Hong Leong Bank Berhad (HLB), headquartered in Kuala Lumpur, Malaysia, may win the prize for being the most digitally minded bank in the world, and that’s saying something. This major Southeast Asian bank has a wide outreach, with presence in five regions outside of Malaysia: Singapore, Hong Kong, Vietnam, Cambodia and China. HLB has a long history, originally incorporated as Kwong Lee Mortgage and Remittance Company in 1905. In January 1994, Hong Leong Group acquired MUI Bank Berhad and renamed it Hong Leong Bank Berhad. That same year, the bank was listed on the Kuala Lumpur Stock Exchange (today known as Bursa Malaysia Berhad). Since then, HLB has mushroomed, becoming Malaysia’s fifth largest, with RM200 billion in assets by mid-2018. The bank boasts a distribution network of approximately 270 branches locally with additional centres in Singapore, Hong Kong, Vietnam and Cambodia; add to that a comprehensive range of electronic channels—such as self-service terminals, a call centre, digital branches, online and mobile banking—and you have the recipe for complete customer satisfaction.
Gentlemen, thank you very much for being with us today….
HLB is committed to being “digital at the core”. What are the biggest challenges to this, and how have you been able to overcome them? Do you think there are still aspects that need to be improved on?
Domenic: For Hong Leong Bank to be a highly digital and innovative ASEAN (Association of Southeast Asian Nations) financial institution, it is absolutely paramount that we approach the digital transformation as a comprehensive, bank-wide strategy and continue to embrace digital and innovation as part of our core culture. We aspire to be adigital-driven organisation—and not just doing digital, but being digital at the core, adopting the approach of reimagining banking by embedding digital considerations in everything that we do throughout the whole bank. We will continue to evolve the way we do business; leverage on emerging technologies and the power of data to deliver increasingly contextual banking products that enhance the customer journey and relationship with us—hence, anchoring future growth in this fast-changing service and financial landscape; staying attuned to customers’ needs and desire for simpler, more efficient and seamless banking experiences.
Charles: Digital transformation and innovation is a journey rather than a destination because technology is constantly changing. What doesn’t change is the goal to deliver exceptional customer service and enhanced customer experience. Regardless of the customer touch-points—whether online, mobile or at the branch—we need to put customers at the forefront of everything we do. The understanding of our customers’ expectations, experiences and aspirations is key, and this has enabled us to focus on development of relevant capabilities to meet their banking needs.
As we improve our digital capabilities, we are aware that branches still play an integral part of the overall customer journey. However, the traditional way of branch banking will no longer work. Customers no longer want to queue. They expect to be served immediately. Neither would they want to be handed off to another person to solve another problem, or to buy another product. For that reason, we are changing the way branch banking is done through the introduction of our digital branch concept, where there are no teller counters or banking backrooms to clear transactions. All transactions are now done with a service ambassador armed with a mobile tablet who will greet customers once they step into the branch. The customer centricity can be seen from the way we greet customers to the processes that will follow to fulfill their requirements, significantly improving the time we take to service them as well as the experience that they have whilst at the branch.
As we move forward, we plan to integrate the same offerings online, on mobile and at the branches. While everyday banking can be done online or on mobile 24 hours X 7 days a week, branch banking will focus more on having conversations with the customers about more complex and high-ticket banking products, such as investments or retirement. We currently have two digital branches (one is the flagship branch at Damansara City in Kuala Lumpur, and one just recently opened in Penang), and we have plans to introduce more of this digital branch concept.
The biggest challenge is really the customers’ expectations, which change and grow every time they are exposed to the different experiences offered by other service providers. Our competitors are no longer limited to the other financial institutions. We need to really understand our customers and get them involved in our digital-transformation journey. Our internal mantra is to “start with people, end with people”—our digital solutions start with the understanding of our consumer journey and end with testing the solutions with real customers. We are committed to this and have built CX Lab, or Customer Experience Lab, on premise, which is an innovation lab and digital accelerator to facilitate experiments and prototyping of innovation and new technologies that will enable us to engage our customers throughout the process.
Hong Leong Bank Corporate Headquarters in Kuala Lumpur, Malaysia
HLB has stated, “To deliver our commitment, we need the best people to drive innovation, creativity, and productivity persistently to serve the community better.” How has diversity helped drive this thrust forward, would you say?
Domenic: Diversity comes in different ways within Hong Leong Bank—younger and older employees, different cultural backgrounds, gender diversity, varying formal-education backgrounds, different working experiences, etc. As an example, we have been increasingly augmenting our traditional human-resources capabilities with people who can code, drive customer journeys and understand human-centred design concepts and who can apply them in a banking/financial-services context. We have been hiring people with UX/UI (user experience/user interface) experience and people who can build data models to make sense of the large volume of data that we have and continue to generate. It is this diversity that will ignite creativity, innovation and productivity from within the organisation, through embracing a single culture of digital and innovation. Innovation is encouraged throughout the organisation, whether it be around a new product or service, entering a new market segment, a new way of on-boarding clients, new ways of analysing creditworthiness, or simply streamlining operations by making them more automated and customer focused.
Departments as diverse as compliance, risk management and audit, as well as product, sales, marketing, operations units, etc., are encouraged to rethink and apply technology to enhance the way we acquire, engage and deepen customer relationships—as well as how the respective function can help the organisation to manage the various challenges and risks that we face in doing business, including innovative ways to manage emerging risks such as cyber-security, credit underwriting, KYC (know your customer), among others.
Realising that we don’t have to do everything in-house and entirely by ourselves, we also have been collaborating with partners to speed up the transformation process. We launched HLB LaunchPad in 2017, a mentorship programme developed to nurture tech-savvy start-ups in reimagining the financial-services industry. It is Malaysia’s first public-private partnership between HLB, Cradle Fund Sdn Bhd (CFSB), Malaysian Business Angel Network (MBAN) and the ASEAN Angels Alliance. The programme specifically focuses on transforming the bank in three areas: Simplifying Banking Today; Digitising Customer Journeys and Experience; and Re-Imagining Banking for Tomorrow. It aims to work with start-ups who are able to solve banking challenges or provide “out of the box” solutions that can change the way banking is performed. Through cultivating the best minds and collaborating with like-minded partners, we are able to transform our organisation faster—from the way we work, the way we empower our communities and business partners, and, most importantly, the way we serve and engage with our customers.
You also recently unveiled HLB’s second annual Digital Day. This included the HLB Digital Day Augmented Reality (AR) Challenge. How has this helped customers learn more about your digital services and upcoming products? Would you say that this is a huge improvement compared to traditional methods?
Charles: With close to 90 percent of Malaysians frequenting social-media sites, it is clear that we need to engage new and existing customers where they are active online to create experiences that they will not only love, but remember. We are proud that we were the first local bank to use Facebook’s augmented reality (AR) experience to educate customers and non-customers alike on our digital sevices and upcoming products and services through an interactive engagement that’s current and relevant.
We also wanted to reach out to a younger audience, and most of them spend time on Facebook. In order to break the clutter and to catch their imaginations, we decided to tell our innovation story through an equally innovative medium, via Facebook’s AR filters.
It is a fun way to engage with customers, create awareness of our digital solutions and pique their interest on what’s coming their way. What’s different this year is, we created an opportunity for customers to generate content using this AR filter and share it with friends and family via their social networks. This helped spread awareness of our digital products to a much larger audience.
We believe going down this route was effective, considering the level of post engagement we received for all seven filters.
I am certain that your dedication to being digital inside and out will be rewarded time and again through customer engagement. Thank you very much for your time today, gentlemen.