A barefoot banking revolution by liaoqinmei


									                                                                                                                                                                   and a stimulus for a banking revolution
                                                                                                                                                                   in Sri Lanka.
                                                                                                                                                                       In 1970, Hatton Bank annexed two
                                                                                                                                                                   hill-station branches of the then
                                                                                                                                                                   National & Grindlays Bank and re-                                 A barefoot banking revolution
                                                                                                                                                                   launched itself as Hatton National
                                                                                                                                                                   Bank, signifying its new role as a
                                                                                                                                                                   national player. HNB made its
                                                                                                                                                                   intentions clear, when around the same
                                                                                                                                                                   time, it opened five branches – a
                                                                                                                                                                   massive intensification of its
                                                                                                                                                                   commercial activities. The bank went
                                                                                                                                                                   public the next year, with a 35% share
 Market                                                to participate in it and must therefore interact                                                            offering to its customers, thereby
 Banking is often compared to the packaged             with the banking sector.                                                                                    broadbasing its ownership.
 goods business, where services have become               But this is where competition takes a turn.                                                                  HNB’s progress was both swift and
 virtual products and are marketed using the           The banking industry, in general, finds it                                                                  spectacular. A network of
 traditional techniques of packaging, promotion        profitable to focus on big businesses in                                                                    correspondent banks, arrangements
 and distribution. The reason for this is clear.       Colombo and major towns, but is faced with                                                                  with overseas banks, new branches and
 Banks offer services that have become                 substantial operational expenditure when it                                                                 a wide range of products kept it at the
 commoditised. Accounts – whether they are             pursues rural customers. Local banks such as                                                                forefront of banking in Sri Lanka. Today,
 interest bearing or current accounts, and even        Hatton National Bank (HNB), however, don’t                                                                  the bank’s state-of-the-art, high-rise
 loans and credit cards – offer very similar           face such daunting hurdles, thanks to a wide and                                                            headquarters is a landmark in
 features. As such, the banks differentiate            deeply rooted branch network across the island.                                                             Colombo, in the same way that its
 themselves by branding their unique attributes           Sri Lanka’s open economy sees more and                                                                   services are unmistakably Sri Lankan.                 Other key product enhancements and                 people what they want and its corporate image
 and communicating them in a highly competitive        more people from all sectors – both rural and                                                                                                                  innovations include internet banking services, a      – which is akin to a national institution rather
 marketplace.                                          urban – seeking opportunities for growth, and                                                               Product                                            payment portal, virtual banking, mobile phone         than a profit-making private company – have
    So how competitive is banking in Sri Lanka?        HNB is ideally positioned to leverage its                                                                   HNB offers a variety of banking products and       top-ups and leasing. Recognising the enormous         made HNB a household name in Sri Lanka.
 Just take a look at what the banks spend to           strengths. In the light of this, the bank’s                                                                 services to complement the diverse needs of a      contributions that migrant workers and the Sri
 simply stay in business. In 2005, the nation’s        Superbrand status is a fitting tribute to its                                                               growing nation. Instead of one-size-fits-all       Lankan community abroad make towards the              www.hnb.net
 financial sector spent over Rs. 1 billion on          success story.                                          A Bank that’s behind                                product offerings, the bank has added value to     economy of the nation, HNB has
 marketing and advertising, which is substantially                                                               every Sri Lankan smile.                           its savings account portfolio, branding it in      established strong ties with exchange
 higher than most other industries. (Source: SRL       Achievements                                                                                                different categories that cater to the diverse     houses and agencies. This facilitates inward
 MediaScan 2005).                                      HNB has all the hallmarks of a Superbrand –                                                                 segments of its customer base. There are savings   remittances from nations the world over
    In a market that generally sees just a handful     not just by virtue of its leadership status in the                                                          accounts tailor-made for adults, others that are   almost instantly. HNB’s trade services
 of competitors in any particular field, from          banking sector, but by the way it has integrated                                                            customised for children, young families and even   operations, which received ISO9001:2000
 FMCGs to services, Sri Lanka boasts over 40           itself into the very fabric of Sri Lankan society.                                                          senior citizens. And the bank’s housing,           certification from the Bureau Verities
 banks and financial institutions. Many observers,     True to its promise, the bank is a partner in                                                               educational and vehicle loans are helping more     Quality International, are centralised to
 in fact, feel that the country is highly overbanked   progress for over one million people. Notably,                                                              and more people achieve their goals in life.       provide an efficient and effective service
 and the market has reached saturation point.          this includes hundreds of thousands of rural         bank right in the heart of the tea country in the         HNB pays special attention to youth, with       to the bank’s clients.
 There is fierce competition in this relatively        people who have been brought into the formal         central hills. This was a good 60 years before         products designed to help them grow to
 small market and the big players include many         economy by a bank that chooses to tread the          Ceylon (a name synonymous, of course, with             become successful leaders. These include teen      Recent Developments
 international names that keep adding to the list.     difficult but often less profitable path – a bank    tea) earned its right to be independent. Tea was       credit cards, special savings accounts, and        For a bank with a history of almost 120
    At a macro level, this market saturation poses     that has made a genuine commitment to                on its way to international fame and needed a          education-driven and incentive-based growth        years, HNB has stood the test of time by
 many opportunities as well. Sri Lanka may be a        uplifting the standard of life in Sri Lanka. HNB’s   bank to keep its wheels of growth turning.             accounts. On the technology front, HNB has         changing with the times. As part of its
 small island of some twenty million people, but       islandwide network of over 150 customer              Hatton Bank consolidated its partnership with          been on the cutting edge of innovation for         constantly evolving process, the bank
 its geographical, demographical and economic          centres is testimony to its pioneering efforts in    the architects of the country’s economy, which         many years with a nationwide ATM network,          recently unveiled a new corporate
