| |
| |
 |
| |
|
| |
|
| |
|
SINGAPORE: Financial institutions around the world will have to adapt to post-crisis realities, which include customers who want to know exactly what they are investing in.
Retail customers are an important source of revenue for banks. As their needs change, banks have to keep pace by improving their products and services.
Roger Tan, vice president, SIAS Research, said: "In the past, banks focus a lot on their profit and try to come out with a product that no one else has to attract as many customers as possible. On the needs of the customer, they let the frontline decide on that."
But customers today are demanding more transparency on their investments. Analysts said this is something Singapore banks should not have a problem with.
Leon Perera, group managing director, Spire Research and Consultancy, said: "The biggest challenge will be to meet the increased expectations on the part of the consumers – both retail and commercial consumers - for transparency and disclosure in financial dealings.
"On one hand, there will be more regulatory efforts to increase transparency and disclosure standards, and banks need to respond to that... I think just from competition among banks, there will be a huge pressure for banks to increase performance in this regard."
Tan said: "The new mindset should be on what customers need... and how we can do our best to have products that fit customers' needs. That's long term."
Daryl Liew, chief investment strategist, Providend, said: "I think this is a global phenomenon, definitely a trend. HSBC has already started to do that in Hong Kong a couple of weeks ago. They've segregated three of their branches at retail banking side, versus investment solutions or products side.
"I'm not sure if Singapore is doing that as well, but that's the best practice to adopt. If you are a retail customer walking into a bank, you won't get cross-sold something you never intended on getting by the bank teller. That will help the consumer, it makes it much clearer."
To do this, analysts said banks should focus on segmenting their customers better. That way, sophisticated products can be matched to the right investor.
Industry players added that banks are likely to tweak the remuneration system for their frontline staff.
"I've already heard news that the compensation structures are getting changed in some financial institutions, meaning to say they are moving away from commission structure to more basic-plus-bonus kind of structure," said Liew.
So while banks cannot stop paying commission to their sales people, they can balance it out by including other performance indicators.
Banks can also work on developing its talent pool. For example, the government currently has the Financial Sector Development Fund, which co-pays up to 90 per cent of training initiatives.
- CNA/so
|
