CTBC Bank: What it takes to be the top bank in Taiwan

Amy Lin, Head of Retail Banking Product Group of CTBC Bank looks back over a successful year of international awards and recognition and considers the biggest factors behind the bank’s achievements. An exclusive interview by Efma's Anne-Laure Jozan.

Publish date: 10 December 2019
Author: CTBC Bank
Theme : Digital/Mobile channels

CTBC Bank has topped the list of Taiwanese banks for three consecutive years. What lies behind your institution’s success and recognition from the industry?

According to the latest list of the Top 1000 World Banks published by the leading financial magazine The Banker, CTBC Bank ranked 148th among the worlds’ top 1000 banks in 2019, up three notches from 2018, leading Taiwan's banking industry for the third year in a row. This is also the first time ever that a Taiwan bank was placed among the top 150 in the world, a manifestation of CTBC Bank ’s excellent performance, high risk tolerance, and operational sustainability.

Last year also saw our recent international expansion pay off, with the bank’s overseas profits increasing by 22%. The excellent performance of Thailand’s LH Financial Group, in which CTBC Bank invested in 2017, was particularly demonstrative of the benefits of our network’s synergies. Xiamen Jinmeixin Consumer Finance Co., Ltd., a joint venture established in Xiamen by CTBC Bank and two mainland Chinese companies, began operations towards the end of 2018 and realized profits within its first fiscal year of operations.

We place great importance on the customer experience and to this end, we strive to develop innovative and intuitive digital financial services. For example, noting that a growing number of customers are accessing financial services through their mobile devices, we upgraded our Home Bank app in 2018 to include industry-leading and user-friendly functions like voice-command transfers, a simplified log-in process, faster browsing, more diverse payment methods, and a robo-adviser. This combination of innovative technology and robo-advisory services is providing local customers with a new financial experience. CTBC Bank’s digital innovation plan also includes its physical branches across Taiwan, all 152 of which have been upgraded to enable digital operations. Furthermore, we launched our mobile financial service, which combines online and offline financial services across various channels such that the services provided are no longer subject to the time and location constraints of physical branches.

We have also continued to use ATMs as a centerpiece of our digital financial service efforts; in 2018, we launched first-of-their-kind smart X-ATMs, which integrate four major functions: finger-vein recognition, multi-language support, coin deposits, and foreign currency withdrawal. The bank also developed technology that integrates Big Data and facial recognition and can be used in the future to detect suspicious cash withdrawals and prevent fraud. In addition, CTBC Bank harnessed blockchain technology to successfully accelerate the trade financing process. The bank also applied the same technology to its payment confirmation services to provide a verifiable, trustworthy money-flow mechanism that can greatly increase the operational efficiency of merchant clients and reduce the risks of identity theft and fraud.

A highlight of our business development in 2018 was our continued leadership in Taiwan’s mobile payments market. In this respect, we have introduced more diverse payment tools and expanded our mobile payment channels. Our LINE Pay co-branded card was the driving force behind our credit card issuance volume topping the market in 2017 and 2018. Our success in engaging social media communities was crucial to cultivating younger consumer groups.

In addition to its outstanding business performance, CTBC Financial Holdings also actively responds to the UN’s Sustainable Development Goals (SDGs) and has long been committed to promoting corporate sustainability through the five categories of corporate governance, environmental sustainability, employee care, product services, and social participation, to fulfill its corporate social responsibility goals.

Could you explain how the bank’s accelerated digital transformation is bringing operational efficiency and customer satisfaction to the next level?

CTBC Bank invests aggressively in digital transformation with the goal of becoming the best digital bank for its customers. Our ‘banking my way’ approach lets customers decide when, where, and how to deal with the bank. This has raised customer satisfaction and operational efficiency to new levels, with CTBC Bank being awarded Best Digital Bank in Taiwan, Best Retail Bank in Taiwan, and Best Retail Bank in Asia Pacific by The Asian Banker for 2019.

CTBC's mobile banking application provides six quick verification methods for customer login, including fingerprint recognition, face recognition, finger-vein recognition, QR codes and graphics. Customers no longer need to worry about forgetting their password, resulting in a customer satisfaction rate as high as 94%.

We have recruited data experts from retail, technology and academia and established a strong team of 300 data scientists to build powerful data and AI capabilities. Through a combination of data with AI technology, CTBC customers can apply for loans online through CTBC's smart loan platform. The credit review can be completed in one minute and the loan can be disbursed to the customer's account within three minutes. In addition, we use AI technology to improve process efficiency. Artificial intelligence can help us screen suspects of money laundering and reduce anti-money laundering operating costs by 48%.

We have put a lot of efforts into streamlining the end-to-end process and automating it with RPA robots to provide a great customer experience. For example, the time it takes for customers to wait for account adjustments for disputed credit card transactions is greatly reduced, and 100% adjustments can be made in one day.

Digitalization is a road of continuing improvement and CTBC will continue to adopt new technologies and to put customers at the center of innovation, in order to provide them with the best banking experience.

As part of LINE Financial Taiwan, what are your views regarding this internet-only banking project and how do you envision the future?

For us, investing in LINE Financial Taiwan is one of our investments, Regulators expect that the three internet-only banks drive market innovation and development, as well as exert a ‘catfish’ effect through new business models and technologies, and enhance financial inclusion. Facing challenges from ambitious new entrants, incumbent banks must accelerate digital transformation to provide the excellent customer experience that will allow them to win the game.

As the leader in Taiwan's banking market, CTBC Bank places customer needs at the heart of its business, continuing to adopt new technologies and foster digital thinking among its employees. With a solid customer base and strong banking expertise, we are confident that we can deliver a superior customer experience and strengthen our leadership position.

You are now part of the Efma-Accenture Jury Committee of banking experts participating in the Awards voting. What expertise will you bring to this process?

The categories we have selected are Digital Marketing & Communication; Offering Innovation; and Phygital Distribution and Expertise.

CTBC leads in the development of payment, wealth management, consumer lending and other fields in the Taiwan market, and actively invests in digital transformation, including digital marketing, product innovation, data analysis and omnichannel integration. We have accumulated a lot of experience and expertise in these areas and can contribute our own experience while learning from other banks' innovations.

What do you think the future of payments holds? Are virtual payments the way forward?

In the digital age, electronic payment is getting more and more important. It is an indispensable basic financial product in consumer life. Payment solutions have to be embedded in the lives of consumers to satisfy payment needs, anytime and anywhere. We think the future payment landscape should include four key features:

Generality: The payment should be able to link to any kind of funding sources including cards, accounts, and digital wallets, and provide any kind of payment methods, such as NFC, QR Code, in-app, etc.

Immediacy: Payment solutions should be immediately accessible, anytime and anywhere users need them.

Invisibility: Along with fast-growing platforms and subscription economics, the payment experience should be invisible, silent and automatic.

Intermediary: Banks should use API technology to link payment functions to external partners and embed them in the customer's daily life; payment functions help banks build ecosystems and capture customer behavior data.

This interview is included in APAC Review 2019: Banks of the future