Digitization in banking will give this sector resilience against the current Covid-19 situation and ensure sustainable growth in post Covid era. Future bank in the new normal will be more data driven, more in the cloud and modernized IT infrastructure, said Humaira Azam Managing Director & CEO, Trust Bank Ltd. (TBL).
“I believe a hybrid model of online and offline engagement with increasing importance on digitalization is going to be the best option in the context of Bangladesh at this moment”,Humaira added.
She made the observations in an exclusive interview with daily Bangladesh Post.
Replying to a set of queries, this highly experienced, most dynamic and first ever MD & CEO of the country’s banking industry, Humaira Azam painted a perfect picture of the contemporary banking industry, it’s problems, prospects and future potentials .
The excerpt of her interview is produced for the valued readers of Bangladesh Post.
Bangladesh Post: First of all, let’s express our heartiest congratulations and greetings to you on becoming the country’s first ever female Managing Director & CEO of a Bank. Would you please share your impressions and reactions with us in this regard?
Humaira Azam: Alhamdulliah and thanks to Almighty Allah Subhanahu Wa Ta’ala. Becoming the CEO and managing director was not a new thing for me. I had the experience of being MD & CEO of IPDC Bangladesh in 2009. I believe Competency can never be the parameter to look forward to while appointing a CEO.
The organisations, which believe in transparency and follow corporate guidelines, give the highest importance on finding out the most suitable and skilled one for the top post. I would like to express my heartfelt thanks to my Chairman, Vice Chairman, Board of Directors of the bank for their trust and confidence in me for taking this decision.
Bangladesh Post: You have taken the responsibility as chief executive of a financial institute at a juncture when the total financial sector, banking business is facing tremendous setback due to the long term impact of Covid, so could you please tell us whether you have any plan to re-design or bring any strategic changes for smooth functioning of your bank amid this pandemic?
Humaira Azam: Trust Bank strives to deliver best customer experiences which translates into a respectable set of results & allows to achieve its budgetary targets in various parameters. At this time of economic meltdown from unprecedented spread of COVID-19 my approach will be to focus on reasonable business risk in making credit decision including certain flexibility to allow businesses to run at the time of pandemic while creating an atmosphere of survival for businesses.
Banks are currently facing an unprecedented global crisis due to the corona-war, and customer relations are also taking a hit as a result. Though the ongoing pandemic has necessitated digital-oriented way of banking, I believe a hybrid model of offline and online engagement with increasing importance on digitalization is going to be the best option in the context of Bangladesh at this moment.
Bangladesh Post: As a successful female professional, how would you evaluate the issues like women empowerment, entrepreneurial opportunities for women folks and challenges they face as hard reality in a country like Bangladesh?
Humaira Azam: In the context of Bangladesh, women still prefer to keep themselves in their own boundary. Women have to work at home and outside of home simultaneously. Maintaining a balance between work and life is vital to find success in life for a woman. I have always tried to focus on my work. My suggestion is that women should work hard, learn the ropes, develop their communication skills to be successful in their career & show their capability to compete with men. The qualities mentioned along with confidence can help women reach a top position.
Bangladesh Post: We know that your bank cherishes a vision to build a long-term sustainable financial institution through financial inclusion and deliver optimum value to all stakeholders with the highest level of compliance, well, now please brief us how far this vision has so far been possible to meet?
Humaira Azam: Well, we have 60 Rural Branches for ensuring banking services to underprivileged part of population. We are financing through different micro-financing institutions and around BDT 24 billion in SME loans. We have introduced low cost banking services, different savings schemes for school going kids, special product for old aged people. At present, we have brought more than 25,000 school banking savings accounts under our umbrella.
In addition, we have gone into a partnership with Axiata Digital Services Sdn Bhd, Malaysia for advancing of digital banking platform at the most innovative development. With the underlying objective of ensuring a wide range of mobile financial services (MFS) for banked and unbanked population of Bangladesh, Trust Axiata Digital Limited (TADL) has executed the launch of its MFS product in 2020 with the brand name “tap”, that offers the most convenient, flexible, secured and affordable services and gains a wide range of financial inclusion of people from all level of income.
Bangladesh Post: We know that the banks or NBFIs provide special facilities for SMEs specially for promoting women entrepreneurship, well, as an expert banker please brief us the reality and tell us how would you facilitate this move sitting at the helm of a FI.
Humaira Azam: Banks & financial institutions of Bangladesh play a significant role in bringing women into the mainstream financial system. Todays Banking is committed not only to unleash the potential of women entrepreneurs but also regularly organizing advising and consultancy services for skill development, to give women in the workforce access to finance.
