Financial services industry critical to emerging economies

Indunil HEWAGE

Financial services organizations should focus on improving profitability in the context where new manipulations and challenges are the order of the day.

“The industry should look at balancing the demands of regulatory change. The financial services industry should remain as essential and important part of the economy, but the challenges faced by this industry are diverse. Therefore regulation is an important factor for stability and success. We must expect and encourage better regulation which should be both effective and of high standards. Today in these challenging times, it is important that we all unite, work together and learn lessons from both at local and global level,” a senior bank official said.

The financial services industry is critical to emerging economies such as Sri Lanka; as productivity increases in the financial sector, it is important to ensure that the growth is allowed to develop organically.

With the global financial system at historic level at this point,credit in the future is a challenge not only from the long term perspective,but also from near-term perspectives as well. Over the long term the range of external forces, critical uncertainties will shape the future of global and even local financial system .

DFCC Bank Chief Executive Officer Nihal Fonseka said the entry of Sri Lankan banks into the global market is a highly regulated business where banks will have to follow and adopt certain regulations.

“It is no longer an easy task to enter into another market,sometimes the size of the industry becomes a major impediment for us to penetrate into another market. Being a small player, local banks would find it quite difficult to expand its presence in the region rather than a big player,” Fonseka said.