SCB moving towards 'customer-centric'
Siam Commercial Bank (SCB) plans to reorganise its retail business over the next three years by focusing on what customers really need instead of just offering products to them.
This customer-centric strategy will help SCB access clients in the most appropriate manner and help sustain its competitive advantage, said president Kannikar Chalitaporn.
"From now on we will focus on customer requirements, not the bank's requirements," she said.
The changing needs and lifestyles of customers forced the bank to rethink its business platform, from using products to lead customers to allowing a focus on customer service to lead to new products, she said.
For example, customers of housing projects financed by SCB will be given special interest rates that vary according to their credit risk: the lower the risk, the lower the rate.
The hope is that the customer-centric platform will strengthen cross-selling of services, as clients learn what the bank can provide in the SME (small and medium-sized enterprises) value chain and wholesale banking.
"The customer is central to our provision of services and products," she said. "After we know what customer requirements are, services and products will be designed" to meet those needs.
She said a key challenge arising from this changed business platform would be to encourage its 10,000 retail staff to provide services across segments.
"We have to encourage all staff to think that what they are doing is for the whole bank and not only for retail banking or SME banking or wholesale banking."
To this end, the bank will provide training to its employees.
The new business platform will take at least two years to phase in before seeing full implementation in the third year.
Kannikar said SCB needed to change focus towards improving fee income. Despite the trend to higher interest rates, banks' net interest margins (NIMs) are unable to widen because of strong competition in the banking industry.
The NIM of SCB this year is expected to stay at 3.2 per cent, similar to last year, or it could decrease to 3 per cent.
"We told analysts at the beginning of the year that NIM cannot be widened, which they did not believe, but today they believe what we said is the truth," Kannikar said.
As the bank has confirmed that it cannot avoid a lower NIM, non-net interest income (non-NII) is becoming the focus instead, she said.
Kannikar added that non-NII within three to five years must be increased to 50 per cent from 40 per cent currently, and SME and wholesale banking are the two key drivers of non-NII.
