CIMB Thai Digital Wealth Transformation Success
Leading Woman Investment Administrator- Dutsanee Kliawpatinon
Around March 2020, the situation of COVID-19 outbreak in China reached phase 3 and was spreading to several countries. However, the economic impacts were not considerable. At that time, the Forbes Thailand Team had an appointment with Dutsanee Kliawpatinon, the Managing Director for Wealth Management of CIMB Bank Thai the top executive in wealth management field of small-sized banks whose shares are held by CIMB Bank from Malaysia.
On that day, despite non- severe impacts from COVID- 19, the leader of wealth management from CIMB Thai stated that it was necessary to hurriedly adjust investment mode to low risk as soon as possible, and avoid high-risk investment especially in “stock” that should be in long pause or withdrawn if possible. It is in fact as what she said. After the beginning of March, Thai stock index started having a bad sign. 1 week later, the stock index plunged to 969.08, the lowest in 8 years, and continued going down until the Stock Exchange announced circuit breaker for 2 consecutive times.
“For now, the investment is at high risk with large fluctuation. But the fluctuation is “profit” maker”. If it is sale to avoid rain, when the rain stops, don’t forget to reinvest”. The leader of investment opened the discussion on that day with current situation before telling us an overview of the investment that in past years, there are dramatic changes not only because of technology, but also from various factors. So, every financial institution needs to adapt, and most have already done it, but there is still so much to do for adaptation.
Accumulate experience of capital market
The path to financial business of Dutsanee started from the time she had on-job training in financial management department of Citibank. Then, she took care of share finance credit “let’s say, I looked from the research to customers. It was enjoyable, and at that time, SEC changed the law that only share certificate was used as guarantee. I saw that the business may not be the same so I look for other opportunities. Plus, at that time, my ex-boss asked me to be a broker at Nithipat which at present is Kim Eng, I took a look at research in all non-bank part”.
Dutsanee stated that now, her main job is in capital market and stock analyst, doing company visit, viewing financial statement and other relevant parts. After that, Nithiphat closed down and became Maybank Kim Eng. She moved to Bank of Asia which at present is UOB Bank. “When I had an interview at UOB, I asked them if they were certain to let me do wealth operations because I had never done this before, A Singaporean CEO said “I think you can do it because you have experience with treasury, and deposit rates for 10 years. We are the first to do step- up, but we have not advertised it. The customers know but others don’t”
“For now, the investment is at high risk with large fluctuation, but the fluctuation is “profit” maker”. If it is sale to avoid rain, when the rain stops, don’t forget to reinvest”
Then, Dutsanee was assigned to take care of insurance and fund. When she felt saturated, her ex-boss asked her to work at CIMB Thai. So, she moved and did various jobs “Today, if somebody asks me if I will return to do credit, I would say I don’t want to do it again I was asked to be here and take care of everything: wealth, saving, and every retail product”
After being with CIMB for a while, I was steady and then was responsible for wealth management and segment, which is savings management. Dutsanee repeated that “CIMB is unique as the rich can save and the poor can save too. 4-5 years ago, someone asked me what the wealth business in Thailand would be; I was stunned and said “I cannot tell you”. At that time, iPhone was just introduced, and everyone still used Blackberry. On that day, the Bank of Thailand still controlled export currency.
I believed that we need to liberalize. We cannot be just behind times and outdated that we have it “in” and no “out”. They transfer money in to destabilize our currency all the time. It would be bad if we did not export it. We strongly believed that we have to change it in 5 years”. This is a perspective of the wealth leader of CIMB, and what she said came true, because 2 years ago, foreign stock trading was possible, and the investment world actually changed.
Administration through age-transition
“The world dramatically changes. If we just stay still like Sleeping Beauty for 2 years and wake up, the world is totally different around us. Every industry such as publishing, hospital and everything changed. In the past, when we would like to have a meal, we would call for reservation, get dressed and go out. These days, with only Grab, anyone can buy food from anywhere, any restaurant. Today, everyone is a member of Shoppee, Lazada, Alibaba, at least one. Sometimes, we feel like we do not want to go out, and so we don’t. One of my colleagues told me to buy online only as when 5G comes, it will create a lot to competition and change”. Dutsanee evaluated the future and the world changing with technology.
Wealth management business in the past and at present is different. There are huge changes starting from products. In the past, when speaking of wealth, 50- 60% was saving and the remainder was fund while debenture was lower because it was not famous. “the debenture is well- known because in the past, the government bond had small interest and must be held for 10- 15 years and that people did not want to buy it. After the economic crisis, the company said whether it should provide loan and find retail borrowers with no means. So, the debentures were issued, and it created price competition. Now, there is structure note, complex funds. In the past, the derivatives were used. If the stock went down, we would not go down, but if the stock rose, we would rise as a structure was valued for 5 million Baht, and the buyers were large companies such as PTT. At present, retail customers can by through structure note fund, with minimum price at 500,000 Baht as complex product. Some say 5,000 Baht is possible with limited size.