 demarcations can be intimidating to new               areas which have been stifled by poverty.            was hugely dependent on tea exports. In 1948,          on-line banking and telebanking facilities.        identity. With this change came a new
 entrants – especially to those that are not               In a banking tradition spanning over 100         when Sri Lanka gained independence from                   The bank is also highly accomplished in the     logo and corporate colours, heralding a
 rooted locally. The country is still burdened with    years, HNB has won many accolades. One               British rule, Hatton Bank also changed course –        sphere of corporate finance with facilities such   new order in customer relationships.
 a rural economy, with a fair share of the             among them is testimony to the bank’s                with an eye on the economic activities of Sri          as Asset Finance, Property Finance, Structured        HNB has also invested substantially in a
 population still living below the poverty line. But   triumphant legacy. With a large percentage of        Lanka’s post-independent era.                          Finance and Trade/Commodity Finance. Its loan      new international IT platform, custom-
 the Colombo-centric economy may seem                  the world’s population still below the poverty          Brown & Company, a respected engineering            portfolio also includes Working Capital and        made to offer enhanced benefits and
 attractive, since even the rural farmer is drawn      line, the international community has been           entity, acquired Hatton Bank and prepared the          Variable Rate Fixed Rate Loans. And HNB acts       product features to customers. The bank
                                                       searching for a practical micro-finance model.       small bank for what would become a trailblazer         as a licensed dealer in government bonds.          also streamlined its nationwide
                                                       High costs and risks, and the resulting low                                                                                                                    operations, bringing together different
                                                       returns, have made most banks shy away from                                                                                                                    departments and functions within one
                                                       micro finance. HNB, despite being a profit-                                                                                                                    centralised and hi-tech environment. These
                                                                                                                                                                                                                                                                              THINGS YOU DIDN’T KNOW ABOUT
                                                       oriented private bank, showed its commitment                                                                                                                   measures are expected to reduce operational
                                                       to the Sri Lankan people by launching micro                                                                                                                    costs, and allow greater flexibility and timely         HNB
                                                       financing in 1989.                                                                                                                                             delivery of customer solutions.                         HNB was the first and only Sri Lankan bank
                                                           The model, aptly named The Village                                                                                                                                                                                 to be listed internationally on the
                                                       Awakening, today involves more than 250,000                                                                                                                    Promotion                                               Luxembourg Stock Exchange.
                                                       people from over 50,000 families. It has opened                                                                                                                HNB’s approach to marketing and advertising
                                                       the doors to a new lease of life, so to speak, for                                                                                                             has, in effect, changed the modus operandi of           It was the first commercial bank to introduce
                                                       many Sri Lankans. The World Bank has hailed                                                                                                                    banking in Sri Lanka. The bank was the first to         housing loans.
                                                       this novel model because it proves beyond                                                                                                                      brand an account, backing it with a strong public       Amongst commercial banks, it was the first to
                                                       doubt that banking products can be offered to                                                                                                                  promotional campaign and offering valuable              introduce pawn broking services, personalised
                                                       the poor in a viable manner.                                                                                                                                   prizes. HNB’s flagship Pathum Vimana savings            credit cards and affinity cards.
                                                           Among the other accolades, HNB emerged                                                                                                                     account draw still attracts huge public interest –
                                                       as winner of the National Business Excellence                                                                                                                  and many other banks have now turned to                 It was the first commercial bank to brand a
                                                       award for Banking/Insurance in 2004 and was                                                                                                                    promotions as a means of attracting customers.          financial product (Singithi Minor Savings
                                                       runner-up at the National HR awards in the                                                                                                                     HNB’s aggressive and ground-breaking                    Account). Currently, some 500,000 Singithi
                                                       same year. For over ten consecutive years, its                                                                                                                 advertising strategies have paid rich dividends,        jumbo tills serve as mini-banks for children all
                                                       annual report has maintained its position as                                                                          You rise from the watery earth,          with its products playing a leadership role.            over Sri Lanka.
                                                       sector winner. HNB is currently placed among               A Bank that continues to contribute to our                         To toil in search of the sun
                                                                                                                  nation with its multi-faceted outlook on life.                And bloom to be praised               Brand Values                                            HNB also introduced the most successful
                                                       Sri Lanka’s ten leading listed companies in an                                                                                                                                                                         micro-finance programme in the country
                                                       annual ranking compiled by LMD, the country’s                                                                                    By a thousand eyes.           The bank feels the pulse of the people and its          (Gami Pubuduwa – Village Awakening).
                                                       premier business magazine.                                                                                                                                     products have enhanced the lifestyles of millions.
                                                                                                                                                                                                                      The phenomenal success of HNB’s brand is                On a clear day, from its headquarters in
                                                       History                                                                                                                                                        testimony to how it closely integrates into the         Colombo, Adam’s Peak – in Hatton, the
                                                       HNB began as Hatton Bank in 1888, a planters’                                                                                                                  lives of Sri Lankans. Its relentless quest to offer     birthplace of HNB – is clearly visible.

40   SUPERBRANDS                                                                                                                                                                                                                                                                                                 SUPERBRANDS     41

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