By Phillip Mann, International Banker
Today, banks all over the world are waking up to the potentially substantial gains that can be made by improving their digital offerings. Few, however, are transforming their digital capabilities as comprehensively as Hong Leong Bank.
An established and well-respected local financial institution in Malaysia, Hong Leong Bank Berhad (HLB) has a long and illustrious history. It was originally incorporated as Kwong Lee Mortgage and Remittance Company in Kuching, in the Malaysian state of Sarawak, in 1905; and after several acquisitions, mergers and renamings over the years, the bank took on its current form after its eventual acquirement by the Hong Leong Group.
Listed on Bursa Malaysia Berhad, HLB is among the leading financial-services institutions in Malaysia today. The bank has among the most extensive branch networks in the country with around 285 branches set up within Malaysian borders alone; then another branch in each of Singapore and Hong Kong, four branches in Vietnam, five branches in Cambodia, and a representative office in Nanjing, China, as well as more than 1,400 self-service terminals and a full-service call centre. Wealth-management services are offered through branches in Malaysia, Singapore and Hong Kong, in addition to 16 priority banking centres located throughout Malaysia.
HLB is known in Malaysia for its strong entrepreneurial spirit, which has seen the bank introduce numerous innovations to the market. Today, that sense of creativity is being channelled into effecting a massive bank-wide digital transformation. The bank has become acutely aware of the need to advance its efforts on the digital-banking front, and has optimised and integrated a range of electronic and digital facilities and processes in order to meet this objective. A comprehensive range of complementary and electronic channels have been established—for instance, self-service terminals, the Hong Leong Call Centre, Hong Leong Online Banking and Hong Leong Mobile Banking.
The bank prides itself on its versatility—being a big enough financial institution to be a significant presence in the banking scene, whilst also being small and flexible enough to make snap business decisions unburdened by bureaucracy, which allows it to have a clear, organised path of objectives to follow that in turn can drive the bank onward to becoming a highly digital, innovative ASEAN (Association of Southeast Asian Nations) financial-services company.
The bank’s progress on the digital front is a testament to that mission. To date, the bank has introduced many firsts within the banking industry in Malaysia. At the branch level, a mobile-servicing solution was implemented in 2017 to improve efficiency in servicing customers. As opposed to the traditional way of servicing customers, branch staff can now approach customers anywhere within the branch using a tablet. This cuts down on queues and wait-times, and enables the bank to deliver a more personalised service.
Outside of the bank’s owned physical premises and digital properties, Hong Leong Bank also introduced a first-of-its-kind offsite loan-application platform, Loan2Go, in 2016. This platform enables customers to conveniently apply for auto loans via mobile apps while at car-dealer showrooms.
The bank is continuously enhancing its digital channels to enable customers to self-serve, leaving the branch to handle high-value or more complex transactions. A revamp was carried out on its corporate website to enhance and offer a personalised experience to customers and potential customers. Online applications for products were made possible within the corporate website and online-banking website. The deployment of artificial intelligence (AI) chat on its corporate website and online-banking website is another first in Malaysia for the bank. This AI chat service assists customers with queries on products such as credit-card benefits, eligibility requirements and online applications. Should customers require more complex or nuanced assistance, they are transferred seamlessly to a live webchat agent, or an agent will call them back immediately or at a scheduled time.
Within its digital-banking platforms (Connect online and mobile banking), the bank has also been aggressively pushing innovation boundaries by introducing a few firsts since 2014. It was the first to: enable mobile payments to physical and online retail merchants through a (QR code) scan-and-pay method; allow transactions via biometrics; and enable placement of online fixed deposits through transfer of funds from another bank via FPX (Financial Process Exchange). This innovation has been recognised with an award from a local payment-enabler organisation. In 2016 the bank partnered with multi-campus, international university UCSI to launch the Cashless Campus initiative, which leverages on the mobile-payment features that are available on its award-winning Connect mobile-banking app to offer a fully cashless ecosystem within the UCSI campus. This went on to become the first of its kind in Malaysia and won the bank an IDC Innovation Award in 2017.
More recently, the bank rolled out online application capabilities for personal loans, credit cards and CASA (current account and savings account) openings, thus saving the customer from having to make a trip to a branch. It also launched its inaugural Digital Day on July 7, kicking off a week-long campaign of education and promotion, as well as raising awareness of the new Hong Leong mind-set of being “digital at the core”. According to HLB’s group managing director, Domenic Fuda, “We are strengthening our capacity on digital services so that we are able to provide our customers with a great digital experience. The Digital Day is a platform for us to showcase our unique customer-centric innovations, and it is a day which we want our customers to associate with HLB”.
Ultimately, it is the enhancement of the customer experience that appears to be the highest strategic priority for HLB at present, which is being carried out through its ongoing digitisation. The bank puts the customer at the heart of its overall business focus, which allows it to anchor its digital, innovation and strategic-action plans around improving the service it provides to its customers, irrespective of whether it’s acquiring new ones, transacting with existing ones or growing customer engagement.
