KUALA LUMPUR: Amid stiff competition in the banking space, CIMB Bank Bhd is aiming for a stronger market share in consumer banking which is a significant contributor to the group’s earnings.
The group’s regional consumer banking business chalked up a 35% year-on-year growth in pre-tax profit to RM2.27bil for its financial year ended Dec 31, 2016 (FY 2016), accounting for 46% of group earnings.
CIMB Bank CEO for group consumer banking Samir Gupta told StarBiz that the bank aimed to improve its market share and overall consumer banking business by focusing on key areas like digital, analytics, partnership and customer experience, among others.
He said with digital methods, the bank was looking to reshape and build the group’s consumer banking regionally.
He added that more than 90% of CIMB’s total banking transactions in the country were done through digital and self-service channels.
CIMB Clicks, recorded a 25% year-on-year increase in active users, while CIMB Bank’s mobile banking transactions grew over 170% in the third quarter of last year compared with the similar quarter in 2015.
To strengthen its electronic platform via mobile and digital, further enhancements would be made to its conversational banking mobile app dubbed CIMB EVA (enhanced virtual assistant).
The app is a two-way messaging application between customers and the bank and used to address needs such as checking account balances, paying bills, performing mobile reloads and receiving the latest offers by the bank.
Plans are underway, to add functionalities and to make the app more “intelligent” to advise them on their daily transactions.
“The bank is also looking at further spearheading its digital technology and analytics initiative in Vietnam, which will be the group’s test bed in the region over the next six to nine months.
“If successful, this technology would be replicated in the group’s other markets in the region. Towards this end, the bank is engaging with financial technology (fintech) providers,” he noted.
He said CIMB Bank was in the process of selecting its fintech partners in Vietnam as it gears up to start its operations with the latest technology there this year.
“The pilot project will be carried out at our branch in Vietnam and the technology will eventually be used within CIMB’s regional operations with some modification to ensure its success. We have drawn up the strategy and now it is a matter of selecting the right fintech partners.
“The bank is very selective in getting the right partners who can provide the right technology.
“CIMB Bank is investing substantially in digital/fintech initiatives and there is a good opportunity for the bank to leverage on the latest technology with our fintech partners as we don’t have any legacy systems in our operations there.
“The bank will be coming out with new systems altogether compared with the legacy ones,” he said.
For a start, the bank has three basic products, Samir said, adding that there were plans to expedite loan approval and account opening processes for better customer experience. CIMB Group currently has a branch in Vietnam and will soon be opening another one there.
In the meantime CIMB FinTech, a new unit in the bank, has been set up as one of the group’s T18 initiatives, in a bid to be a leading digitally-driven universal bank in Asean.
With this unit, he said the bank would be in a position to forge collaborative partnerships with fintech providers and offer innovative solutions to customers to stay ahead of competitors.
In terms of analytics, Samir said the bank wanted to add value via personalised and contextual offering across customer touch points and would be making further investment in data and processes. “With big data, we can identify our customers’ spending and segment them in different groups to ensure better customer experience. The bank does not want to be a product pusher but rather look at meeting customers diverse needs,” he added.
Customer experience, he noted, would be the differentiator for the bank compared with its peers in the industry.
“We are at the first stage in our five-year journey to improve customer experience. While products can be replicated by other banks, customer experience is not that easy to replicate. Faster loan processes and approvals is another area among the many areas which the bank is continuous looking at improving. We want to digitise, add analytics and robotics plus a human touch to our consumer banking business,” Samir said.
For FY 2016, Samir said consumer banking business in core areas had outperformed the industry in terms of earnings growth, adding that the goal was to maintain this momentum going forward.
For example, in the mortgage business, it grew 11.5% as opposed to the industry’s 9.2% growth last year, commanding a market share of about 14%.
The bank’s credit cards business grew by 5.7% against the industry’s 3.8% growth (raising its market share to 15.5%). Auto and consumer deposits grew by 3.7% and 10.5% respectively, outperforming the industry’s growth which declined 1.2% for auto and a 4.7% growth in consumer deposits.
The bank was recently conferred an award by the Asian Banker in Tokyo for Internet Banking Product of the Year in Asia-Pacific (2017) due to the success of CIMB EVA and it also bagged the award for the best retail bank in Malaysia.