TMBThanachart Harmonizes Human Touch with Digitalisation for Unique Client Experience

Cutting-edge innovation that puts the customer at the centre of everything defines how Thailand’s TMBThanachart Bank has been operating in recent years. Its mission is to revolutionize banking and deliver personalized solutions to clients by making their financial well-being a top priority. Its success is clear – and is likely to be long-lasting.

With great power comes great responsibility, goes the saying. In a country’s financial markets, being a domestic systemically important banks (D-SIBs) also comes with its own share of responsibility – to shareholders, to clients, and to the stability of the broader market.

In Thailand, D-SIB TMBThanachart Bank (ttb) has taken that responsibility seriously by focusing on its core philosophy: to Make REAL Change.

That has involved creating a new banking approach focused on three ecosystem target groups, centred around ttb’s strengths and competitive edge: the salary man, the car owner, and the homeowner. ttb has harmonized that with a push to take its products and services to the next level by leveraging the concept of human digital banking, making for a hard[1]to-beat client proposition

The result: ttb walked away with three key awards in The Digital Banker’s 2023 Global Retail Banking Innovation Awards: Best AI Initiative, Best Digital Sales Initiative and Mortgage Product of the Year. Unmatched personalization.

One of ttb’s cutting-edge innovations came in 2021 when it launched Delphi Personalized Engine as a response to the uniqueness of individual customer needs. Built in-house, Delphi is a REAL-TIME personalisation engine that tailors experiences or communication based on data-driven analysis of customer behaviour. Using logic, machine learning, optimisation and reinforcement learning, Delphi anticipates a client’s needs and pains, and fine-tunes solutions that are sent to the right customers at the right time and through what the client considers the right channel of communication.

That level of personalisation reflects ttb’s ability to keep its ears to the ground, know what clients want and when, and provide them with the right products or services.

Critically, Delphi is not a black box, and understands there is no one-size-fits-all solution – which is important given ttb caters to roughly 10 million customers as Thailand’s sixth-largest retail bank by assets, including 4.5 million clients through mobile banking. The engine is fairly transparent in how it captures bite-size information and insights from customers and turns them into relevant products and services, as well as personalised messages or sales scripts for ttb’s relationship managers.

For example, Delphi helped over 2 million customers go through ttb for free life and accident coverage. It helped clients be more mindful of saving and spending by suggesting promotions based on their lifestyles and behaviours. And it helped identify clients needing cash for their homes or cars, and recommended debt consolidation programmes that cut their interest burden.

This approach – ttb boasts an 80% accuracy rate on Delphi – has resonated well with ttb’s roster of clients, who are now engaging more with the bank, are responsive to cross-selling options and are keener than ever to remain loyal to the firm. ttb is seeing three times higher client engagement thanks to Delphi, 90% customer satisfaction, and three times growth in personal loans sales volumes and 9 times higher credit card bookings.

For financial well-being support, too, Delphi has ushered in change. Some 29% of ttb’s previously late-paying customers are now on time with their credit card bills, and 57% are on time with their home loan payments. An impressive transformation, indeed.

RESPONSIBLE DIGITAL LENDING SALES

ttb has revolutionized unsecured lending in Thailand through its groundbreaking initiative of Responsible Digital Lending Sales. The initiative prioritises a customer-centric approach but leverages data-driven strategies and behavioural science to provide a more unique and tailor-made experience.

The idea is to help customers choose the right products based on their preferences and financial behaviour, with the intention of providing them with better financial well-being. This emphasis chimes with ttb’s overall focus areas for clients: mindful spending and smart saving, healthy borrowing, investing for the future, and sufficient protection. To that end – and to emphasise responsible digital lending sales – ttb has streamlined processes to make the sales journey entirely digital, meaning clients can access products and obtain loans conveniently with just a few clicks.

ttb taps into an omnichannel sales approach to reach a board base of customers while keeping costs contained. The firm’s sales teams rely on everything from social media and mobile app push notifications to phone advisory services to stay close to their clients.

The bank has also rolled out risk-based pricing in a bid to reward good and timely payment behaviour with lower interest rates. For this, ttb once again uses customer data to analyse the risk profiles of clients to have a better balance between profitability and risk mitigation.

The results have been impressive. ttb has seen consistently low delinquency and non-performing loan ratios of just 1%, ensuring the sustainability of the business model even during periods of significant growth.

Digital lending sales for credit cards spiked 2.5 times year-on-year, while personal loans grew a remarkable 3.9 times in 2022 – both outperforming the industry average. ttb’s digital pivot has also boosted productivity and reduced client acquisition costs, helping prop up the bank’s top-line growth. The important thing is that by focusing on responsible digital lending sales, ttb is able to make an impact in numerous ways. Internally, it’s able to lower costs and boost its client base. Externally, its customers are more financially savvy and able to reduce their financial burdens. This will, in turn, give them greater access to borrowing for essential needs like homes or cars, with will help spur the Thai economy to new heights. ttb’s role will be invaluable in that journey.

HOMEOWNER SUPPORT

Another reason for ttb’s stellar reputation in Thailand’s financial circles is the way it has stayed close to clients during good times and the bad. Nothing exemplified that better than the way ttb supported customers who were drowning in debt and were cash-strapped after the worst of the COVID-19 health crisis.

ttb’s answer was rolling out a retail banking debt consolidation programme, specifically targeted at homeowners, in the fourth quarter of 2021. Through the scheme, homeowners could use their homes as collateral to consolidate high-rate loans – be it credit card or personal loans – into one with a lower interest rate and monthly payments.

The objective was to promote healthy borrowing among clients and give them avenues to exit their existing high interest rate debt burden and better manage their liquidity.

Given the solid market response, ttb even bolstered this scheme in 2022 by increasing the credit limit to up to THB 15 million from THB 10 million, and by expanding the types of collateral to include homes and vacant land in 2023.

The debt consolidation scheme is unique in Thailand and goes a long way in easing the financial strain facing customers. The programme lowers the instalment amount and offers households more liquidity, reduces the interest due on debt, provides an easier way to manage debt, and instils better financial discipline among clients.

Thais certainly seem to agree. The initiative generated a 137% spike in high-yield mortgage loan growth for ttb in 2022, and a loan book of THB 1.67 billion, higher than the targeted THB 1 billion. For 2023, the targets were a loan credit line of THB 2 billion and interest savings of THB 374m for clients, with ttb achieving THB 1.4 billion of loans and THB 237 million in savings by the end of the first half of 2023.

ttb’s focus on transforming customers’ banking experience while making their financial well-being a priority offers it a clear edge over peers – and gives real meaning to being a responsible bank.

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