SCB hopes wealth management will offset dwindling fee income
WITH FEE income from retail banking payment services drying up, Siam Commercial Bank (SCB) is pinning its hopes on wealth management to shore up revenue, said Arthid Nanthawithaya, president and chief executive.
Arthid said that while SCB had only a small share of the market for electronic data capture devices and mobile banking, the bank expected income from services and payments would be squeezed significantly as digital banking gained momentum and the national e-payment system came on line.
In contrast, he said fee income from wealth management shaped up as a more stable revenue stream.
He cited the growing ranks of the so-called mass affluent, with Thailand supporting millions of people in this segment. Atop them is a layer of those defined as affluent, typified by mid-level executives and owners of small and medium-sized enterprises.
Arthid conceded that, until now, the bank had not fully tapped the potential business streams from wealthy clients.
SCB has less exposure to wealth management and SMEs than its peers, he said, noting that the bank had become over-reliant on its wholesale banking and mortgage businesses. The bank needs a more diversified income base, the CEO said.
“We should try to attract deposits from executives of corporations and SME owners. The bank believes such clients amount to about 400,000 to 500,000 individuals. We are targeting people with an initial amount of Bt1 million each, and will manage their wealth, including those with assets totalling Bt400 billion to Bt500 billion,” Arthid said.
“Fee-income contributions to retail banking should come more and more from the affluent. They will be an importance base for lending and investment. Therefore, the bank is giving more importance to building a foundation on fee incomes in order to put the bank on a stronger footing in the long run.”
Thailand has total deposits of Bt14 trillion, half of which pay high interest, and about 30 per cent – or Bt5 trillion – could turn to investment products, and that is the focus for SCB, he said.
The bank aims to integrate its retail banking products more closely with the services provided by the investment arms of the SCB Group. This will be more convenient for the bank’s wealthier customers, Arthid said.
To achieve this aim, the bank’s lending products and wealth-management products would be placed on the same platform for mobile banking customers.
“From the year 2017, we will drive retail lending and wealth management on the same platform and we will use data analytics to analyse the customers’ needs in conjunction with the team that services customers,” he said.
Mobile will be a key platform for engaging with all the bank’s customers, with a revamped mobile banking application to be launched in the first half of 2017.
“If we are gearing towards digital banking on mobile, we aspire to make our mobile banking service the best possible one for our customers,” Arthid said.
SCB had earlier sought a strategic partner for wealth management but decided to push ahead on its own to lay the foundations for a stronger businesses in this sector, along with investment and life insurance, he said.
Beginning this year, employees in the sale and services sections at branches will be separated. Service staff will be overseen by SCB first executive vice president Phanporn Kongyingyong and sales staff will be managed by first executive vice president Narong Srichukrin.
