Various initiatives and innovations were initiated in the area of Consumer Banking with the support of the latest digital
technology, as well as cross selling efforts to improve service quality and offer one-stop service through branchless banking.
Mortgages
CIMB Niaga is the fifth largest provider of mortgages in Indonesia. The year 2014 was a challenging one for CIMB Niaga due to more stringent loan to value (LTV) ratio of 70% for a house of 70m2 or bigger. The year also saw an increase in interest rates and tighter liquidity.
In response to this, and the increasing competition in the area of mortgages, CIMB Niaga focused on speeding up its processes, and on its flagship product KPR X-Tra Manfaat. One significant improvement in the banking process has been supported by new technology that allows credit approval in less than 10 minutes, via a loan tablet. The tablet enables the CIMB Niaga sales team to provide immediate information about mortgage products, installment simulations, as well as an online application process. From the mortgage product point of view, CIMB Niaga has been promoting X-Tra Manfaat, a mortgage that can be linked to up to 9 saving accounts of each customer. The balance of saving accounts can be used to reduce mortgage interest expenses, thus leading to a faster settlement of mortgage.
improvements that have resulted in faster credit approval.
In 2015, CIMB Niaga’s mortgage department will continue to strengthen the Bank’s relationship with home developers, keep interest rates competitive and speed up credit application approval.
Auto Loans
After CIMB Niaga’s mortgage business, the auto loan business (KPM) is the second biggest segment that has contributed significantly to Bank’s consumer loan portfolio.
CIMB Niaga disburses both direct and indirect financing for motor vehicle ownership (KPM). Direct financing is disbursed through branch offices, while indirect financing is channeled via the Bank’s two subsidiaries, PT CIMB Niaga Auto Finance (CNAF) and PT Kencana Internusa Artha Finance (KITAF), as well as through joint financing with other multi-finance companies.
In 2014, the auto loan business felt the impact of minimum down payment regulation. Nevertheless, CIMB Niaga was able to maintain its overall auto loan portfolio, which by the end of 2014 reached Rp12.2 trillion, an increase of approximately 4.3% from the previous year’s figure.
In 2014, the Bank made efforts to grow its auto loan business. Not only did the Bank continue to strengthen cooperation with automotive dealers, it also implemented a cross-selling strategy that has contributed significantly to business growth.
In 2015, CIMB Niaga is planning to speed up its credit application process, expand its marketing reach to the Eastern parts of Indonesia, and continue to strengthen partnerships with automotive dealers/showrooms as well as internal cross-selling to the customer.
Personal Loans
The personal loan business demonstrated outstanding performance in 2014, growing by 37.3% from 2013. This achievement was complemented by sound credit quality with an NPL level of 1.56% at the end of the year.
The Bank’s cross-selling strategy, which targets the salaried segments, has proven effective in improving both the performance and quality of CIMB Niaga’s personal loan portfolio. Customers with a good credit rating have been taking out loans under this initiative since 2013.
CIMB Niaga ran a number of promotional activities in 2014, including the home exhibition “Kampoeng Halaman,” which attracted 25 leading developers from 10 cities. The exhibition was held from 16 to 19 of October in Balikpapan, which is known as the “oil city” and has vast growth potential.
In addition, a series of customer gatherings and developer/
property agent gatherings were held in 12 cities. The gatherings not only strengthened the Bank’s relationship with its customers and partners but also contributed to its sales growth.
CIMB Niaga’s mortgage department continued to perform well in 2014, as evidenced by the number of awards received by the bank from various institutions, namely:
1. Property & Bank 2. Property Indonesia 3. Property& The City 4. Mark Plus Inc 5. Residence Indonesia 6. Rekor Bisnis 7. Housing Estate
In an effort to expand its market share, CIMB Niaga’s mortgage department has strengthened the Bank’s cooperation with home developers. The year 2014 saw a significant improvement in the Bank’s cooperation with key partner developers through signing of cooperation agreements, and joint promotions and events.
Insurance
Bancassurance is one source of CIMB Niaga’s fee-based income, which is derived from the sale of insurance products and life insurance in collaboration with partners, including CIMB Sun Life, a subsidiary of CIMB Niaga.
Insurance products offered by CIMB Niaga relate to the Bank’s mortgage and auto loans. Bancassurance supports CIMB Niaga’s One Stop Banking services.
In 2014, CIMB Niaga’s mortgages and auto loans decreased due to OJK’s new regulations, which set upper and lower limits on insurance premiums, and regulate insurance premiums by regions. The new regulations caused fee income from bancassurance to decline by 43.2% in 2014 from the previous year.
