Focus shifted upcountry, fee incomes in turbulent time
To cope with the changing spending behaviour and lifestyles of retail – or individual – consumers in the current political and economic climate, Kasikornbank has adapted its strategy as it strives to sustain growth and minimise risk.
KBank executive vice president Pakorn Partnatapat said the political unrest had influenced the spending behaviour of retail consumers, reflecting on the bank’s main products.
In regard to mortgage repayments, the bank has seen much less overpayment on the part of customers who used to pay in excess of the minimum monthly requirement. This is a sign that customers are more cautious about what they spend and are reserving cash to deal with unexpected risk in uncertain political and economic conditions, he said.
As to credit cards, spending on luxury products fell sharply in the first two months of the year, especially the use of plastic to buy home appliances, for which credit-card spending plunged 19 per cent year on year – followed by jewellery and watches, which saw a 15-per-cent reduction.
Meanwhile, KBank’s personal-lending utilisation rate dropped to 36 per cent at the end of the first quarter, from 38 per cent at the close of last year.
Because of these spending decreases, KBank has lowered its full-year retail loan-growth target to 6-9 per cent, from the earlier projection of 10-13 per cent.
It has shifted its focus to the provincial market, and also to fee income from activities that are less affected by economic volatility, such as fees from fund transfers and public-utility bill payments, Pakorn said.
In the first quarter, fee income of the bank’s retail business division expanded by 22 per cent year on year, to Bt6.8 billion.
Pakorn said the bank had recently added a real-time asset portfolio management program called K-Expert MyPort on mobile devices, to cope with customers’ changing lifestyle in regard to financial-planning issues.
In a bid to reinforce its image of digital-banking leadership despite the prevailing market uncertainty, the bank must have new technology across all platforms to serve all customer segments in terms of asset allocation, from mass-market customers to wealthy customers, said the executive.
“Smart devices have increased their role in people’s lives, and we see more and more customers spending time on social media. Given this lifestyle, the trend of asset portfolio management has changed as well. We therefore developed the MyPort program to help customers plan and manage their assets more easily,” he said.
The bank hopes MyPort will enhance savings discipline among its customers, especially as it discovered that far fewer customers these days find it convenient to go to traditional branches to deal with financial planning. MyPort will, therefore, enable them to save time when they want to know their real-time portfolio situation at KBank, as well at other financial institutions.
Each customer can set a financial target up to a maximum of 10 digits, then follow the progress of their assets via their smart devices.
They can also seek help with financial problems through the K-Expert service via e-mail, he explained.
At present, some 50,000 individuals use K-Expert MyPort, which helps the bank sustain the relationship with its customers and also strengthen the position of its advisory services, Pakorn said.
KBank will increase the number of K-Expert staff from 2,800 to 4,000 by the end of the year, he added.
K-Expert services via traditional branches welcome 10,000 customers a month, while about 500 people seek advice by e-mail.
Mass-market and affluent customers using the K-Expert service are very much interested in the same things – how to clear debt, how to invest and how to accumulate wealth when starting a job – he added.