the perceptions of bankers and corporate customers when considering loan selection factors between...
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The perceptions of Bankers and Corporate Customers when Considering Loan Selection Factors between Banks
in Thailand
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Scope of the Presentation
Introduction
Need for this paper
Objectives
Research question
Research methodology
Data analysis
Finding results
Implications
Conclusion
Limitation
Further research
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IntroductionThe bank selection become important issue:-High competition in banking industry
-Few survival of good customers
-Multiple banking behavior
“Bankers should understand clearly the behavior of corporate customers for selecting bank borrowing (loan) in case of receiving similar offers from many banks”
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Need for this research
-Mainly conduct in USA ,Europe( few in Asia)
-Inconsistency result
-Few research on banker’s perspective
-No research to do across two industries
-No research to compare perspective of
bankers and corporate customers in Thailand
-Fill the gap: research corporate customers and
bankers’ perspective across two industries
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ObjectiveTo find out what factors are important for corporate customers from both manufacturing and service industries on bank selection decision for loan.
To design an appropriate marketing strategy to attract target customers
To develop bank selection model
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Main Research Question
“Are customers’ perspectives the same as bankers’ perspectives in terms of bank selection in Thailand?”
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Research Methodology
Method In- depth interview (Personal)
Sample
Fifteen bankers
Minimum 5 yrs direct contact to customers
(Private bank 5,Stated bank 5,Hybrid bank 5)
Sixteen corporate customers
Minimum 5 yrs direct contact to bankers
(Manufacturing 8, Service 8)
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Research MethodologyInterview process
Pilot interview Prefer individual interview
First interview Identify factors / sub factors
Second interview
-Develop sheet listing all factors /sub-factors
-To make priority ranking all 14 factors
From rank 1 most important to
14 least important
-Choose top three sub-factors, make priority ranking
From rank 1 most important to
rank 3 least important
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Finding Results First interview (14 factors)
1 Attractive offering 9 Personal relationship*
2 Good relationship 10 Bank’s ownership*
3 Service quality 11 High Technology*
4 Speed of approval 12 Package*
5 Lending policy 13 Recommendations*
6 Quality of RM 14 Bank merger*
7 Branch facilities
8 Bank image
* New factors received from the interview
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Finding Results First interview (Sub- factors)
Attractive offering Service quality-Interest rate/fee -Efficient and accurate
-Amount of facility -Personalized & flexible services
-Payment peroid -Find new way to solve problems
-Un-complex covenants -Value added services
-Collateral -Full banking services
Good relationship Quality of RM -Easy access/close contact -Know customers’ business
-Help in emergency -Professional advice
-Relationship to management -Confidentiality
-Contact frequency -Effective communication
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Data Analysis
Each factors receive different ranking by the frequency of the number of respondents selected
Each rank is given a weighted score by the first rank is given the highest score at fourteen as the most important an continuously decreases one score as the least important.
The weighted score for each factor is derived by multiplying the frequency of respondents and weighted score of each rank.
Each score will be summed resulting in total weighted score represent for each factors
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Data AnalysisRank 1 2 3 5 6 7 8 9 10 11 12 13 14
Attractive offering
Weighted score 14 13 12 11 10 9 8 7 6 5 4 3 2 1
Frequency 11 3 2 - - - - - - - - - - -
154 39 24
Total weighted score 217
Good relationship
Weighted score 14 13 12 11 10 9 8 7 6 5 4 3 2 1
Frequency 3 3 - 5 1 1 - 2 1 - - - - -
42 39 - 55 10 9 - 14 6
Total weighted score 175
Remark: Represent two important factors as example
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Findings ResultsImportant Factors (IF)
Rank Bankers Corporate Customers
1 Attractive offering Attractive offering
2 Speed of approval Good relationship
3 Service quality Speed of approval
4 Branch facilities Service quality
5 Quality of RM Lending policy
6 Bank image Quality of RM
7 Good relationship Branch facilities
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Finding Results Less Important Factors (LIF)
Rank Bankers Corporate Customers
8 Lending policy Bank Image
9 Personal relationship Personal relationship
10 High technology Bank’s ownership*
11 Recommendations High technology*
12 Bank’s ownership Package*
13 Package Recommendations*
14 Bank merger Bank merger*
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ImplicationsGroup1: Immediately to develop
Speed - Shorten credit process-Set standard timeframe to measure performance
-Decrease levels of authorization
-Revise credit proposal form
Service quality -Continuous training
-Efficient bank process - update technology
-Flexibility
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ImplicationsGroup1: Immediately to develope
Quality of RM- Continuous training to impress customers
- Understand necessities of business
- Promptly response / quick decision
- Good judgement to solve problem
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ImplicationsGroup 2: Need time to developAttractive offering: profit from whole package
Lending policy: increase credit facilities
before requesting
Branch facilities: increase outlet
Good relationship: growth by contact /advice/
help
Bank image: differentiate by building
brand awareness
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ConclusionThere are differences when compare between bankers and corporate customers’ perspective.
- Although there are the same six out seven factors from IF
and LTF group, the ranking is difference.
- Attractive offering is considered the most important factor
for both side.- Good relationship is considered important by corporate
customers(rank 2) while perceived less important by
bankers’ perspective (rank 7).- Other important factors for both side are speed,service
quality and quality of RM.
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Conclusion- Two most important factors are attractive offering
and good relationship
- Bank can set appropriate marketing strategy
New customers
Transaction-oriented strategy (pricing)
Existing customers
Mixed strategy (transaction+relationship)
-Better respond to customers’ needs
-Increase satisfaction and loyalty
-Become main bank
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Limitation
Limit sample size – the result not generalized
Exclude other influential factors:
-economic situation,
-legal enforcement,
-political risk,
-organization culture etc
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Further ResearchInfluence of emotional factors (cultural,
social etc.)on bank selection in Thailand
The effect of other influential factors (economic situation, legal enforcement etc) on bank selection
The degree how corporate customers satisfy with the important factors
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