Proceedings report from The Asian Banker’s Philippine Heads of Retail Banking Dialogue 2013, on the areas of competition within retail banks today.
The Asian Banker recently held a high-level dialogue with senior executives in the Philippines’ retail banking community on their responses to key developments and challenges faced.
Key discussion points
1. Customer banking relationships in the Philippines
a) For Philippine banks, the point of entry in a new customer relationship is a payroll account. Each company’s payroll is tied to a specific bank, and every time a person changes jobs, the payroll bank account changes. As a consequence, if a person has changed jobs multiple times, that individual will have multiple bank accounts.
2. State of Philippine banks’ wealth management businesses
a) While the wealth management/ private banking business is highly competitive in the Philippines, not all banks participate in this business. Foreign banks such as Citibank, HSBC, Deutsche Bank are main players while only the bigger local banks can compete.
b. Banks do not see profitability in this business unless the ticket size is $115,420 (Peso 5 million), when the customer is moved into private banking.
3. Challenge of staff attrition
a) In a country where the median age is 25 years old, retaining staff can be a huge challenge.
b) Bank of the Philippine Islands believes in selling its vision to its employees, whilst offering them growth opportunities within the bank.
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