CIMB Niaga also complements its mortgage products with a variety of attractive and competitive pricing options. One of the options is the Smart Rate Pricing scheme that allows customers to have clear reference in the determination of the floating interest rate from the earliest loan stage y using the 7 Day Reverse Repo Rate as reference, which can be accessed directly through the Bank Indonesia website.
In enhancing the brand awareness of mortgage loans, CIMB Niaga organizes a variety of promotional activities, through CIMB Niaga promotional events or in collaboration with leading and long-time developer partners. Such events feature the exhibition of house products and flagship mortgage services with low interest rates. Several exclusive promotions with leading developers have also been launched to provide more benefits for CIMB Niaga’s mortgage customers.
In addition throughout 2017, CIMB Niaga continued to harmonize relationships with developers, maintaining interest rates in order to remain competitive, and increasing the speed of mortgage processing and extending loan tenure to 25 years, to attract first-time mortgage customers.
In 2017, CIMB Niaga successfully booked a mortgage portfolio growth of 12.0% to Rp27.0 trillion, from Rp24.1 trillion in 2016. The ratio of non-performing loans was still at 2.5%, equal to 2016. In addition, CIMB Niaga achieved excellent growth of sharia home financing by 103.1%, reaching Rp5.4 trillion, compared to Rp2.7 trillion in 2016.
CIMB Niaga’s mortgage businesses also earned an award from an independent party, by receiving an award from Housing Estate Awards 2017 for being
”Most Innovative Bank on Mortgage Products”.
In the future, property businesses prospects are expected to provide a significant contribution to the growth of the national economy. CIMB Niaga will strive to expand its market share of mortgage loans and home financing, through targeted joint promotional events with the developers. CIMB Niaga will also continue to demonstrate its commitment to increase competitiveness by prioritizing service quality, process speed and mortgage product innovatives in accordance with customer expectations and needs.
Auto Loans
Auto Loans are the second largest contributor to CIMB Niaga’s Consumer Banking loan portfolio after mortgage loans. CIMB Niaga distributes auto loans to customers, both directly and indirectly.
Direct auto loans are made through branches, while indirect auto loans are conducted through subsidiary, PT CIMB Niaga Auto Finance (CNAF) and through joint- financing payment schemes with other multifinance companies.
In 2017, the Auto Loan portfolio stood at Rp8.7 trillion (including subsidiary) with a non-performing loan ratio at 1.3%. CIMB Niaga will continue to improve the speed of loan processing, focusing on expanding customer acquisition programs and improving service quality, accelerating the expansion of market reach to various regions throughout Indonesia, continuing to strengthen relationships with dealers and showroom partners, and cross-selling to internal customers.
Personal Loans
In the Personal Loan segment, CIMB Niaga implemented a loan disbursement strategy by offering through CIMB Niaga branch offices and through companies using payroll payments through CIMB Niaga. In addition, CIMB Niaga also relies on the speed of loan processing and the application of risk- based pricing as a key strategy to increase market share and improve performance.
In 2017, the Personal Loan business achieved a growth of 7.0% to Rp3.6 trillion compared to Rp3.3 trillion in 2016.
CIMB Niaga continues to implement cross-selling initiatives which have proven to be very effective in improving the performance of Personal Loans.
Through cross-selling, CIMB Niaga provides loan facilities to customers with good track records, so that the loan quality is well maintained.
Wealth Management & Bancassurance
CIMB Niaga offers a variety of wealth management products, including treasury products consisting of foreign exchange, strike currency, market-linked deposits, swap depo and bonds, mutual fund products, and insurance. These products are designed to meet the needs of those customers who plan, develop and protect their assets to ensure a better financial condition in the future. Meanwhile, Bancassurance is one of CIMB Niaga’s mutual benefit businesses, offering both loss insurance and life insurance products achieved through partnerships with insurance companies, such as Sun Life Financial Indonesia, AIA Financial, Sompo Insurance Indonesia and several other insurance companies. The insurance products offered include Mortgage Loan Insurance, Auto Loan Insurance, and other similar products issued by CIMB Niaga.
Bancassurance also supports CIMB Niaga’s One Stop Banking system.
In 2017, CIMB Niaga succeeded in increasing the productivity of Wealth Management sales and insurance products. Sales volume of insurance products in branches increased by 27.1% compared to 2016. In addition, the increase in sales of Wealth Management products can also be seen from the increased sales of mutual funds by 108.6% and market link deposits 37.5% higher than in 2016. This increase in sales productivity is supported by a cross-
selling Wealth Management product strategy and comprehensive training for frontliner sales staff in branches.
Wealth Management’s business performance and sustainable insurance growth was inseparable from CIMB Niaga’s active role in educating the public on the importance of investment and portfolio diversification to optimize both protection and investment returns.
