Conrad Dias, who serves as the Vice Chairman of the Fintech Forum Sri Lanka and is also the Chairman of LOLC Finance PLC, asserts that the next phase of Sri Lanka’s fintech landscape involves facilitating local fintech firms’ access to broader regional markets, fostering stronger ties with banks and regulatory bodies, and establishing a resilient ecosystem for sustained growth.
For fintech enterprises in Sri Lanka, a significant impediment to expansion is not the lack of innovation, but rather the limited market size. With a population exceeding 20 million, successful fintechs will ultimately need to extend their reach beyond the nation’s borders to achieve substantial scale.
According to Dias, it is crucial for the fintech ecosystem in Sri Lanka to prioritize pathways into larger regional markets. “If our fintechs can enter a market in Africa, for instance, they could tap into around 200 million consumers,” he noted. “That figure is nearly ten times the size of Sri Lanka’s market.”
Dias emphasizes that the primary challenge lies not in producing innovative fintech solutions but in ensuring that the ecosystem supports these innovations in scaling to markets that can sustain globally competitive firms.
The Fintech Forum is working towards this goal by uniting banks, finance institutions, fintech startups, payment service providers, technology companies, regulators, and policymakers to enhance industry cohesion and collaboration.
Currently, nearly all banks in the country are involved alongside fintech firms, LankaPay, and other essential stakeholders, with the Central Bank of Sri Lanka actively participating as well.
This foundation has allowed the Forum to progress into its next stage, which places a stronger emphasis on accelerating innovation, improving policy engagement, and exploring opportunities for regional growth.
The previous year’s Sri Lanka Fintech Summit marked a significant turning point in unifying the ecosystem. Building on that success, this year the Forum intends to host an expanded Fintech Festival aimed at gathering an even wider array of industry participants.
International collaborations are becoming increasingly vital to the Forum’s strategy, with Dias highlighting the need for these partnerships to translate into concrete business opportunities rather than remaining solely networking-focused.
The Forum has already forged connections with fintech associations in Singapore, Taiwan, and Africa, thereby creating avenues for knowledge exchange, business networking, and potential market entry.
While Sri Lanka offers a conducive environment for developing, testing, and validating fintech solutions, Dias points out that achieving sustainable commercial growth often necessitates access to significantly larger markets.
By leveraging relationships with international fintech ecosystems, the Forum aims to assist Sri Lankan companies in identifying potential partners, understanding regulatory frameworks, and exploring expansion avenues that may be challenging to pursue alone.
Dias believes that successful international growth must be supported by a robust domestic fintech ecosystem. The Forum’s initiatives focus on three interrelated areas: enhancing collaboration among industry stakeholders, advocating for policies that promote innovation while ensuring financial stability, and fostering ecosystem development through knowledge sharing, workshops, industry events, and international collaborations.
These efforts aim to eliminate barriers that individual fintech companies may struggle to overcome independently, facilitating the swift transition of innovative ideas from development to commercialization.
Improving financial access for small and medium enterprises (SMEs) and micro-SMEs is another significant focus area. Traditional financial institutions often find serving these segments costly due to regulatory, governance, and operational demands. Conversely, fintech companies are increasingly creating digital solutions that can efficiently cater to these businesses.
Dias advocates for collaboration rather than competition between fintechs and traditional banks, suggesting that this synergy can effectively enhance financial service delivery. Fintechs can introduce innovation and improved customer experiences, while banks provide reliable financial infrastructure, governance, regulatory adherence, and institutional trust.
By merging these strengths, financial services can be extended to historically underserved businesses.
Dias cited buy-now-pay-later (BNPL) platforms in Sri Lanka as an early example of embedded finance. However, he perceives a much broader potential for similar financial solutions to be seamlessly integrated into e-commerce platforms, super apps, digital marketplaces, and industry-specific ecosystems.
He anticipates significant growth in embedded finance over the next three to five years as open banking evolves, allowing financial services to become more seamlessly integrated into existing digital experiences utilized by businesses and consumers alike.
As fintech innovation progresses, Dias believes that regulatory frameworks must evolve in tandem with technological advancements.
Digital lending is an area garnering increased attention. While licensed banks and registered financial institutions operate under established regulatory guidelines, some online and fintech-driven lending platforms may function outside traditional frameworks, potentially posing risks to borrowers, including SMEs that might not fully grasp the implications.
Dias argues that clear and proportionate regulations can bolster confidence among consumers, financial institutions, and fintech companies without stifling innovation.
The Forum is actively collaborating with the Central Bank to promote regulatory frameworks that encourage innovation while enhancing consumer protection. Citing international examples like Singapore, Dias believes that clearer governance can ultimately lead to a healthier and more sustainable fintech ecosystem.
In response to inquiries regarding industry-wide data sharing and access to datasets such as CRIB, Dias mentioned that performance data sharing is already occurring within the LankaPay ecosystem. However, broader access to specific datasets will require deeper collaboration between banks and fintech firms.
He emphasized that banks play a crucial role in providing the trusted frameworks, governance, and institutional structures necessary for the sustainable development of the fintech ecosystem. As collaboration deepens, the Forum aims to foster an environment where innovation can flourish without compromising essential safeguards within the financial services sector.
Dias views fintech as a vital enabler of Sri Lanka’s broader digital economy, with the potential to empower entrepreneurs, expand access to financial services, and enhance collaboration throughout the financial ecosystem.
For Sri Lankan fintech companies, this acceleration increasingly means looking beyond a domestic market of just over 20 million people and forging partnerships that can unlock access to significantly larger regional prospects.
By reinforcing collaboration among local stakeholders and developing international partnerships across Asia and Africa, the Fintech Forum aims to facilitate the transition of Sri Lankan fintech companies from promising local innovators to commercially viable regional entities.
Image Caption: Conrad Dias – Vice Chairman of the Fintech Forum Sri Lanka and Chairman of LOLC Finance PLC
Financial Chronicle Biz English | Sri Lanka Business News.