CIMB Niaga managed to maintain its insurance policy sales and income from insurance premiums in 2014. In fact, the productivity of the Bank’s telemarketing section increased by 70% from 2013. CIMB Niaga attributes this increase to the comprehensive training it offered its 1,920 frontline sales employees at its branch offices.
This achievement goes hand in hand with the Bank’s efforts to educate the public about the importance of bancassurance products, which offer protection to customers while giving optimal return on their investment. In 2014, CIMB Niaga held as many as 117 events for its customers in order to market its bancassurance products.
In 2015, the bank is planning to implement a faster credit application process and a risk-based interest rate to gain larger market share and improve performance.
Cross-Selling
CIMB Niaga Consumer Banking Unit conducts cross-selling activities through building cooperation with the Corporate Banking and Commercial Banking & MSME Units. One of the products that is a result of cross selling is CIMB@Work, which targets the salaried market.
In 2014, CIMB Niaga focused on expanding CIMB@Work by offering loan products and payroll services. One of the services offered is the Company Benefit Program (CBP), which is a financing model linked to benefit programs or subsidies from the companies the employees work at. This service is supported by the e-channel that connects the Company with corporate customers who use CIMB@Work.
One of the services offered by CIMB@Work is the House Ownership Program (HOP), which offers convenient mortgages to the employees of CIMB@Work’s corporate clients. The enactment of the new Loan-to-Value (LTV) regulation for purchase of houses on credit in 2013 resulted in the weakening performance of HOP in 2014. However, as our corporate customers managed to adapt the regulations internally, we are expecting to see the market return to normal, or even improve, in 2015.
The cross-selling strategy in 2014 focused on ensuring an increase in customer savings; encouraging the use of debit cards with the aim of increasing transaction volume to contribute positively to the Company’s fee-based income;
and acquiring a large number of new savings account customers through telesales.
CIMB Niaga continues to provide convenience to customers while they go about their daily activities though its debit and credit card services. By the end of 2014, CIMB Niaga offered 9 types of credit cards, including: Classic, Gold, Gold Sharia, Platinum, Ultimate, Infinite, World and Corporate. This allowed the Bank to reach customer segments with varying needs and preferences.
In 2014, CIMB Niaga focused on building the foundations for a future expansion of its credit card business through co-branding. A number of new credit card products were launched during the year, including CIMB Air Asia BIG Card, a result of the Bank’s cooperation with Air Asia. Air Asia BIG Card offers variety of benefits such as free annual fee, triple BIG points, 0% installment and promotional programs for AirAsia free tickets. In addition, CIMB Niaga also engaged with JCB; a Japanese credit card principal in launch the JCB Ultimate credit card, which targets the premium customer segment.
credit card issuer, gaining a market share of 11.1%.
The number of credit cards issued grew by 11.4% to approximately 1.8 million cards, with total sales volume up by 21.1% from the previous year to Rp18.6 trillion. The total outstanding credit card balance was Rp5.3 trillion. Non- Performing Loans (NPL) reached 1.2%, still well below the industry average of 1.9%, which indicates the quality of the Bank’s credit card loans.
CIMB Niaga’s debit cards remained one of the customers’
favorite means of making daily payments. The main benefit of the Bank’s debit cards is easy access to funds through the national and international ATM network. Customers with debit cards can also enjoyed a number of promotional programs and attractive offers from the Bank’s various merchant partners .
In 2014, for example, CIMB Niaga teamed up with Hypermart, Lottemart, Cinema XXI Century and other prominent outlets to provide more benefits for CIMB Niaga’s debit cardholders.
In 2014, CIMB Niaga continued to improve its debit card capabilities in response to the growing trend of online shopping. One of the Bank’s initiatives involved a one-time password that will be sent to customer’s phone number to provide extra security for online shopping.
As of the end of 2014, the number of CIMB Niaga debit cards reached more than 2.5 million, an increase of 13% from the previous year. The volume of transactions made with CIMB Niaga debit cards grew by 40.3% to Rp3.1 trillion in 2014.
Both the credit card and debit card business segments still have a lot of potential for growth, given that consumer spending remains one of the key drivers of Indonesia’s economy and the number of people in the productive age bracket is continually increasing. Bank Indonesia has issued regulations relating to the tightening of credit card ownership and obligations associated with using a PIN (Personal Identification Number) on credit card transactions, but those are not expected to have a significant impact on the Bank’s credit card business.