Throughout 2017, CIMB Niaga conducted customer- gathering events related to Wealth Management and insurance product socialization and marketing.
Credit Cards and Debit Cards
CIMB Niaga is committed to provide convenience for customers in carrying out their daily activities with the Bank’s many credit card and debit card products. In 2017, CIMB Niaga conducted credit card management and development in the Classic, Gold, Sharia Gold, Platinum, Ultimate, Infinite, World and Corporate categories to reach different customer segments with their varying needs and preferences. In line with CIMB Niaga commitment, in 2017 CIMB Niaga’s credit card products were awarded “Best Credit Card Product of The Year” by The Asian Banker, and ”Best Cross Border Program” by MasterCard International.
In 2017, CIMB Niaga recorded as the largest sharia card issuers in Indonesia. CIMB Niaga was also listed as one of the largest credit card issuers in Indonesia with a market share of 14.1%, increasing from 13.0%
in 2016. The number of credit cards grew by 7.8% to 2.4 million cards, with total sales volume increasing by 9.4% to Rp27.7 trillion from 2016. The non-performing loans ratio improved to 2.3% from 2.7% in 2016.
Throughout 2017, CIMB Niaga Debit Card products remained a customer favorite as payment tool for daily transaction needs. The ease of access of the ATM networks in the country and abroad and promotional
programs as well as attractive offers from merchant partners were also a major attraction for customers. In addition, several promotional programs were conducted by collaborating with Hypermart, Lottemart, Century and Cinema XXI and with many other merchants. All of these programs provided benefits for CIMB Niaga Debit Card users.
The results from the promotional programs recorded that the total number of CIMB Niaga Debit Cards in circulation was 4.4 million cards at the end of 2017, up by 31.5% from the 3.4 million cards in 2016.
CIMB Niaga will continue to improve the capabilities of CIMB Niaga Debit Cards to anticipate fast growth in online shopping trends of upper middle class consumers. CIMB Niaga Debit Cards are equipped with OTP or One-Time Password capability so it can be used for online shopping transactions.
The credit card and debit card business segments have high growth potential, based on the fact that household expenditure is still a major driver of the Indonesian economy, in addition to the demographic bonus marked by an increasing number of citizens at a productive age.
In order to implement macro prudential policies, Bank Indonesia issued several regulations governing the ownership of credit cards as well as the obligation for users to use PIN (Personal Identification Number) for credit card transactions. However, these regulations are not expected to reduce public interest or affect the growth of the credit card business.
CIMB Niaga Preferred & Private Banking
In 2017, CIMB Niaga Preferred & Private Banking implemented strategies that focused on investment products and portfolio allocation models, putting forward segmentation programs in order to drive business growth. CIMB Niaga also developed the capability of identifying and approaching potential
CONSUMER BANKING
individual customers from the upper middle class segment through existing service channels.
CIMB Niaga provides special banking services for individual customers who have assets above a certain amount in the Preferred & Private Banking segment.
CIMB Niaga Preferred & Private Banking targets the business growth opportunities from the rapidly growing middle and upper middle class population in Indonesia in recent years.
At the same time, CIMB Niaga Preferred & Private Banking continues to pay full attention to the development and quality of Human Resources (HR).
This is important as customer relationships are built on a personal approach, in accordance with the needs and lifestyle preferences of middle and upper class customers. The development of quality Human Resources is carried out through routine training and materials that can be directly applied by Relationship Managers regarding product knowledge and risk management, as well as through professional certification as necessary.
Savings Products
In 2017, Consumer Banking savings increased by 5.0%, or Rp2.3 trillion to Rp47.3 trillion from Rp45.1 trillion in 2016. This growth indicates that CIMB Niaga has implemented strategies and policies for saving product improvement through increased transactions as well as efforts to encourage saving habits among customers, by promoting product features tailored to customer needs and through attractive promotional programs. Savings growth also continued to be encouraged through cross-selling efforts.
CIMB Niaga, once again, introduced several new savings products, including several repackaged products in order to support the growth of savings.
These products included additional features such as Free Inpatient Treatment, Life Insurance and Medical Check-Ups for CIMB Niaga XTRA Savings. Education Savings is also equipped with planned disbursement
facilities, which can be adapted to the needs of customers to fund their children’s school fees.
In addition, existing conventional savings were also enhanced with a sharia option to complement the dual banking product concept offered for CIMB Niaga Consumer Banking products. CIMB Niaga also launched Sharia Installment Savings, which offers a gift of “Waqaf” (endowment). For this product, CIMB Niaga collaborates with 7 “Waqaf” institutions, making it easier for customers who want to do “Waqaf” while saving, using their preferred “Waqaf” types. These products are able to diversify and complement the existing products to meet the needs of a diverse range of individual customers.
