The Banking Revolution in Cambodia: An Interview with Saly Lor of J Trust Royal Bank

In this episode of The PayTech Show, FF News delved into the dynamic banking and payment ecosystem of Cambodia with J Trust Royal Bank in Phnom Penh, where we interviewed Saly Lor, the Chief Operating Officer (COO).

Saly Lor began his journey with J Trust Royal Bank in 2005, steadily progressing through various roles until he took on the position of COO in 2019. His extensive experience encompasses overseeing institutional operations, personal banking, property and administrative functions, as well as central operations.

Under his leadership, the bank handles crucial aspects such as reconciliation, analytics and information management, project management, and transformation initiatives.

Lor provided an insightful overview of the rapid evolution of Cambodia’s banking ecosystem over recent years. Recognized as an emerging financial market, Cambodia has witnessed significant growth in deposits, assets, lending, and both domestic and international payments. New players have entered the market, and there has been a marked shift in consumer behavior, with an increasing number of people integrating banking into their daily lives and business transactions.

One of the most notable trends Lor highlighted is the transition from traditional to digital banking. Consumers in Cambodia are now embracing mobile banking, foreign payments, and QR code scanning, moving away from conventional banking methods. This shift is driven by several factors, including political and socio-economic stability, technological advancements, and the impact of the COVID-19 pandemic, which accelerated the adoption of digital banking solutions.

Discussing the future of banking in Cambodia, Lor emphasized the country’s favorable conditions for growth. With a young and dynamic workforce, a median age of 26, and a strategic geographic location at the heart of Southeast Asia, Cambodia offers significant opportunities for banks and fintech companies. The nation is projected to continue its robust economic growth, with a 5.6% increase anticipated in 2023 despite global geopolitical tensions.

Lor pointed out that while banking activity has increased, there remains a substantial unbanked population, presenting a significant opportunity for financial institutions to expand their reach. Additionally, there is a segment of wealthy senior clients who prefer traditional banking methods and represent another potential market for banks to educate and transition to modern banking services.

The competition in Cambodia’s banking sector is intense, with a mix of large and small banks vying for market share. This competitive landscape drives innovation and investment in sophisticated technologies, although the pace of development can vary depending on the scale of the bank’s operations.

Lor also discussed the importance of cross-border payments, noting the increasing volume of imports and exports and the growing demand for efficient, real-time, and low-cost international payment solutions. The National Bank of Cambodia has been proactive in facilitating both domestic and cross-border payments, launching initiatives like the cross-border QR code system in collaboration with regional partners.

Emphasizing the significance of adopting international standards, Lor highlighted J Trust Royal Bank’s early move towards ISO 20022 compliance. This global standard for electronic data interchange between financial institutions enhances processing, reporting, and reconciliation capabilities. By adopting ISO 20022 ahead of the 2025 deadline, J Trust Royal Bank aims to ensure a smooth transition, minimize risks, and provide seamless services to its customers.

Looking ahead to 2025, Lor envisions a continued positive trajectory for Cambodia’s banking and cross-border payment sectors. He anticipates that customer expectations will drive further advancements, with real-time, low-cost, and predictable transactions becoming the norm. Banks will need to be agile and invest in infrastructure to meet these demands, demonstrating a commitment to thriving alongside their customers.

In conclusion, Saly Lor’s insights offer a comprehensive view of the transformative changes occurring in Cambodia’s banking sector. J Trust Royal Bank is poised to leverage these opportunities, driven by a customer-centric approach and a commitment to technological advancement, positioning itself as a leader in the evolving financial landscape of Cambodia.