Dutsanee added that in the past, the debentures were sold periodically and mostly it was 3- 4 days because of IPO. Now, it can be purchased every day at CIMB Thai due to secondary market. Furthermore, the tools change with systems. “Today, the customers change, their habit changes, knowledge changes, and depth changes. From the past, the investment portfolio was normally arranged, today there can be 5 portfolios and a portfolio may be for children, a portfolio for buying a house, a portfolio as estate, a portfolio for travelling, and it can be divided into smaller portfolios”
Not only do the products change, the banks also considerably change. “no matter how big the bank is, today, it depends on the platform. The large banks, if they downsize, will have limitations. However, the small banks can do it right away when having a platform” Furthermore. The systems change from order system and customer relation with information given through Facebook and Line for customers to read easily. If they are interested, they can chat in Line or have face-to-face communication. “There is no more the way to sell like “please buy with me, I have target to reach” as the customers may ask you back why they should help you, or whether they owe you anything. Today, it’ s not only you. The competitors have many things from several MFBS company (mutual fund brokerage Securities Company). 9 MFBS companies take others’ products for sale” Difficult problem “One-baht interest” Today’s investment presentation method, apart from AI and Robo Advice with AI contributing to sales needs to be considered about how to serve customers to be happy and meet their needs. “Today, the interest is 1 Baht, and 1% can change everything. SEC says that now, the customers seek for yield with lowest interest in Thailand. The interest will be decreased again this year. USA will reduce it, but it will not have much effect. The loan will be lowered and saving can be down moderately. Saving interest is 50 Satang. The government announced that the inflation was 1-2 Baht but in fact, it may be more or less because of the oil price not going up. Our cost of living rose the least per capita for 5% per year. This is a conservative outlook and it is not normal inflation. We need to find revenue with return more than 3% to be all right, and saving will not be able to stay the same”
Dutsanee said that there are no best returns all along the way. Now, if you buy a lot of gold because of high profit, you may be shocked. Direct investment is possible if you are certain about your ability, but if you are not confident, you may let AMC take care or you just divide your portfolio. “Today’s economy is not promising, and if someone tells you that the economy is good, it is deceiving. There may be several times of layoff in the year because Chinese tourists and business people are not coming, and no stocks arrive at the factories. Today, even airlines ask employees to leave without pay. The crisis has really happened. The hotels are stagnant and ask staff to go on leave without pay or make payment of only 30- 70% of salary. So, you save money or find a yield seeker to organize the portfolio of investment effectively by considering how much risk you can take”
Dutsanee continued that if you want to be relaxed you just deposit money. “Today, the banks protect savings of 1 million Baht/ institution. So, it can be any bank but only million Baht is protected, and the rest requires protection. You thus need to find Investment. If you just deposit money, you do not need RM relationship manager, but if you want more returns, you need a person to take care and a good product”. “For investment don’t think that others can bring the best to you. You should pay attention too. It is not that he/she is not good, but nobody has better understanding than you, and banks should have a system”
Customers do not have brand loyalty
Technological changes are difficult, but Dutsanee said that another difficulty found in current investment management is that the customers are not committed to any bank in particular.
“New-generation people do not have brand loyalty, which is different from the old generations, saying that this bank lent them to grow and they thus deposit 50 million baht with the bank. However, the 40-aged people do not focus on this but seek for yield”. We chose a technology vendor who has helped us achieve our goal, Intellect Design wealth software from Bangkok shares our vision.
For CIMB Thai, Dutsanee says that it adapts everything including persons, products and systems. “It started from a concept that we will become a digital bank. Fortunately, we are a small bank and able adapt rapidly”. CIMB Thai has 2,000 employees, which are not many, and although some branches are closed, the employees were moved to work in other positions. There is online Facebook training and it is the first bank that started wealth management training for employees as to how to give information to customers, interact etc. They can open the application to serve customers at home. The Facebook Page “Be the Victor” is provided for clients to be a victor in their own way and gain inspiration from about 100 persons who are successful, the customers take a look by themselves without any annoying telesales speaking.
“We need to adapt as if we do not adapt, we are dead. We have to take a look at how to access which customer groups as each group needs a different approach. For the group with high net worth, we may meet them. But, if customers are new generation using online platform, it may be advertised online for 1 minute to sell for 60 persons. That is the power of platform. We can give information to customers. If they are interested, we call and chat in Line for more information”. That is how to sell investment at present.
note: the article originally appeared in Thai language in Forbes Thai edition which has been translated in english for easy understanding.