Non-Branch Channel
The Non-Branch Channel Strategy in 2017 focused on increasing average balances of individual savings customers, encouraging debit card use to increase individual transaction numbers and deliver a positive impact on CIMB Niaga’s rewards income, and acquiring new customers with large savings accounts through telesales activity.
With focus on developing the Non-Branch Channel in the employee segment, CIMB Niaga actively offers deposit, loan and payroll products. Through this, Consumer Banking was able to deliver a positive and significant impact on the overall performance of CIMB Niaga.
In 2017, Non-Branch Channel Consumer Banking managed to increase its personal loan portfolio by 7% with a new personal loan portfolio of Rp2.5 trillion and managed to acquire 454,642 new credit cards. The achievements were also accompanied by the successful acquisition of more than 492,296 new savings customers, which accounted for 46% of the total growth of new savings accounts at CIMB Niaga.
CIMB Niaga has made a commitment to continuously develop its Non-Branch Channel in the framework of the banking inclusion programs encouraged by Bank
Indonesia and the Financial Services Authority. This effort aims to achieve being at the forefront in providing digital banking services. The development of the Non-Branch Channel services will also be increasingly relied upon as an alternative to acquire new customers and expand the customer base.
Branch Network
In 2017, CIMB Niaga continued to optimize its branch network through placement of the spread of the branch network, and by transferring banking transactions to branchless banking channels. CIMB Niaga also prioritized customer service improvement by rejuvenating several branches, through renovation or relocation into better premises or to more strategic areas. By the end of 2017, CIMB Niaga had an office network of 542 conventional and sharia branches, with 4,500 ATMs and 774 CDM and CRM units operating throughout Indonesia.
The optimization of the branch network will continue in 2018, and CIMB Niaga will also continue to increase branch outreach to customers through opening branches in strategic locations in residential areas, offices and shopping centers, as well as serving customers who live far from CIMB Niaga branches via locating Mobile Cash at locations such as schools, factories, or public events.
Service Quality
Improving customer service quality is a main priority and an integral part of Consumer Banking policy.
CIMB Niaga continues to maintain and offer superior customer experience quality, in line with CIMB Niaga dedication to ensure all customers are always satisfied with the services provided.
CIMB Niaga has its own special unit to handle and manage customer experiences, called Customer Care Unit (Unit CC). As a work unit, Unit CC works wholeheartedly to ensure every service point is able to deliver customer-centric services, socializing the digital platform as the transaction option of choice, initiating
improvements to meet customer expectations, and readily handling customer complaints.
CIMB Niaga involves all business units in improving and increasing the abilities at every service point.
CIMB Niaga also pays attention to human interactions, processes, products, and infrastructure. In this effort, discussions are routinely conducted and are also attended by members of the Board of Directors, who monitor customer service enhancements.
Throughout 2017, CIMB Niaga conducted a number of activities in order to realize the Customer Experience focus. One of these was to continue the internal campaign of “Serving with the Heart”. The campaign is aimed at all employees - frontline, middle-office and back-office - and highlights motivational programs from the Directors to inspire staff, such as Leaders’
Quotes. A collection of inspirational stories (WOW stories) is one of program that motivates employees to consistently provide satisfactory banking services.
Implementation of the project is also done as an effort to focus on improvements from customer feedback.
Customer Complaints Management
In 2017, CIMB Niaga sought to optimize digital banking services and provided a range of services featuring the convenience, security and flexibility of transactions for customers. Promoting a customer-centric culture focuses on customer experience and continuously imbues all employees with the aim of improving service quality to impact on customer satisfaction and loyalty.
CIMB Niaga regularly measures the level of customer satisfaction to assess the effectiveness of the work done. The Customer Feedback System recorded satisfaction levels above 95% in 2017 for services provided by Customer Service Officers and Branch Tellers.
Survey results of e-channel services in 2017 showed that 80% of customers expressed satisfaction with
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the service quality provided. The average amount of financial complaints received by customers in 2017 was 6,500 per month with a complaint rate below 3 bps (base point - per 10,000 financial transactions).
In addition, efforts to improve the quality of service were made with various breakthrough services for customers, such as the ease of opening an account online, e-statement registration, replacement requests for lost cards and change of address through 24-hour Phone Banking.
Various initiatives in CIMB Niaga’s customer complaints management were recognized in 2017 through several awards such as:
1. 2nd rank “WOW Service Excellence National Award“
MarkPlus Inc, Indonesia
2. 3rd rank “Service Excellence” ISMS Trisakti Indonesia.
In the case of customer complaint management, Customer Care at CIMB Niaga handled customer complaints through various channels such as branches, phone banking, social media, CIMB Niaga website, mass media and regulators. Each customer complaint is followed up through the comprehensive customer complaint monitoring system, to ensure the speed and quality of settlement. In 2017, the Customer Care Unit recorded that 94% of customer complaints were settled under the Service Level Agreement, or an increase of 4% compared to 2016.
