DFCC Bank, a story of transformation

Lakshman Silva, CEO of DFCC Bank

A unique institution; private sector in form but more like a public-private partnership in outlook, DFCC Bank was set up under an act of Parliament, to give rise to the post-independent industrial growth through private sector participation.

Setting off to accomplish its mandate in unchartered territory, against a tapestry of changing political and economic scenarios, DFCC has for well over half a century played an innovative and catalytic role in the development of the private sector with special support from the government which continues to date. DFCC’s role has not been confined to providing long term loans alone but one that has extended to capacity building and business facilitation.

DFCC Bank is proud to have been the wind beneath the wings of many trail-blazing entrepreneurs and enterprises in the country, particularly during their early and risky start-up stages. Today many of them are leading players in sectors such as agriculture, apparel, construction, food and beverages, healthcare, manufacturing, power, telecom and tourism.

The Bank has been a true pioneer, daring to lead the development of key sectors such as small and medium enterprises, resort hotels, mobile telecommunication and more recently renewable energy. The Bank also ventured into new and complimentary areas of business such as investment banking, unit trusts, stock broking, venture capital and industrial estate management.

With its original mandate still high on the agenda, DFCC Bank continued in to the new Millennium with a paradigm shift in its business model. New subsidiaries engaged in Consulting and IT services were launched and the investment banking business was re-engineered through a joint venture to be a fully fledged universal investment banking group.

The defining moment in the last decade was the launch and development of DFCC Bank’s commercial banking subsidiary named DFCC Vardhana Bank. A unique two banks in one structure transformed DFCC from a single product bank that only connected with businesses, to a bank that also catered to individuals from all walks of life. A portfolio of enhanced personal financial services asset and liability products was designed and introduced.

Throughout its journey DFCC Bank never lost sight of its special role in the development agenda of the country. It continued to be in the forefront of sustainable development financing being a net transferor of financial resources especially to the provinces, transforming rural economies and thereby supporting livelihoods, employment generation and capital formation. The small and medium enterprise sector is the key driver of this transformation and DFCC remains committed as always to the development of this sector.

Through the years DFCC has been recognised for its work especially in the development and corporate social responsibility areas. However, what is special is the recognition from the international financial community. The World Bank has stated that DFCC Bank is one of a small number of development finance institutions that was not only viable, but also successful in transforming itself into a multi-product and robust financial institution in a changing international and local environment. DFCC’s special status means that it is the preferred conduit for funding from multilateral institutions.

Over the years, DFCC has evolved, diversified and grown to meet the changing needs and aspirations of a resurgent economy, its institutions and its people.

In January 2015, DFCC became a Public Quoted Company incorporated under the Companies Act No. 07 of 2007, transforming into DFCC Bank PLC.

In October 2015, in a landmark event in Sri Lanka’s banking and financial sector, DFCC Bank PLC and its subsidiary – DFCC Vardhana Bank amalgamated to form a fully-fledged commercial bank supervised by the Central Bank of Sri Lanka. The joint synergies and the combined development banking and commercial banking resources of the merged entities, strengthen and position DFCC Bank PLC as a force to be reckoned with in the financial services industry. The combined entity offers a full range of banking services across all economic sectors and geographies in the country, with sustainable value creation as a core objective.

As a financial services group, DFCC Bank PLC continues to grow and draw synergies from its complementary areas of business such as investment banking, unit trusts, stock broking, venture capital, industrial estate management, consulting and IT services through its subsidiaries, joint venture and  associate company.

The Bank presently operates 138 branches across the country, and customers are serviced by over 1,500 dedicated employees with expertise in various disciplines.

In Conversation with with Lakshman Silva CEO of DFCC Bank

Lakshman Silva, the CEO of DFCC Bank has been spearheading its latest campaign as they evolve into a fully-fledged commercial bank. Through his vision of transforming DFCC from a once pioneering development bank into a commercial bank for everyone, the bank seeks to become a bank that can, in essence, serve every Sri Lankan from a newborn all the way through to a retiree.

Please introduce yourself to us

I am a graduate of the University of Kelaniya. I went on to complete my postgraduate at the University of Sri Jayewardenepura. I am a fully qualified development banker; my corporate journey began in the private sector before I joined the inland revenue department. The rest of my 33-year long career has been at DFCC, as a result, I am the longest-serving employee for the bank. I truly am the only homegrown CEO for DFCC

DFCC has a rich corporate heritage, what are the salient characteristics of this in your view?

