NDB deploys robotic processing technology for account opening and transactions
The NDB Bank (NDB) opened its first paperless branch last month in Colombo where it has deployed robotic process automation (RPA) at this branch for the account opening and transactions processing.
Mr. Dimantha Seneviratne
In an interview with the Business Times Dimantha Seneviratne, Group CEO NDB, said this move signifies NDB’s transition into the digital age. The new branch is called NDB NEOS and it’s located opposite the World Trade Centre in Fort. Here, the physical presence of bank staff is coupled with a digitised experience. “At this branch we provide a comprehensive interactive digital platform connected to multiple devices, pad bot-based queue management system, paperless account opening through interactive device, wide digital screens with all information, to totally paperless transactions processing,” Mr. Seneviratne explained.
He noted that with the fourth industrial revolution which is characterised by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres there is a need to cater to the new generation. In recognising this, NDB has initiated a new digital financial services sector reporting directly to the CEO. With this new move, NDB has deployed cash recycling machines and branchless banking under the proposition “Bank2You” as part of their CASA (current and saving accounts) strategy to support customer deposit collections. “As a result we have expanded our client base including those at remote areas,” Mr. Seneviratne added. NDB was able to convert more than 60 per cent of its transactions to be routed via digitally enabled modes, thereby achieving considerable cost savings and efficiencies.
Improvements to process efficiencies and the results of sound cost management strategies are well reflected in NDB’s cost to income ratio [CIR] which improved from 45.5 per cent for 2017 to 39.4 per cent in 2018.
According to Mr. Seneviratne, the bank’s ‘Transformation 2020’ strategy, which was executed well saw considerable progress in their above average balance sheet growth.
The bank, having done very well in investment banking and capital structuring through its subsidiary in Bangladesh, NDB Capital, is now eyeing opportunities in retail and wealth management sectors in that country. Last year the bank hosted the ‘Ayubowan Bangladesh’ seminar showcasing Bangladesh to local investors, and exposing good business opportunities to them in that country. “Concurrently we are evaluating overseas business opportunities as well,” Mr. Seneviratne said.
As per the unaudited interim financial statements released to the CSE earlier this month for the financial year 2018, the bank posted 23 per cent growth in the balance sheet to close at Rs. 473 billion. They also posted 27 per cent growth in loans and receivables and customer deposits. NDB’s net profit was at Rs. 5.7 billion showing a 30 per cent growth year on year.
NDB’s Non Performing Loans (NPL) increased to 2.85 per cent (from 1.83 per cent in 2017) following the industry trend, however was much lower than industry average of 3.4 per cent. “We had stresses in the portfolio quality last year and we have enhanced underwriting standards, are engaged in proactive monitoring and also assisting customers where there are genuine cashflow issues to manage portfolio quality,” Mr. Seneviratne noted.
The bank meanwhile concluded a Rights Issue during the last quarter of 2018, resulting in Rs. 3.4 billion being raised as Tier I capital. Though the bank’s Tier I capital ratio increased to 9.23 per cent after the Rights Issue, there was a shortfall in terms of subscription. “The timing wasn’t right mainly due to the political situation during the last two months of last year. As a result we closed the window of opportunity given under the rights issue by end December,” Mr. Seneviratne said adding that the bank is assessing options for equity raising.
For NDB, this is a year of consolidation. According to Mr. Seneviratne, after two great growth years, NDB will be implementing new systems and working on streamlining operational efficiencies this year. “As we aim to reach Rs, 500 billion in asset base, we would require more capital as per regulatory requirements. Already we got shareholder approval for a Rs. 6.5 billion debenture issue which has a Tier II conversion plan,” he added noting that discussions are ongoing for raising Tier I equity.
The year also marked the bank and its group companies being externally endorsed by a large number of local and international awards. Mr. Seneviratne added that with these accolades, NDB is in a better position to attract new investors. “We will be interested in foreign roadshows in this regard,” he said to support the capital raising plans.