Branchless Banking
One of CIMB Niaga’s fundamental steps in the banking industry was to create a branch of the future called CIMB Niaga Digital Lounge, which assembles state-of-the-art technology to provide a fast banking experience for retail customers. Each of CIMB Niaga’s Digital Lounges is managed by a Digital Banking Manager, who provides solutions for individual banking customers. The Digital Lounge continues to be a key CIMB Niaga effort to support the strategy of developing Digital Consumer Banking, with the opening 2 new Digital Lounges in big cities Bogor and Surabaya, bringing the total to 22 Digital Lounges.
Other branchless banking concepts call to simplify retail customer transactions and include internet banking CIMB Clicks, mobile banking Go Mobile, “Rekening Ponsel”, Phone Banking 14041, Preferred Phone Banking, OctoPay, and ATM services. CIMB Niaga continues to maintain its performance by becoming one of the leading banks in Indonesia which promotes the concept of branchless banking, as evidenced by the increasing number of branchless banking service transactions each year.
In 2017 from a total of 267 million customer financial transactions, approximately 245 million transactions or 92%, were branchless banking transactions, while the remainder were transactions conducted conventionally in branches. CIMB Niaga is a pioneer in the development of e-channel banking by launching “Rekening Ponsel”
product. Gradually, e-channel based branchless banking transactions are developed to support Bank Indonesia’s financial inclusion program in its effort to expand access to banking and financial services for all of society, including non-banking customers.
With a mobile wallet technology in place, users can enjoy a variety of CIMB Niaga’s services through their own mobile phones, even without having a bank account. The number of “Rekening Ponsel”
users by the end of 2017 grew by 41.9% to 3.1 million from 2.2 million users in 2016. The number of CIMB Clicks users increased by 20.8% to around 1.5 million compared to 1.2 million in the previous year. Total transactions of CIMB Clicks, both financial and non- financial transactions, reached 258 million transactions compared to 199 million transactions in 2016, with transactions volume increasing by 22.2% to Rp99.1 trillion from Rp81.1 trillion in 2016.
The Go Mobile product recorded significant growth in 2017, with an increase in the number of users up by 31.5% to approximately 1.8 million from 1.4 million users in 2016. The average monthly transaction volume amounted to Rp1.1 trillion and transaction volume in 2017 rose by 4.4% to Rp13.8 trillion from Rp13.2 trillion in 2016.
Branchless Banking once again made history in 2017 by re-launching the Go Mobile app in November 2017. In addition to a more modern look, Go Mobile’s banking applications can now be accessed using fingerprints.
The transactions are now much easier and safer with the feature of the one phone-one user ID. There are many promotions that customers can follow by using promo codes. After finishing any transaction, customers can directly share transaction proof via SMS, LINE or Whatsapp without leaving the Go Mobile page.
Various initiatives in digital banking products conducted by CIMB Niaga have been recognized in 2017 through several awards such as:
1. Infobank Banking Service Excellence Awards 2017 for “Best SMS Banking Performance”, “Third Best Performance for Digital Store”, “Second Best Performance for Overall Account Opening Services Via Web/Application”
2. Indonesia Digital Innovation Award 2017, Category:
Bank BUKU 4 – Warta Ekonomi.
POS as a tool to receive transactions by CIMB Niaga grew by 30.5% in 2017, which encouraged the growth of card-based transactions. As one of the major acquiring banks, CIMB Niaga is also appointed by Bank Indonesia as a participant in the pilot project of the National Payment Gateway, where only 7 banks are deemed to have the experience and technical know- how, as well as operational development capabilities.
Thus CIMB Niaga is recognized by regulators as one of the leading banks in terms of electronic banking services.
PLANS FOR 2018
In order to boost the performance of Consumer Banking, CIMB Niaga will continue to implement a sustainable strategy policy with awareness of national economic conditions. In principle, CIMB Niaga, through Consumer Banking is enthusiastic about continuing to contribute towards the development and enhancement of transactional ease in assisting communities in financial issues that, at the same time, foster CIMB Niaga’s performance.
The Consumer Banking business plan in 2018 will remain focused on customer experience as well as collecting customer deposits from savings products that improve CASA. Various initiatives and programs through direct promotion, product bundling and partnerships will be conducted to increase the number of CASA accounts.
The development of both the features and the capabilities of branchless banking, as one channel to support CASA growth, will continue by using branchless banking to perform digital cross-selling. In all, this is expected to provide added value, simplicity and a better customer experience.
In the mortgage business, CIMB Niaga will continue to expand its market share of mortgage loans, through cooperation of joint promotional and joint events in areas of potential with real estate developers. CIMB Niaga will also continue to demonstrate its commitment to enhance competitiveness by prioritizing service quality, process speed and innovative housing financing products in line with the expectations and needs of its customers.