In 2015, CIMB Niaga plans to continue marketing its credit and debit cards. The Bank’s particular target segment will be young cardholders who are increasingly reliant on speed and mobility when conducting their daily activities.
(PPWM) Unit provides specialized banking services for individual customers with assets exceeding a specified amount. The growth of mid and upper income classes in Indonesia in recent years has given CIMB Niaga PPWM an opportunity to increase its business volume.
CIMB Niaga PPWM offers a diverse range of wealth management products such as, treasury products that consist of foreign exchange, strike currency, market linked deposits, swap depot and bonds, as well as mutual fund products and bancassurance products. These products are designed to meet the needs of customers who seek to develop and protect their assets, thus securing their financial future.
To encourage business growth, CIMB Niaga began implementing a segmentation strategy in 2014. The strategy is based on CIMB Niaga’s ability to identify and approach prospective customers in the mid-upper segment through the Banks existing service channels.
In addition, CIMB PPWM has continued to focus on the development of human resources. Capacity building is important given that any of the Bank’s interaction with customers should be tailored to meet each their preferences and lifestyle. The capacity of human resources should be enhanced through regular training sessions for Relationship Manager related to product knowledge and risk management, as well as professional certification according to identified needs.
In 2014, customer fund under CIMB Preferred and CIMB Private Banking grew by 9.3% to Rp63.7 trillion. CIMB Niaga PPWM business contributed a fee income of Rp631 billion for the year.
I have been a holder of CIMB Niaga Credit Card for more than 15 years. I have a job that demands me to travel frequently, both within the country and overseas. Every time I travel abroad I frequently use my CIMB Niaga Credit Card to support my work activities for its competitive exchange rates. In addition, as a customer of Bank CIMB Niaga I also have another benefit for not being charged for cash withdrawals at local ATMs in other countries, especially in Asia. As someone whose work demands him to travel on very short notice, I often have no time to find a money changer to exchange money, and therefore find this services offered by CIMB Niaga very helpful for it is very easy and efficient. On the other hand, CIMB Niaga Credit Card also offers a variety of attractive programs such as installments at various merchants and special discounts at certain restaurants, which I usually enjoy with my family during weekends.
I became a customer of CIMB Niaga when I was still a teenager years more than 25 years ago. For my banking needs, I was looking for a simple and fast one. I chose CIMB Niaga due to the proximity of its branch office to where I would have my activities. But, I later found it hard to change my bank because CIMB Niaga not only meets my criteria for simple and quick services but offers excellent services in more personalized manner. Going forward, I hope that CIMB Niaga will continue to be better by delivering new innovations for each of its program, stay out of the box while still laying top priority on excellent services.
Andy Adrian Commercial Director AirAsia Indonesia
CIMB Niaga’s savings products for individual customers continued to show encouraging performance with a growth of 11.2% in 2014 from the previous year. This growth demonstrates the success of CIMB Niaga’s focus on increasing the number of savings products andthe number of transactions.The Bank has been successful in encouraging savinghabitsamong customersby offering features that are designed to meet customers’ needs and by running attractive promotional activities. Growth of savings products continues to be supported by cross selling efforts across CIMB Niaga’s distribution channels.
In 2014, CIMB Niaga introduced a number of new savings products, including those that have beenrepackaged, such as CIMB Niaga Hypermart Savers, IDR and USD Business Savings, On Account and Tabungan Pendidikan Xtra. These products have added to the variety of optionsoffered by the Bankto meet the needs of various consumer segments.
CIMB Niaga Hypermart Savers
CIMB Niaga Hypermart Savers is a saving product launched in January 2014 in collaboration with Hypermart. CIMB Niaga Hypermart Savers’ customerscan enjoy numerous benefits such as cash back promos of up to 10%, cash back/discounts from other merchants too , an interest rate of up to 2% per annum, free administration fee, customer passbook with transaction details, and easy transactions via CIMB Clicks and Go Mobile. In order to support CIMB NiagaHypermart Savers, a series of promotional programs were launched –ranging from special cash backs in the month of Ramadhantoa lucky draw program for the period of October 1 toDecember 31, 2014, with a grand prize of Rp10 million and monthly prizes of Rp1 million.
By the end of 2014, the total number of CIMB Niaga Hypermart Savers accounts reached 70,763 with total funds of Rp394 billion.
