StanChart official backs banking sector\'s digitisation drive

A senior Standard Chartered official has laid emphasis on pursuing the ongoing digitisation process in the banking system along with introducing innovative services for the clients as a means to boost the banking industry.
Alex Manson, Global Head of Transaction Banking at Standard Chartered, noted that digital channels are safer for business or individual transaction compared to traditional cash or paper and the future lies on how soon the banking sector can adopt digitisation.
He made the remarks in an exclusive interview with the FE in Dhaka during his visit last week.
Mr Alex, who joined the bank in 2012 after serving with Deutsche Bank for twelve years, also talked on various issues including objective of transaction banking, modernisation of banks, and his priorities and plans for the bank's local operations.
Elaborating on the objective of transaction banking, Mr Alex said transaction banking is the core of corporate banking in many ways.
"It is about providing clients, corporate and financial institutions with daily life blood. And it is a daily life blood across working capital, financing as well as operations," he said.
Regarding portfolio of the bank in Bangladesh, he said Standard Chartered Bank has been present in this market for over 110 years.
"But we also think we have lots of potential to grow.  As Bangladesh grows, the market has potential to become even larger and for us as well it will be a very meaningful market. The group is also investing in this franchise," said Mr Alex.
Asked why transaction banking was attractive in the current economic context, he said that Bangladesh will thrive on trade and commerce. And transaction banking is about facilitating and supporting trade and commerce. 1
"So, quite simply, transaction banking is the most important need from a banking perspective that a country has today."  
About his priorities for 2016 and beyond Mr Alex said the world of trade and commerce is evolving, and "as a transaction bank we are evolving as well, we are adapting to the changing world of trade."
He said one of the big evolutions that the bank sees the supply chain of companies migrate.
For example, a lot of supply chain is migrating from China down to South East Asia, coming to Bangladesh and so forth, he added.
"So, we are going from a world where things were made in one particular place and sold in another place; and now things are made everywhere and they are sold everywhere. That is a more international supply chain, also more complex one which is moving all the time," he said.
Mr Alex said, "The supply chain across the network is our priority. So, not just one company at a time, but a company together with its ecosystem, that is its suppliers, and its distributors. Every company has an eco-system around it and every company is part of the ecosystem of somebody else."
"And for us as an international bank with the network we have it is about integrating the ecosystem of suppliers, distributors and obviously bankers in the same supply chain and making it more efficient."  
Asked about how the competitive landscape might evolve over the next three years in terms of transaction banking, Mr Alex said there was a bifurcation between international and local banks.
For example, there are domestic banks that are great at banking local clients, because they understand the market.
"We as a bank want to do differentiate with the ability to do both in a place like Bangladesh. Because we have the depth and breadth and we have the risk appetite and the ability to support local business and at the same time we have the technology that allows us to digitise the supply chain across our borders and that is a competitive differentiation versus both international and local banks," he said.
Replying to a query about the key steps the Standard Chartered will take in helping its Bangladesh franchise grow, he said, "We are investing in this country. And the investment is being done in two main areas-one is technology, the other is ecosystem of clients.
About risks to digitisation of the banking system, he said the recent events highlight the cyber crime and cyber security and the banks need to strengthen security by investing in this particular area.
"But it would be wrong to hold back digitisation and would be wrong to assume that we are better off with paper or cash system. There are lot more risks with paper and cash than there is with transaction through digital channels," he said.
"The right answer is to continue to digitise, to continue to modernise and at the same time take protection against cyber security risks. This is not a reason to hold back, this is a reason to actually to do more, because digitalisation is a less-risky way for transacting," he noted.
About his impression about Bangladesh and its bank's operation, he said the place has a great potential to grow.
"I think as a market, it has the potential to focus on sectors beyond readymade garments. There has been huge success in the garment sector but there are other areas and sectors Bangladesh can build a competitive differentiators with core competencies that will make it more successful in the international trade scene," said Mr Alex.
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