SME & Commercial Banking Case Study
Alliance Bank's Small and Medium Enterprise (SME) business was already a major contributor to profits when Fullerton Financial Holdings invested in the Bank, but it faced increasingly stiff competition and challenges in sustaining revenue momentum.
Together with Fullerton Financial Holdings, the Bank undertook a number of strategic initiatives to propel the SME Banking business forward. The transformation journey was initially focused on laying a stronger foundation by re-engineering sales, back office, credit and underwriting processes. Having strengthened these capabilities, the Bank subsequently leveraged product innovation, advanced data analytics and technology enablers to "raise the game" and further differentiate itself against the competition. These changes helped solidify Alliance Bank’s position as a leading player in the Malaysian SME segment, culminating in the acclamation as the "Best SME Bank in Asia Pacific, Gulf Region and Africa" in 2013 by The Asian Banker.
"Fullerton Financial Holdings was able to bring to bear pragmatic solutions and best practices, coupled with execution rigour, to help Alliance Bank focus on the key business model changes that would deliver the most impact", according to Mr Steve Miller, Head of Group Business Banking.
Implementation of a State-of-the-Art Program Lending Model
An important element of Alliance Bank’s SME business transformation was the implementation of a state-of-the-art program lending model to manage large numbers of SME customers in a low-cost manner. Fullerton Financial Holdings also worked with the Bank to instil proactive risk management and monitoring, using analytics to identify early risk triggers.
Enhancing the SME Banking Sales and Service Model
The SME Banking sales and service model was also enhanced, with the introduction of hunter teams to sharpen its new-to-bank acquisition focus, while leveraging relationship managers, who work closely with product specialists, to deepen share of wallet with existing customers.
Leveraging Product Innovation and Differentiated Solutions
The Bank also focused on developing banking solutions aligned to different business life-stages, and relentlessly pursued product innovation to tap into ‘white spaces’ that its competitors had overlooked. Alliance Bank became the first Malaysian bank to offer advanced online business cash management tools to sole proprietors.
Now a Leading SME Banking Business
On top of the industry-wide recognition, the successful outcome of the SME business transformation is further evidenced by strong double-digit loans growth in this segment over the past 3 years, while maintaining one of the lowest NPL rates in the industry. The Bank now captures up to 25% market share of start-up businesses in Malaysia. In addition, Alliance Bank consistently achieves top quartile customer satisfaction scores, where over 80% of its SME customers would positively recommend the Bank to other businesses.