View Full Version : Bank Negara plans star rating for banks

04-01-2003, 10:24 AM
Friday, January 03, 2003

<FONT SIZE="+1">Central bank plans star rating to gauge quality of service</FONT>

KUALA LUMPUR: Banks will be given star ratings to indicate their customer-friendly level and encourage more competitive pricing of their financial products.

The Service Quality Index will also allow banks to identify areas of strength and comparative advantage as well as gaps and areas of weakness.

“We would like to see improvements in the quality of service provided by banks.

<IMG SRC="http://www.thestar.com.my/archives/2003/1/3/nation/p4zeti.JPG" ALIGN="LEFT"> Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz

“We are aiming to achieve world-class service quality in the financial services industry,” Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz told The Star. The quality index will be introduced this year.

Over the last few years, banks, particularly in the Klang Valley, have been continually upgrading their service quality, for example, through the installation of automated tellers and cheque and cash deposit machines.

At larger banks, private and priority banking halls, personal financial centres and even financial spas have been set up to look after special needs of customers at the higher end.

Under the concept of financial powerhouse operating on a more sales-oriented approach, banks are offering a wide range of products and services that enable customers to conveniently “shop under one roof.” Some of the additional services could be insurance, unit trusts and will writing.

...In the recent 12 months, improvements were recorded in areas of productivity, where staff cost per employee and staff cost versus overhead cost have begun to moderate. The average processing time for certain categories of loans has also improved.

Dr Zeti stressed that benchmarking was an important step in building the capacity and capability of domestic banking institutions, which have the advantage over foreign banks in terms of knowledge of local conditions, requirements and branch network.

However, foreign banks have certain advantages in that they come with products off-the-shelf that they can draw from their head office and they have access to technology, management skills and systems.

In certain respects, more intensive efforts were being made to place domestic banking institutions on par with the performance of foreign banks, she added.


04-01-2003, 10:28 AM
Saturday, January 04, 2003

Customers welcome bank rating

PETALING JAYA: Consumers welcomed Bank Negara's proposal to rate banks to indicate how customer-friendly they were but hoped the exercise would actually push banks to further improve their services.

Project planning manager Albern Murty, said it was a good idea to rate banks as there was currently no objective means of measuring how good banks were in servicing customers.

“It will certainly have an influence over my choice of which bank to go to and may even motivate me to change banks,” he added.

He said the rating system should be independent, objective, and properly done.

“It should also give the reason a certain rating is given to a bank. The survey should include every aspect of customer service, including non-counter services such as automated or internet banking,” he added.

Lawyer Chew Yong See said the rating system would be useful if the rating for each individual area of customer service was revealed to the public.

“If all we are going to get is a single letter or star rating, it will not be very useful as different customers will place importance on different areas of customer service,'' he added.

He also felt the rating system should address the “over pampering” of high-end customers with priority or private banking.

Anuar Alawiyah, a company executive, said she would not think twice of moving to a higher rated bank if her existing banks were deemed to be not customer friendly.

“My choice of banks is based on how long I have to wait to be served as well as the number of branches the bank had. Convenience is the main factor,” she added.

Engineer Taufik Abu Talib welcomed the proposal because the system would make banks improve their services, besides giving members of a public a way to choose the best bank.


04-01-2003, 11:22 AM
come off it, don't waste public funds on more white washing. all this rating system is a big humbug. its not going to give consumers what they want.

even if as, "Lawyer Chew Yong See said the rating system would be useful if the rating for each individual area of customer service was revealed to the public. " most banks nowadays have over a hundred branches and the quality of service in each branch is not always the same.

then u also have to define the meaning of service. local banks glorify citibank. some local banks benchmark themselves against citibank. but if i have a say citibank's service if pittance. its rotting into an unbearable stench. in the name of service (albeit in error) over dependence on machines has taken away the warmth of banking and the human relationship btwn banker and customer. try depositing cash at their machines. the q is sometimes 20-30 mins long. and i raised this query to them - what if after lining up for 15 mins the machine in my q hits limit up and cannot accept any more deposits? do i have to q up all over again in another line? my proposal that they implement a simple solution in "single q" has not seen light yet. rather i was told that i could still put my cash into envelopes and drop it into the express cash box (which does not give immediate credit). the limit to the no. of notes which can be processed in each tx is also a hinderance to good service. to deposit rm10k in rm50 notes requires 4 separate tx. there are lots of other reasons why i rate them such but will the proposed rating body concur?

service quality is so very subjective. chew is very absolutely right in raising concern over "the “over pampering” of high-end customers with priority or private banking. " but try maybank's priority banking - i have, with dismay - the wait was worse than the normal customer's q. and eon bank's prestige banking hall - i'm sure many customers would rather the bank share the money spent on building this hall with them in more justifiable ways.

what the banking system needs now more than ever is a review of rules and regulations, maybe harmonising some (eg practice of cancelling lost remittances) and ensure strict compliance and enforcement. why are indemnities still required for lost passbooks and fd certs when modern day digital systems should provide adequate security

please bnm, don't rival once-upon-a-time dbkl's rating of eateries as a, b or c depending on cleanliness. the fact should be if it cannot meet the criteria for a, it must be suspended or closed.

06-02-2003, 07:45 PM
Wednesday, February 05, 2003

<FONT SIZE="+1">Local banks must work at improving their services</FONT>

WHILE the recent mergers may have strengthened the financial position of local banks to face the stiff competition expected from the foreign banks, their standard of customer service leaves much to be desired.

Though it is important that the local institutions should consolidate to protect themselves, the threat from the foreign banks, however, may have been over-rated.

Local banks have been sparring with the foreign competitors for many years now.

