BANGKOK: Black-suited hipsters, hair spiked at rakish angles, await customers. People rea- ding magazines lounge on chairs resembling bent pipe cleaners. A disc jockey spins tunes.
Customers could be forgiven for thinking they have wandered astray on their way to paying their bills or applying for credit. But the cavernous white room is indeed a branch office of a Thai credit card company.
“I feel bored when I have to be in a conventional bank. There are queues everywhere and it's very cold,” said Niwatt Chittalarn, president of Krungthai Card PCL (KTC), 49%-owned by top state bank Krung Thai Bank.
“We have greeters here, we play music for you, we tell you about promotions, and when your number comes up, we tell you in person. If you like conventional service, you can go to Krung Thai Bank.”
KTC, Thailand's top credit card issuer, is an example of the lengths banks will go to for a bigger chunk of the consumer lending business as lending has stalled six years after the Asian economic crisis of 1997/98.
With interest rates at record lows, the blue-chip companies which banks feel comfortable lending to, are turning increasingly to the debt market for funding to lock in lower long-term borrowing costs.
Analysts say that leaves banks with few options: poaching existing corporate customers from other banks by slashing lending rates, which crimps profit margins, or battling over a small but rapidly expanding consumer market estimated at 10% of bank loans.
Companies such as KTC are hoping to lure retail business with a customer-friendly atmosphere that will encourage people to stay long enough to do a range of business from paying bills to applying for loans. – Reuters