Clear rules shared, resources for banks and fintech mooted
The FinTech Forum is working with the Central Bank to obtain a regulatory licence for fintechs in the country, a top official said.
“We are discussing with the Central Bank about getting regulatory licences for fintechs and pushing for progress in regulation,” Chairman, FinTech Forum of Sri Lanka, Channa De Silva, told The Sunday Times Business recently. He said that currently, there is a 4.5 per cent cash circulation over GDP in the country, and the target is to get it to 3.5 per cent in three years.
At the Sri Lanka Fintech Summit, which was held recently, he said, six roundtables to address critical issues in the industry were convened, and a report in this regard will be ready within about a month.
Managing Director/CEO of HNB, Damith Pallewatte, with HNB as the main organiser of this recently held event, pointed out that the region’s two most dynamic economies – India and China – have fintech adoption rates that have reached over 80 per cent, resulting in significant financial inclusion gains among previously unbanked populations.
Sri Lanka is already off to a strong start, he said, noting that “We have more mobile connections than people, and a notable majority are broadband-ready. The industry has also built sturdy foundations with platforms, while Digital payments growth momentum is rising with LankaPay processing ~404 million online transactions, up ~48 per cent year-on-year.” Despite all this, he said that cash remains sticky, particularly at the grassroots of the economy.
“However, we should be clear about our position. While we are strong on connectivity, by comparison, we still lag on fintech and digital payments ecosystems,” he said.
He noted fragmentation, no transaction frequency, limited data sharing and trust and literacy as barriers in fintech development.
“Currently, there are still too many silos between banks, fintechs, regulators and investors. While bilateral pilots offer powerful proof of concept, we need more shared utilities that all stakeholders can plug into.” In terms of low transaction frequency, he said, per-person digital usage is still low, and until payments are a daily habit, the benefits stay theoretical. “Without common standards and consent-based data mobility, credit cannot find those who deserve it. Open data—done properly—is the difference between guesswork and precision. The lack of trust and literacy is also an issue. People do not adopt what they don’t understand or trust. Mass adoption is therefore a multi-stakeholder challenge that will require collaboration, education, and incentives to overcome. We need plain language, transparent pricing, visible redress, and products that respect the customer’s time and attention.”
He urged the government and state regulators to assist the banks, move faster with clear, agile rules and requested the banks to commit resources to the rails. “Stop duplicating cost where we can share, publish APIs, price fairly, measure and report usage—not downloads. Start-ups and investors are made to come up. Bring problems worth solving and build for MSMEs and the underserved. Design for trust from day one. Partner with incumbents to scale responsibly. Academia and development partners: help us measure what matters and raise digital and financial literacy nationwide.”
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