While it is true that Malaysian banks were set up in large numbers only after independence in 1957, foreign ones have been around for a long time.

In fact, the foreign banks have been around for much longer than that and at least two of them were in business for almost a hundred years or more, all thanks to the colonial master, Britain.

Actually, it was the Malaysian banks which competed with the foreign banks from Britain or Singapore though of course the latter was considered local at the time.

There were one or two banks that could be considered as local but they were very small ones either in Penang or in East Malaysia.

Local giants such as Maybank and Bank Bumiputra were both established in the 1960s.

So it was really quite strange that Malaysia would need to liberalise its financial services under the World Trade Organisation while so many foreign banks, such as Hong Kong and Shanghai Bank, now known as HSBC, Standard Chartered Bank and Citibank, have been operating here for years.

The presence of these foreign institutions has not dented the expansion and growth of the local ones such as Maybank, which is now the largest bank in the country.

However, the truth is that no matter how much consolidation is done, the local banks can never match the financial might of the global giants with their huge assets and global connections.

Many of the Malaysian banks, with much smaller capital and assets, are not doing too badly even with the presence of the giants in their midst.

If they should fail, it is because of mismanagement and malpractice and not because of foreign competition.

The important thing is for the local banks to be able to stand on their own feet and be transparent in their operations in order to gain the trust and confidence of the locals and foreigners.

This is the best safeguard and protection against foreign competition.

It is only when Malaysians have lost confidence in local banks that they will do business with the foreign ones, which they may perceive as stronger and better managed.


06-02-2003, 07:47 PM
Thursday, February 06, 2003

<FONT SIZE="+1">Local, foreign banks have failed to live up to expectations</FONT>

WHEN it comes to service, both local and foreign banks have failed to live up to expectations.

As far as the customers are concerned, bigger does not mean that they will be better served.

So all the mergers of local banks are of little use if the enlarged units should continue to adopt work ethics prevalent before consolidation.

Many customers feel that some of the smaller banks being absorbed had provided better service.

Bank Negara Malaysia can set the rules to ensure that the banks polish up their act but it is unlikely that this will have the necessary effect and it is really up to each individual bank to satisfy its customers.

It is really difficult for the public to find a good bank to do business with if most of them are not interested in the welfare of their customers.

So changing banks is not going to do any good.

Foreign banks score equally poor marks when it comes to customer service. In fact, they tend to ignore the smaller depositors in preference for larger accounts.

However, many locals still do business with them as such banks are seen to be stronger and so their deposits are better protected.

However, this is an illusion as many giant foreign institutions have failed elsewhere due to over-commitments and mismanagement and have to be rescued or bailed out.

Local banks have also been criticised for their lending policies which favour the bigger companies and individuals and ignoring the smaller ones, especially the small and medium-scale industries.

Even Prime Minister Datuk Seri Dr Mahathir Mohamad, who is also the Finance Minister, and other government leaders have chided them many times for not lending enough to the SMIs, which are in dire need of such financial assistance.

A few banks, which have been lending money to these small and medium-scale industries, have been doing well.

The small businessmen tend to be more responsible in repaying such loans as they realise that unless they do so, they could be forced to close shop.

Based on this, the banks will have fewer problems with bad loans and even if a small percentage of the borrowers failed to live up to their commitments, the impact on the bottom line is not that serious.

Though they have been given targets to meet, not many of them have been able to do so and they would rather pay a fine instead of changing their lending policies.

Banks have often said that they always have their customers in mind whenever they make changes to their operations.

However, such promises have seldom been fulfilled as their customers continue to face difficulties in dealing with the banking staff.


07-02-2003, 09:05 AM
This is the 3rd article in three straight days by VK Chin on consumer banking. I'm impressed.

Friday, February 07, 2003

<FONT SIZE="+1">Educate banks on customer satisfaction</FONT>
Comment by V.K. Chin

BANK Negara Malaysia has provided guidelines to educate the people on their rights as bank consumers. This is of course something very useful as there have been many complaints about the lack of proper service from such financial institutions.

As more people make use of banks to put their money for safekeeping and to earn some income in the form of interest, these financial institutions have become an almost indispensable part of their routine.

However, the attitude of some bank employees has given the impression that they are doing the customers a favour by allowing them to make use of the facilities.

And if the customers should have a complaint to make, it is rather difficult for them to see a supervisor to deal with the problem.

The complainants will usually get the run-around, as it is seldom that a responsible officer is prepared to settle the matter.

Such complaints have prompted the central bank to come up with several rules for the unhappy customers to get some satisfaction and the banks concerned will have to reply to any complaint in two weeks.

While it is appropriate that the central bank is helping to educate the public on their rights as customers, something too must be done to educate the banks on how to deal with their clients.

After all, the public would like to know what are the responsibilities and duties of banks in looking after their customers. Does it mean to say that they do not have any obligation whatsoever?

Perhaps it is easier for Bank Negara to educate 10 banks rather than 10 million of their customers. The guidelines may be well and good but it must be recognised that it is only the better-educated few who are able to make use of this advice.

In fact, the central bank should not be involved in settling problems between the individual bank and its customers. This is for the two parties to sort out their differences.

The onus must be on the banks and they owe it to their unhappy customers to right any wrong or mistake. They cannot hope the problem will disappear by sweeping it under the carpet.

They can ignore the customers because the only recourse seems to be legal action and it will be a very costly affair for the complainants. The banks have panel lawyers to handle all such matters and even if they should lose the case, they could well afford to pay the damages.

Unless the question of better customer service is dealt with, the public will face frustration with any bank, which ignores their legitimate complaints.

If all banks should adopt this attitude, then the customers will be forced to live with this situation. Bank Negara should ensure that things do not reach this critical stage.