the Central Bank,”
“They have implemented the policy on the deposit rates only and interest rates have been cut down to the minimum level and even though some banks are saying that they are paying four percent on the savings accounts, in actual terms it comes to about two percent,”
“And the bank’s lending rate are 9 – 10 percent and as a result the banks made billions and billions of rupees as profits in 2013 and 2014,”
“If such profits are made by the banking industry then someone should look into this with the banking industry and see how this can be used to develop itself further as most of the banking industry needs to introduce new technology.”
In the modern world, rapid development in technology has impacted lives of people across the world, banks and credit companies are reinventing themselves bring up new branch prototypes, payment systems and security protocols.
Experts say the need to keep up with the latest technology has become vital.
These developments are also changing and shaping the landscape of the financial services sector as customers demand convenience.