Banking and Finance

Thai banks geared up for retail explosion

06 November 2000

Editor: In 2004, Edwin Sim established Human Capital Alliance, Thailand’s  Premier Executive Search & Senior Corporate Advisory Firm. Between 1997-2003, Edwin Sim was Managing Partner of Korn Ferry Thailand.  This article was first published in November 2000.

During the past several years, the Thai commercial banking industry has undergone massive changes. The economic crisis brought on a major shift in the way banks loaned money to customers.

Gone are the days when friendly Thai bankers loaned money to customers after looking at their faces and then collateralizing assets. Everyone knows that cash flow lending is now the name of the game.

More importantly, most Thai banks have suddenly shifted their focus to retail consumer banking. They have identified the retail consumer sector as growth and profit drivers in the new millennium.

Leading the way are so-called hybrid banks such as DBS Thai Danu Bank, Standard Chartered Nakornthorn and the Bank of Asia. These hybrid banks all obtained foreign majority shareholders during the crisis. Wholly owned Thai banks have also placed a more increasing emphasis on retail consumer banking.

To ensure that these engines of growth reach their full potential, most Thai banks have for the first time gone outside of their industry to find marketing professionals to lead their new retailing efforts. The key today for Thai commercial banks is finding managers who can successfully adapt consumer-marketing techniques to the banking industry.

These marketing professionals are helping Thai banks design and market new products to the mass market. In addition, the financial institutions are also recruiting consumer sales people to sell the myriad of new financial products to different mass-market segments.

The banks realize that professionals who understand consumer products and consumer behavior and know how to segment markets can add much value to their operations. Several marketing professionals with almost two decades of multinational consumer product experience are now heading the marketing operations of Thai banks. Current trends point to even more movement in the near future. Every bank is looking for that special person who can drive their consumer banking divisions.

Although consumer-marketing people seem to be ideally suited to sell bank financial products, not all of them have been successful. Some of the professional consumer marketing professionals have failed because they could not grasp the financial risks in designing and selling consumer-banking products to consumers. They failed to understand that a financial product’s life cycle only begins with the initial sale. Banks still have to collect the money loaned out before the transaction can be ruled a success.

Nevertheless, the majority of Thai marketing professionals brought in to drive consumer-banking operations have been very successful. Thai consumers can look forward to new and more innovative consumer banking products.

These new marketing professionals will pro-actively segment markets and push products to consumers. Traditionally, Thai banks waited for customers to come to the branches for services. Thai banking consumers will experience a sea change in terms of service.

Edwin Sim is the country manager of Korn Ferry Thailand.

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