James Cullen, senior vice president of international financial services at Wells Fargo Bank, Mike Pratt, group executive of consumer financial services at Westpac and many more retail heads share insights on the key issues in retail banking
Over 50 heads of retail from various banks around the Asia Pacific, the Middle East and China gathered in Beijing on June 8th for The Asian Banker’s third heads of retail annual meeting. Held in conjunction with the Excellence in Retail Financial Services (ERFS) Awards 2007, the meeting included representatives from the programme’s international panel of judges, as well as James Cullen, senior vice president of international financial services at Wells Fargo Bank, which had been voted Most Admired Bank outside the Asia Pacific and Gulf Region by regional bankers.
Chairing the session was Phillip Strause, acting chairman of the EFRS programme and former director of the Asia Pacific/Africa financial institutions practice at Deloitte, who noted that the spirit of the programme, and the meeting itself, was not about winning awards for its own sake but about building higher standards for the industry.
The opening presentation was by Mike Pratt, group executive of consumer financial services at Westpac, which has just been named best retail bank in the Asia Pacific and Australia. He noted the absolute importance of building sustainable businesses, but tied it in with the ethical message that has been a strong component of Westpac’s culture for many years. Noting the importance of “doing the right thing,” he outlined the concept of “running many community initiatives that benefit both he community and Westpac alike” as the ultimate benchmark of true sustainability. As the first bank in Australia to sign on to the Equator Principle, Pratt emphasised the bank’s belief in strictly following global benchmarks in order to achieve the type of excellence that convince customers to bank with it over others.
In the ensuing discussion on ethical banking, ERFS judge Chris Skinner noted that European banks committed to ethical banking have seen five times as much new business come from admirers of their goals as the deals they turn away for ethical reasons. Pratt, whose recent “green mortgage” product is partly responsible for the bank moving up to take second place in home loans in Australia last year, explained that consistency is key if a bank wants ethical banking to work, noting that “you can’t continue in sustainability if you compromise on principle.”
The discussion was followed by a presentation from Christian Kapfer, programme manager of the ERFS programme, who discussed the findings of the six-month research project into retail banking. Noting that customer centricity was a focus of the bank submissions, he asserted that customer centricity was defined differently by every bank, while also acknowledging the weakness of banks in understanding how to run their call centres efficiently, an increasingly important – but poorly managed – channel for all banks. Pralay Mondal, country head, retail assets and credit cards for HDFC Bank, told the group that the rapid acquisition of customers means that they will become alienated from the culture of the bank, unless systems are designed for this sort of scalability. While customers prefer simplicity, the difference between mission statements posted by banks and the follow through is often significant. Wells Fargo’s Cullen shared his bank’s experience about how it had retreated from a cost-cutting culture to a focus on customer engagement and a cross-sell strategy.
Kapfer also revealed that in retail banking there is no correlation between size and profitability, before concluding that banks around the region need distinctive retail strategies, must be consistent, but have so far been inconsistent in their promises and delivery.
One presentation by a banker showed some promise for customer centricity. Pishu Ganglani, senior manager for business re-engineering at Emirates Bank of Dubai, demonstrated the bank’s sales monitoring programme. While retail banking is new to the Middle East, with only a five-year history, the bank has been able to leapfrog with technology and is ready to take risks with radical ideas. As a result, it has shifted from annual bonuses to monthly ones that are based on key performance indicators (KPIs) that are updated daily and paid to branches, not to individuals. Noting that events like ATM failures are often seen as “not my problem” by branch staff, who defer to IT specialists, the view of the customer is still to blame the branch and its staff and a change of culture is needed before branch staff can incorporate a holistic view of branch service. “It’s not about IT,” he says, “It’s about the system.”
The sessions ended with a closing address from Philippe Paillart, the former chairman and chief executive of Singapore’s DBS, back by popular demand after speaking at two previous heads of retail annual meetings. Paillart supplemented Kapfer’s findings of the EFRS programme by pinpointing trends of his own, top of which is speed. With his roots in the automotive industry, Paillart pointed out that any other industry offers much greater speed simply as part of its regular competitive business environment, a theme which had been visited already in another session by Dennis Khoo, general manager of wealth management at Standard Chartered Bank in Singapore, who had compared financial services’ speed and ability to innovate unfavourably to the IT industry in the Future of Banking in China Conference.
Highlighting again the difficulty banks have in defining customer centricity, Paillart also talked about inefficiency, particularly with banks investing in IT and then not using it, or the struggle to manage distribution mixes. On a more positive note, however, he noted that more and more local banks are becoming regional players, saying that “the action is now with local banks as a result of the school of Citi” and other global banks, as well as regional conferences such as those organised by The Asian Banker before finally reverting to the Meeting’s opening message of corporate responsibility, ethical banking, and green products.
Look out for more extensive coverage of the Heads Of Retail Annual Meeting in the proceedings report and upcoming issues of The Asian Banker Journal.
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