DFCC has been in existence for almost 65 years. During the early stages, we were a development bank and as a result, we are the first development bank in Sri Lanka and one of the oldest in South Asia. Set up as part of a joint mission together with the World Bank of Sri Lanka, our heritage was all about funding the pioneering development projects in Sri Lanka. If one were to analyze the growth of the private sector, DFCC has been at the forefront of setting up entities and corporations. Together, over the period of time, we have grown side by side and in 2015, we became a fully-fledged commercial bank. This makes us unique as we are among the few financial institutions who have shifted their focus over time. Additionally, we are also the second bank to be listed in the Colombo Stock Exchange and our shares have always attracted investors.

What are the challenges associated with leading such an organization rich with history?

As we were a development bank, this has always been one of our unique advantages. As other banks moved towards long term lending, we had to change our business model along the way. This change has been seen over the last decade. We can no longer continue with the traditional banking as times are constantly evolving, so as a result, the way in which we carry out our operations are also changing. While we have such a rich history, it should not be diluted even though we look at new prospects in a challenging new environment.

How do you describe your corporate purpose and what other initiatives do you have in place to benefit the society that DFCC operates in?

Our corporate purpose is simply to become a bank for everyone. Additionally, as we are a dynamic and responsible corporate entity, we engage in many CSR projects as well. Under our five pillars of CSR we have entrepreneurial support, educational development, environmental concern, community outreach and emergency relief. Projects under these segments enable us to give back to the communities that we operate in. With a team that is geared to work for these good causes, we continue to achieve our objectives in this regard.

DFCC has now shifted their focus to become a commercial bank suited for everyone, what is your strategy to attract more individuals to bank with DFCC?

We are a bank for everyone and we cater to all segments of society, be it a senior citizen or a newborn baby or even a professional. Over the last several years with our internal studies and external research our product development teams have come up with attractive product propositions that suit everyone. From savings in fixed deposits to money transfers, we have provided attractive offers. In terms of lending in support of our SME’s and home loans for newlyweds, we will provide the whole gamut of services. Our strategy is that we use a bit of a hybrid model of having partly development banking aspects together with commercial banking services.

How will you innovate to attract these customer segments?

DFCC has been known to be a trailblazer in project finance. People have enjoyed our facilities and such people will always see us as a pioneer. However, going forward our business model is changing towards digital banking. We embraced innovation by introducing the first digital virtual wallet and made a remarkable revolution in the commercial banking sphere. As a pioneer of innovation in this space, we have launched digital platforms such as DFCC I connect, DFCC My space and DFCC Primer go to create better experience to attract new customers.   We will continue to innovate in order to attract a younger tech savvy group of customers.

What characteristics make for an ideal corporate leader?

To become a corporate leader, you must have the acceptance of the internal customer. Being in the bank for a long time I am experiencing it. We have been very transparent in our operations and culture, so this has won the trust of external customers as well. Honesty and integrity are paramount importance to us. As a result of that, this organization has brought in good corporate leaders to the industry for almost 65 years. However, a good leader should also be firm when taking action for any kind of violation or misconduct.

Elaborate on your vision for 2020

Our vision is to become the most dynamic commercial bank in the country. During the last two years we had unexpected natural calamities and political setback and other uncertainties such as the Easter Sunday tragedy. We have not derailed the vision, but we have gone further to set up a vision for 2025 as well. We want to become the most customer centric digitally enabled bank by 2020. What this means is that we need to ensure that all our product and services can use digital platforms resulting in the increase of customer footprint.

There are many subsidiary companies under DFCC, how does this support overall customer experience?

In Sri Lanka, banking is restricted by regulations. Many of our subsidiaries have created some avenues for us to provide additional services to our customers. From client value addition, to support for entrepreneurs and infrastructure provision, our subsidiaries play a pivotal role. In fact, our tech arm was responsible for developing our virtual wallet product. Additionally, we have other subsidiaries in place which provide stock brokering services together with corporate advisory. So, I would say that our success is not purely due to banking and banking alone.

Sri Lankan society has an innate fear of credit cards and online payments. How can this outlook be changed?

The community outside Colombo lean more toward brick and mortar banking, this is due to trust lost from the consumers’ side as some projects involving digital transactions have failed in the past. However, there is an increasing younger audience that are more tech savvy with an understanding of how to use the technology to their advantage. New generations rarely visit banks, everything they need is in the palm of their hands. So, while we adapt, we must not forget those customers who seek the person to person interaction that we can offer them. We will continue to maintain other forms of service that include the all-important human touch.