One of the key recent measures taken by HLB to improve the customer experience has been to implement new web-based applications while upgrading existing ones. Customers now have a much wider range of communication tools at hand to be able to interact with the bank, including Web Chat for live inquiries, secured e-mail, an intelligent and comprehensive FAQ (frequently asked questions) section for self-service, and video chat for branch support. A cross-border cash-withdrawal service has also been implemented, allowing customers to make withdrawals at any HLB branch across the region. This particular measure has not gone unnoticed, with the bank managing to scoop up the Best ATM and Kiosk Project in the Technology Innovation Award category at the Asian Banker Achievement Awards 2016.
Furthermore, a concerted effort to improve turnaround times has seen more than 74 percent of all branch customers being served in under five minutes. Call centres have also seen similarly impressive results, with up to 84 percent of customer calls being answered within 20 seconds. The bank ensures it stays on the ball with regards to customer feedback by actively screening comments on its social-media channels. In turn, this allows fast and appropriate responses to customer concerns in almost real-time. Electronic-channel services are now available to customers 24 hours a day, seven days a week.
HLB recognizes that collaborating with the start-up ecosystem is pivotal in leapfrogging innovation in the industry. In March 2017, it launched HLB LaunchPad, a mentorship and developmental programme targeted at nurturing Malaysian technology and fintech start-ups. Under HLB LaunchPad, five start-ups will be selected to undergo an intensive three-month programme specifically focused on digital innovation within the three pillars aforementioned. Participants will get first-hand experience and exposure to the knowledge, experience and expertise of HLB’s senior-management team—driving the product, business and infrastructure development within the bank—in addition to access to the cutting-edge technologies already adopted. Participants will also be trained by design-thinking experts and get the opportunity to validate their products in the market.
To align customer-service capabilities with employee conduct, moreover, the bank launched a company-wide customer-service strategy called TOUCH. This initiative aims to highlight the appropriate behaviours that the bank expects from all employees, in order to maximise the benefits they provide for the Hong Leong customer base. Indeed, the bank’s entire workforce is now engaged in driving the digitisation efforts and transformation journey. Its motivational mantra, “We are digital at the core. It is that simple!”, underpins those efforts.
Another of HLB’s strategic priorities that deserves mentioning is on agility and big data. As part of its digital strategy, the bank has been focusing on building and improving its scalable processes, whilst concurrently reducing unnecessary paperwork. On the big-data front, meanwhile, the bank is monitoring customer experience with various products and services using sophisticated social-media and analytics capabilities. In turn, the data shapes the bank’s next moves with regards to customer service and generating leads for effective cross-selling and acquisitions. IBM’s BigInsights platform has also been enabled, which comprises a data-mining repository that facilitates the provision of marketing-propensity insights.
With such rapid evolution being achieved by HLB at present, one might wonder whether the traditional bank branch is being neglected or side-lined. This does not appear to be the case. With around 300 branches nationwide, the bank continues to seek new ways to innovate the functions of its branches—while digital channels have been created to make customers more self-sufficient, and branches are now being used to handle high-value transactions and more complex interactions.
Corporate social responsibility (CSR) plays a key role at HLB, allowing the bank to empower local communities, and thus facilitate the delivery of long-term value to society. Some of those efforts are carried out through Hong Leong Foundation (HLF), which is the philanthropic arm of the Hong Leong Group. Overall, HLF’s contributions in 2016 benefitted 86 organisations and brought positive impact directly to 3,430 individuals nationwide. HLF primarily focuses on investing in education and community development. Some of its initiatives include scholarships for undergraduate/diploma and masters studies; the Reach Out and Rise development programme (in which scholars go through a holistic educational course that includes a series of enrichment programmes); and an after-school programme. For community development, HLF makes contributions to help improve the lives of underserved communities, including responding to appeals for aid in emergencies and natural disasters.
The CSR initiatives supported by the bank are also distinctly varied in nature—last July, for example, 20 HLB staff participated in the PERTIWI Soup Kitchen (PSK), in which they helped to distribute at least 500 meals as well as clothing to the homeless and underprivileged in the heart of Kuala Lumpur. Then in September, the group organised a trip to the capital city’s famous aquarium for a Somali Community School and Picha Project for refugees, consisting of families from Iraq, Afghanistan, Myanmar, Syria and Palestine.
The bank is particularly conscious of its impact on the environment and actively seeks to minimise any potential harm it may cause. In addition to reducing water and energy consumption, as well as waste generation and carbon emissions, HLB continues to support a flourishing partnership between HLF and Science of Life Systems 24/7 to form a group-wide technology recycling programme called Transform It. The programme invites employees to donate old electronic devices to be responsibly recycled. The refurbished items are then delivered to underserved communities in Peninsular Malaysia.
Hong Leong Bank is well on its way to becoming a digital banking powerhouse. Technology is being astutely applied across a range of core business functions to deliver superior standards of customer service. Perhaps just as vital as the customers’ digital transformation is the Bank’s recognition that employee interactions with each other and contact with clients should also be digitized to reinforce the digital transformation journey. Indeed, the human component coupled with digital tools compliment the greater role being played by technology to deliver best in class customer service. Hong Leong Bank is providing a shining example of a bank that is “digital at the core”, but that it is also organised to be able to provide that ever-important human touch. As such, it is leading the Malaysian banking industry in achieving supreme customer service in the age of digital finance.