Siam Commercial Bank (SCB) has unveiled its “Digital Bank with Human Touch” vision, highlighting the Bank’s North Star strategy in setting the direction of the organization towards becoming “the number one in digital bank in wealth management, offering seamless experiences across all channels to customers.”
Continually striving to be a better bank to extend the strength of its ability to provide a full range of services, the Bank is actively reorganizing its internal structures to fully adopt digital and technological innovations in order to facilitate the expansion of existing business and the creation of new ventures. To achieve the goal, the Bank is implementing its Digital Wealth model, which targets “emerging wealth” segment or high yield millennials who seek to broaden their investment portfolios with the help of digital technologies. The coming economic recovery is anticipated to stimulate growth among both retail and business customers. SCB aspires to be an industry leader in wealth management by providing consumers with digital banking features that truly fulfil their needs more than ever before, harnessing its technological strengths from data and providing authentic services provided by its talented people.
The Bank maintains its fortitude by rebalancing its portfolios and increasing its high-quality credit profile in order to achieve its long-term growth objectives. In three years from now, SCB expects to have a ROE of over 10%, taking the lead in the wealth wallet share and positioning itself to become the most beloved platform among all client demographics by 2025.
Speaking about its latest strategic thrust, Siam Commercial Bank Chief Executive Officer Kris Chantanotoke revealed that, to this day, SCB has maintained its position as a leading universal bank, dominating in every product category. Among these distinctions are first place in home loans and bancassurance, as well as third place in wholesale banking, SME banking, retail banking, wealth management, and being one of the three banks with the most users of its financial application. As the public and private sectors are anticipated to speed up the economy after the COVID-19 pandemic, the banking industry must play a pivotal role in fostering economic growth and providing entrepreneurs with equal access to financing, while pursuing opportunities to enable consumers from all segments to profit from economic expansion in the future.
In addition, an increasing number of clients have access to financial services via digital channels, prompting SCB to establish goals based on its strengths in response to changing business landscapes. Therefore, it is essential for the Bank to continually evolve to become “a better bank” that provides more than standard banking products and services and that is easily accessible across channels. Loans are only one part of the services offered and clients can also expect investment advice, financial management, and risk management.
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The Bank has therefore established a new vision of becoming a “Digital Bank with Human Touch” as a guideline for developing the organization to become a better bank in all respects by introducing a North Star strategy to lead the business under a three-year plan, which is to be “the number one in digital bank in wealth management, offering seamless experiences across all channels to customers,” focusing on three major areas:
- Digital Banking Transformation: Having experienced a time of digital disruption in which technological companies competed in the financial sector, we now observe that only a small number of them are profitable. On the contrary, banks generally continue to reap profits thanks to a combination of a solid capital foundation and improved service clarity. Moreover, with over 94% of the population having access to financial services and an increasingly pressing need for digital services, Thai digital usage trends are currently at a high level, making them the number one user of financial applications in ASEAN.
Therefore, in order to maximize efficiency, it is necessary for us to transform into a fully digital bank offering a full suite of digital financial services. To attract new clients, we need to put our efforts into creating cutting-edge digital products and services that cater to a wide variety of demographics, while offering novel experiences. In light of recent developments, the Bank has redesigned its management organization with digital banking, information technology, and operations now reporting directly to the Bank’s President and Chief Technology Officer. These three functions are critical to the Bank’s transformation as a cutting-edge digital financial institution. Apart from handling service systems, the new department will play a vital role in the Bank’s future revenue generation and expansion. - Being a market leader in wealth management: The Bank has established a solid foundation for its wealth management services in terms of Thailand’s largest number of IC-licensed relationship managers, a vast array of investment products, and reputable partners. Under the SCBX mothership strategy, SCB’s clientele has been comprised primarily of middle- to upper-class individuals, and the recovery of the economy following the pandemic has led to the return of wealth.
Bank products and services present a chance to help personal and corporate clients expand their fortunes in a variety of ways, including through organic growth, external funding, and international extension of existing holdings. SCB will facilitate the growth of wealth for retail to large customers.
In addition, in accordance with the strategy that has designated digital banking as the organization’s new North Star to guide the organization going forward, the Bank must steer product and service development processes by factoring in the digital experience of all client segments. The Emerging Wealth group, which represents the next generation with the ability and desire to develop early wealth, is the initial target of the bank’s Digital Wealth project, which will employ technology to create wealth for a wider range of consumers.
This clientele may not be very well off right now, but they are eager to build their wealth through investment. Without the support of financial advisors, they typically plot out their investments on their own. Therefore, the Bank hopes to leverage digital solutions to provide optimal savings and investment options for clients in this group, ultimately leading to hyper-personalized offers that encourage clients to take advantage of potential wealth building prospects in numerous forms. This initiative will serve as a model for how technology might be used to improve the shopping experience for other demographics in the future. - Enhance a seamless service experience across all channels: The Bank believes that technological capabilities are merely a portion of the client experience. Nonetheless, the core of the Bank’s Digital Bank with Human Touch vision is a positive experience at the point of service across channels. We are committed to enhancing service experiences by increasing the seamless connectivity between client touchpoints in both the digital and physical worlds, as well as by modernizing infrastructure to provide both the flexibility and capacity to provide broader services. Customers will be able to obtain financial services through familiar channels anytime, anyplace. All customer segments must have a consistent, seamless experience across all service channels.
The Bank also recognizes the importance of maintaining a well-balanced credit portfolio in order to promote long-term growth. The Bank will now concentrate its operations on secured loans, with the goals of steady expansion of credit and satisfactory returns given the level of risk taken. In times of rising interest rates and a volatile economy, the Bank will give preference to its highest quality customers in order to maintain and improve the quality of its assets.
The Bank’s operations, including customer service and internal management, will prioritize sustainability practices. As of December 31, 2022, the Bank’s overall credit portfolio was worth 2.3 trillion baht, divided into 980 billion baht in personal loans, 410 billion baht in loans to small and medium-sized enterprises, and 920 billion baht in loans to large corporations.
The Bank plans to expand its loan portfolio while still ensuring its high quality in 2023. The cost-to-income ratio is planned to be around 40%, while the target growth in loans is around 5% and the return on equity (ROE) over 10%. After completing its digital transformation over the course of the next three years, the Bank plans to lower its cost-to-income ratio to below 40% in 2025.
Other goals for that year include increasing the bank’s share of the wealth wallet market to 40% and allocating an additional 100 billion baht toward green finance in accordance with the Bank’s ESG intention for sustainability. The North Star strategic thrust is what will propel SCB to improve in line with its Digital Bank with Human Touch vision, which will impress customers with services that truly fulfill their needs through data and a human touch. It will ultimately lead the Bank to become number one in the hearts of every group of consumers in 2025,” Kris summed up.
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