At present, the number of women entrepreneurs is increasing day the day, and an increased number of them are getting banking services now. Banks are now not only extending loans but also working for developing women entrepreneurs.
To help the women entrepreneurs grow their business, Trust Bank Women Banking has a wide range of finance facilities starting from personal loan, professional loan to SME loan. Through our plethora of products and 360-degree unparalleled banking services, we continue to build strong relationships with our female clients.
Bangladesh Post: Now please tell us about the asset base, capital base, manpower structure and branch network of your bank and say what will be your plan for further expansion of your activities?
Humaira Azam: Trust Bank Limited is one of the leading private commercial banks having a spread network of 113 branches & SME centers, 244 ATM Booths and 140 POS in 113 Branches across Bangladesh and aims to open more branches to cover the important commercial areas in Dhaka, Chittagong, Sylhet and other areas in coming years.
Going forward, we are planning to open sub-branches in different parts of the country and where there is a scope of business growth we need to capitalize the opportunity. Though the country navigated through subdued global economic conditions, Trust Bank displayed impressive result in terms of profitability, risk mitigation, good governance of liquidity management.
Total deposit of the bank registered a formidable growth of 13.78% with reference to previous year which is a testament of growing confidence of our valued depositors. Loans and advances posted a growth of 6.84% largely at core business activities.
Bangladesh Post: As an expert with long time experience in commercial banking, would you please tell us about the necessity of up-skilling and further modernizing the banking services comparing to the developed world banking practices?
Humaira Azam: Banking has been much different than it was pre-pandemic. It is also widely recognized that digitization in banking will give this sector resilience against the current Covid-19 situation and ensure sustainable growth in post Covid era. We see a digital transformation in the banking sector as most of our services have digitized.
Future bank in the new normal will be more data driven, more in the cloud and modernized IT infrastructure. Going forward, the bank will be highly automated, leverage Artificial Intelligence (AI) and adopt more integrated digital sales & servicing capabilities. As such an endeavor to introduce “Trust Axiata Pay” has brought innovation to the sophisticated digital payment movement system.
On the contrary, Cyber risk is proportional to digitization. We cannot prevent cybercrimes but we have to prepare to deal with the risk. We have to take measures to mitigate these risks, which is why investment in the IT sector has to be increased substantially, in both physical infrastructure and software upgradation.
Bangladesh Post: We know that the banking sector is bearing a huge burden of Non-Performing Loan (NPL) which is being heavier day by day; would you mention the possible solution to get rid of this vice? Please mention the NPL situation in your bank.
Humaira Azam: The gradual increase of non-performing loans has been a serious concern for banking industry for last few years which blurred many valuable contributions of our financial system. Though default loans went down in 2020 on the back of a general forbearance on loan payments, it does not give us the necessary confidence as the fall happening through pandemic did not paint the actual scenario.
As the economy and the financial system continue to grow significantly, the country needs an efficient contract enforcement system to facilitate private sector operations, particularly in dispute resolution and debt recovery.
Bangladesh has one of the slowest court litigation processes: there are more than 60,000 cases pending in different money loan courts of the country.
Alternative Dispute Resolution (ADR) mechanisms can be particularly helpful for the financial sector to settle disputes out of court. Actively practicing ADR successfully mitigates the complexity and delay of litigation, simultaneously ensuring a harmonious relationship among the parties.
Bangladesh Post: How would you assess the role of agent banking in wider expansion of the banking services? Also please tell us what more effective ways and means are there in your thoughts to facilitate banking services.
Humaira Azam: Agent banking system has gained popularity in rural areas and bringing the unbanked populations under the mainstream banking umbrella to accelerate financial inclusion, which was earlier mainly driven by the non-governmental organization (NGO). There are some problems that agents are facing from the beginning such as lack of trust and reliability by rural people, no fixed income for them, lack of proper training, limited services, etc.
However, definitely the alternative model of sub-branch is more acceptable and workable as far as the transparency is concerned. The sub-branch is functioning as a new dimension to the banking sector of Bangladesh within limited expenditure under the supervision of a nearby full-fledged branch of a bank.
The overhead cost is lowered by 90 percent in the sub-branch. In addition, transactions at the sub-branches are carried out on a real time basis and customers receive instant notifications against their transactions. The model is gaining popularity as a cost-effective delivery channel as well as a convenient way of providing banking services to the mass people.
