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Last Updated: Jun 25th, 2007 - 17:07:26 |
THE bancassurance business of Malayan Banking Bhd (Maybank) is set to grow this year, even as the banking group prepares itself for stiffer competition from other banks next year.
By the end of 2006, the bank's bancassurance business is expected to increase by 20%, senior executive vice-president and head of consumer banking Spencer Lee said in an interview.
The bank is a pioneer in bancassurance. “We were the first to offer it, in March 1996, and are celebrating 10 years of having it as part of our products and services package,” he said.
Today, the bank itself offers over 60 insurance products, the majority of which are general and life insurance as well as investment products. Takaful or Islamic insurance is also offered and is expected to grow in the future.
Maybank markets its insurance, investment and financial planning products and services through a diversified system of delivery that includes credit cards and automated teller machines.
Part of this pioneering philosophy was developed through the banking group's joint ventures with insurance players like Fortis.
“Through that, we learned about the evolution of bancassurance in Europe and we saw how products were developed and marketed.
“We took the lead and were the first to offer online investments via MayBank2U.com (its popular Internet banking service) and ATMs, and last year, we introduced third party insurance,” Lee said.
Maybank ranks as the country's top overall insurer, and for takaful products, number two in general insurance and third in life insurance.
Spencer Lee
There's room for the bancassurance business to grow further. Only 38% of Malaysians have insurance.
Maybank also plans to develop bancassurance and take it to the next step – offering full-fledged financial planning services as well. “This is just part of our holistic approach to the business, and ensuring that it is customer-centric, so we want to offer everything under one roof,” Lee said.
To take that next step, the bank has adopted a three-prong strategy: to upgrade its infrastructure, to focus on technology and to develop the skills of its human capital.
“While we can put in better technology and processes, taking the next step cannot happen without a staff member who is trained and sales-oriented.
“Part of this involves turning staff into financial planners and changing their mindset to be part of a team that offers advisory services,” Lee said.
When this happens, the bank will be ready to mine its vast customer base and begin designing its products.
Lee said the bank recognised the need to understand not just special customers but the entire market. It is also due to this that the bank now offers a wide range of insurance-related products that cater to the needs of the population in the urban, semi-urban and non-urban areas.
He has set his sights on penetrating the urban market better, which is evidenced by Maybank's multiple channels of delivery. The bank will thus be able to sell its products at the most basic level – over the counter – or to sell to the most tech-savvy consumer via the mobile phones.
“Urban consumers prefer the more exotic investment plans. They know a little more about investments and prefer something more than just basic plans with capital guarantees.
“The informed investor is more demanding. So for us, this is the next channel of business to build,” Lee said.
For next year, Lee believes that the bancassurance business will continue to develop and grow, though competition will be tough.
Ultimately, though, it is its customers that will reap the benefits as more and more value-added features are incorporated in new products.
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