Business Savings for Individual Customers
In March 2014, CIMB Niaga launchedits IDR Business Savings product for individual customers.IDR Business Savings attracted 1,966 account holders who generated a total fund of Rp808 billion by the end of 2014.
customers can use to support their business activities, including: competitive interest rates, auto sweeping, free text notification, free domestic transfers over the counter, CIMB Clicks & Go Mobile facilities and cash pick-up services, as well as printed details of transactions. In addition, account holdersare able to enjoy Poin Xtra, which are reward points gained thoughan increase in balance and the number of transactions thatcan be used when shopping and dining at selected merchants .
Following the success of IDR Business Saving, CIMB Niaga launched USD Business Savings in October 2014.
Tabungan PendidikanXtra
Tabungan PendidikanXtrawas launched in April 2014 and attracted 712 accounts with a total fund of Rp14 billion by the end of the year. The program achieved this impressive figure by offering a variety of benefits, including: five-time monthly depositscash guarantee, educational guarantee of one-time monthly deposits, both of which could be claimed if the specified risks befall on a customer and the customer will receive it every month according to the tenor he or she has selected. Other benefits of Tabungan PendidikanXtrainclude interest rates of up to 5% per annum and free insurance premiums.
ON Account
Another convenience offered by CIMB Niaga for individual customers is the On Account, which has been officially re- launched in August 2014. ON Account offers easy account opening, queue-freeservices and other simplified account- related processes. In addition, ON Account also offers other benefits such as competitive interest rates, Poin Xtra, no administrationfeein order to promote the Bank to the public.
Towards the end of the year, a special event for bloggers received very positive response from prospects and customers. The event, which promotedON Account, attracted new customers, bringing the total number of accounts for this product to 7,216 with a volume of Rp132.5 billion by the end of 2014.
was supported by transactionsmade through branchless banking channels.Therewas alsoa decrease in the number of transactions made at branch offices. This corresponds with the trend in today’s banking market, where more and more customers are given more transaction options without having tovisit branch offices.
It is an undeniable fact that the physical presence of a branch office is necessary as a number of banking services still require direct interaction between customers and bank officers, for instance check-cashing and purchase of mutual fund products.
As a result of this, CIMB Niaga has implemented a strategy to optimize branch performance. Other steps takenhave included:selectively opening branches in locations with attractive business potential, branch relocations and closing of branches that have shown underperformance.
During 2014, CIMB Niaga opened 5 branches, relocated 11 conventional and sharia branches, and closed 15 branches.
In addition, the Bank has shown its innovativeness by launching alternative branch modelssuch asMobile Cash units, and Digital Lounge,whichoperatein strategically located shopping centers and offices. Such branches have longer operating hours and are open during weekends when possible. By the end of 2014, there were 20 Mobile Cash branches and21 Digital Lounges ready to serve visitors in malls and office buildings.
By the end of 2014, CIMB Niagahad 568 network branches equipped with 3,272 ATM units and 666 CDM units throughout Indonesia. The Company had 30 sharia branches, supported by 527 branches that function as Sharia Office Channeling, as well as 92 branch offices that function as Rahn pawn outlets.
Service Quality
CIMB Niaga knows that quality service is one of the keys to always staying ahead of the increasingly tough competition in the banking industry. Therefore, CIMB Niaga seeks to improve the quality of service on an ongoing basis, with an intense focus on customer experience. The goal is to not only provide services that can meet the needs of customers, but also provide banking experience that exceeds their expectations.
CIMB Niaga regularly measures important service indicators that directly impact the customer banking experience, always listens to customer feedback through customer satisfaction surveys, actively monitors customer complaints, and evaluates the customer experience on products, service or promotion programs the Bank has offered.
Based on the findings, CIMB Niaga then made improvements and enhancement at all of its customer’s touch points, both related to the aspect of people, product and infrastructure.
Initiatives undertaken include policy renewal and process improvements related to transaction flow, and renewing support system. From the aspect of people, CIMB Niaga regularly motivates and provides training programs for branch employees on Security, Customer Service, Teller and for Supervisors at branches. The trainings given include:
trainings for service skills, service mindset and service motivation.
In 2014, customers of CIMB Niaga especially those who come to the branch office, can enjoy improved quality of service and enhance their banking experience. For example, queuing has been better managed so more than 80%
visiting customers only have to wait 8 minutes before one of the tellers serves them and only 15 minutes to be served by Customer service staff. Following the implementation of formless transactions for cash deposits, cash withdrawal, and transfer transaction, customers now no longer have to fill out transaction form before confronting the teller counters for their transaction purposes.