Monday, December 17, 2018

An outlandish banking merger idea - a comment

Risen Jayaseelan's piece in The Star today raised my ire. Maybe it's because I haven't had breakfast yet. Maybe it's because I have been nursing an obstinate viral thing that seems to have inhabited my stomach for some days now. 

The piece is an attempt to float the idea of a super merger of the already large banks in Malaysia, principally Maybank, CIMB, RHB, Ambank and Affin Bank so that some superlative achievement is attained by a banking institution originating from Malaysia. It's like an infantile need to show strength.

If I, as a bank customer in Malaysia, have had a wonderful experience with banks in the past 2 decades, I would not have any opinion on Jayaseelan's super merger  proposition.

I really do wonder if the journalist has been living in a cloistered, cocooned, cloud cuckoo land in not having had any real and meaningful transactions with any of the banks in Malaysia over the past 2 decades.

Video may have killed the radio star in the 1980s. In Malaysia, rampant bank mergers induced by a very unwise central bank policy of favouring size over quality for purportedly competitive reasons, killed the friendly neighbourhood bank.

And in the new millenia, the dreaded techfin bullshit is killing the banking experience even further.

If you care to take a helicopter up above the arboreal tree line of the phallic thrusts of buildings housing the head offices of Malaysian banks you may acquire some perspective of what the true purpose of banking and finance should be.

And, what do I mean by the cryptic sentence?

Example 1 - if you walked into a housing developer's showroom and commit to buying a property you are ushered to meet with a conveniently placed bank officer who will immediately print out your EPF record and make an initial determination of your creditworthiness. The transactional experience leading to the obtaining of a bank loan to buy the property is an orgasmic joy of ease of use (except for the bit where you have to wait in a dank and claustrophobic signing room at the solicitor's office).

But, the Heavens help you if you subsequently stumble and need to consult the bank on any aspect of your loan. You bought a property in Bukit Raja Klang. You find that the branch that handles your loan is in the nether regions of Serdang. You call and call and get voice recordings instructing you to press different parts of your navel.

If you are slightly smarter, you send an email or, better still, live chat. And, presto, you get an intelligent officer who is utterly responsive. But, alas, being Malaysian and, Malaysian educated, your mouth moves better than your fingers and start to rue the days when your mind meandered away as the English and Bahasa Malaysia lessons were on. You find that your ability to articulate is not good. You find that you need to use key words that are not in your lexicon. You try, without being aware, using similes, synonyms, metaphors and even parables. 

Not a good experience.

Example 2 - You mind your own business as a good taxpaying, salaryman. You have put in your hard earned savings in the bank. You carefully watch out for good term deposit deals, watching out for the smallest 9-month FD offers. 3.3% per annum, 4.2% per annum. Happy days.

Then, out of the blue you receive a printed letter by post. The letter says that the bank will be closing your savings, current and FD accounts within the next 30 days. Please advice on where you want your money to be transferred.

You go to your bank branch and show them to letter to ask what the meaning and intent was to close all your accounts. The clerk shrugs her shoulder and passes you to the officer. The officer shrugs his shoulder and passes you to the branch manager. The branch manager shrugs her shoulders and tells you that it is a head office decision. You try contacting the head office but get the usual heave ho.

Then, you contact the central bank. You get instructed to email them. You email them and receive a prompt response that copies in the bank. You are elated. Hopeful. The bank responds via email saying they are not at liberty to disclose. You press them. They deflect. The central bank is copied in at all times. You appeal to the central bank. The central bank emails the bank. The bank responds via email saying they are not at liberty to disclose. You press them. They deflect. The central bank is copied in at all times. No, the repeat passages are not typos. They are a chronological and categorical log of what happened to someone close to me.

In the end, the customer trudges back to the local bank branch and asks for a cheque to close all accounts as requested by the bank. Takes the cheque and deposits it in another bank. Makes you pine for the days when your ancestors kept money under the mattress.

And, here is the postscript. A month later, a letter arrives from the local bank branch inviting you to deposit money under a wonderful 9-month FD scheme!

I could go on and on.

My message to the central bank, the Malaysian banks and journalists who support super bank mergers is to please have a new perspective and look at things from the standpoint of the average bank customer and, the average SME borrower.

It is terribly ironic to read all the inane and insincere comments about how the largest employers in Malaysia are SMEs and, the system must and, will do all it can to nurture SMEs. SMEs are the backbone of the Malaysian economy.... la di da.

Well, I live in the real world. I actually have SME clientele. I know their plight and frustrations. And, unlike super dicky techfin sandboxed Malaysian banks, I actually do find financing solutions for SMEs with a deeply personal service that is professional and proper; just like how I imagine the old neighbourhood bank branch manager used to be.

Actually, while we are at it I would like to say that the central bank should start giving out more licences to create smaller banks that cater to the real needs of the average Malaysian.

1 comment:

walla said...

Big-Banging The Big Banks

One of Malaysia's big problems is that its leaders have dull wits. Once something appears to work, they don't pay any attention to sustaining success by constant monitoring of what has changed which requires tweaking, re-engineering and restructuring. Swimming in some past success, they become lazy and start to exercise malignant neglect by keeping status quo.

When local banks were persuaded to merge, it was as a a local solution to counteract the muscles of big foreign banks given license. In the process of doing so, the local banks started to assume the metallic efficiency of foreign banks but at the sacrifice of customary person-to-person practices which take fuller cognizance of local needs and conditions inasmuch individual limitations towards optimal decision-making.

The impersonal efficiency inside the bank ends up not translating into new personal efficiency by the very customers upon whom the bank depends but on whom the bank sends on a merry-go-round maze when the customer wants fast and accurate answers to make informed decisions or overcome the time-dependent hurdle of bureaucratic bottlenecks not of his making.

What was before thinking of the customer first for mutual long-term growth became thinking of the bank itself first on the primacy of short-term stock-price performance based on cost-containment by limiting time-and-effort interactions with customers.

Yet banks continue to issue glossy marketing brochures whose only objective is to get customers to sign up at the door in order to enjoy death by a thousand cuts once in the room.

Today this lacuna has widened at precisely the time when depressed international trade, weakening local currency, and increasing costs of production are posing life-threatening challenges to our SMEs.

Dare one hope the banking associations and oversight bodies in the industry will take initiative to remediate the situation? Unlikely - since it is all a syndicate.

But if small customers don't get all necessary help to grow, how can they get to be big enough to meet the new criteria of banking privileges customized only for the big customers that banks nowadays only like to do business with? It's not like the small customers are asking a lot - just try to see things from their points of view for once, and do the right things for them.