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As Maybank continues to expand in local ASEAN markets, John Chong, group CEO of Community Financial Services, Maybank, discusses the bank’s strategy and the role of innovation in its success. An exclusive interview by Efma's Anne-Laure Jozan.
Maybank CFS has been growing despite challenging market conditions. What lies behind this success?
We have always been very focused on what we want to achieve and I think that is one of our key success factors. The three things we are very focused on right now are ASEAN, customer centricity, and innovation.
ASEAN is a fertile ground for growth and Maybank has a clear advantage in its footprint, having a presence in all 10 ASEAN countries. We are focused on growing in ASEAN and leveraging our strengths to help the community flourish. Being on the ground, we have deep insights into local markets and understand the business landscape as well as our customers’ needs. Leveraging our regional connectivity, we are able to provide our ASEAN business clients (such as SMEs and retail customers) access to local as well as regional privileges and solutions. We offer them a differentiated ASEAN proposition and our clients see us a gateway to ASEAN.
Internally we are able to share expertise and products, to capitalize on the synergy of our regional presence. We have created centers of excellence to replicate successful business models and products/services across the region. One example is our Retail SME segment, which is a model that has worked well for us in Malaysia and that we have subsequently applied across the region, but of course with varied terms according to market dynamics and regulations. Given the rapid development of this region – and the major shift in many countries to focus on driving SMEs to propel economies – we see tremendous opportunities in the SME segment.
Our award-winning M2U online banking platform is available across the region in Malaysia, Singapore, the Philippines, Cambodia, and Indonesia. Our brand new M2U app with refreshed user interface and experience has been extremely well received since its launch in Malaysia in 2017. The app has since been rolled out in the Philippines and Indonesia, and will soon be available in Cambodia and Singapore too.
With all of this expansion and innovation, how do you ensure that the customer always remains the focus of your activities?
Customer centricity is at the core of everything that we do and serves as a guide for all of us. Before we embark on a project and commit time, money and manpower, we will always ask ourselves: how will this improve our customer’s experience and by how much? If it will not bring incremental difference, then there is no point investing in it.
To achieve customer centricity, I believe innovation is key, especially because we are operating in a fast-evolving industry which is increasingly being disrupted. Being innovative means always having to do things better to give our customers the best experience. It does not necessarily always involve technology but most of the time it does.
For example, we looked again at our SME portfolio and segmented our customers, which range from micro entrepreneurs to large SMEs, so that we are able to better credit-assess them. We differentiated the credit-assessment standards for Retail SME, moving away from lengthy credit assessment more relevant to larger commercial businesses and instead adopting a more retail-like approach for the small business owners. This has resulted in significantly shorter turnaround time, which is by far the best in the market, and we have managed to maintain good asset quality. Our existing SME clients are also able to apply for loans online via our Maybank2uBiz and approval can be obtained within 24 hours. The results speak for themselves: our Retail SME business grew 23% CAGR for five years from 2013-2018 and it continued to expand in 1H 2019 with 11.9% Y-o-Y growth.
Maybank Group’s Community Financial Services – the Group’s retail banking franchise, providing end-to-end financial solutions for individual, SME and business banking customers across seven ASEAN countries – posted a 5% YoY growth in Profit Before Tax for 1H 2019 despite a challenging market environment. We also saw commendable growth in our key focus segments; Regional Retail SME loans registered 14.1% Y-o-Y growth whilst Group Wealth Management’s total financial assets expanded by 7.8%.
In Malaysia, loans to consumer and Retail SME segments remained robust, led by Retail SME loans with 11.9% Y-o-Y growth, with mortgages growing by 9.0%, unit trust loans by 6.7%, and automobile financing by 4.5%. Outside of Malaysia, our CFS franchise in the ASEAN region also grew at a respectable rate, especially in Singapore, which recorded a 6.8% rise in net operating income.
How successful has Maybank been in integrating its digital strategy into its retail banking model?
Maybank has always been in the forefront of innovation and technology because we want to give our customers the best experience. We have paved the way for many digital-first initiatives. We were the first bank in Malaysia to roll out the ATM in 1981 and in 2000, we launched Maybank2u, which was the first internet banking facility in the country. In 2010, Maybank2u was also made available on mobile. Innovation has always been in our DNA and we are constantly experimenting with new technologies and implementing them to enhance our customers’ experience.
To date, we have been successful in integrating our digital strategy into our retail banking, resulting in many new innovative products and significantly improved experience for our customers.
In 2017, we launched the new Maybank app with biometrics login, fresh new look, an intuitive way to view accounts and improved user experience. We introduced Maybank QRPay last year, which was again the first and still the only bank in Malaysia to provide that service. For QRpay, our focus is on making it easier for customers to pay for purchases, and for merchants to start accepting mobile/cashless payments, which is a more safe and convenient method. For the merchants, they could easily sign up by going through a simple five-minute onboarding journey on the mobile app.
Earlier this year, we brought MAE, the first and only e-wallet by a bank, to the market. Unlike other e-wallets currently in the market, MAE provides users with access to a wider range of banking services. MAE was designed for both new and existing Maybank customers. The e-wallet resides within the Maybank App and is the easiest way for non-Maybank customers to begin their relationship with us without having to visit one of our branches; they can just download the Maybank App, and sign-up for MAE within five minutes. This is part of our long-term strategy to further solidify Maybank’s leadership in the online banking space, and in-line with our commitment to be the ‘Digital Bank of Choice’ in the region.
The success of our digitization is also reflected in the numbers – last year, more than 66% of all mobile banking transactions in Malaysia were done through our Maybank App, and more than 52% of all internet banking transactions went through Maybank2u. Meanwhile, 86% of all our customers’ transactions were performed via digital. This year, we are seeing continued growth in digital transactions by our customers and it has overtaken web transactions twofold.
Going forward, we will continue to leverage our ASEAN footprint to grow specific business segments such as Retail SME and Wealth Management, while maintaining our leadership in Malaysia. We see a lot of opportunities in this region, given its potential and strong growth propensity. In all these respects, technology and digitization will play very important roles as enablers to drive the business forward.
This interview is included in APAC Review 2019: Banks of the future