Alliance Bank Sets to Accelerate Growth in SME Loans

The Bank is set to double its SME loan in the next five years. For the record, it successfully grew its SME loan market share from 3.4% to 5.0% over the last 5 years.

It will also scale up its consumer banking business by serving business owners’ personal banking needs, growing wealth management and using digital channels to scale up customer acquisition.

In FY2022, the Bank acquired 56,000 new-to-bank customers, an increase of 50% over the previous year.

“This financial year, we plan to increase customer acquisition by 40% year-on-year (YOY) and double our acquisition of business owners with personal and business relationships to 10,000,” said Mr Kornreich, Group Chief Executive Officer of Alliance Bank.

To acquire more customers, the Bank will launch more product and service innovations, expand its sales teams and digital channels, and broaden its reach via strategic partnerships.

“For the SME segment, we will equip our SME sales force with new digital tools, such as the ability to provide our clients with quick approval-in-principle for their loan applications. We also aim to triple our Digital SME loans from RM60 million to RM200 million this year and expand our offerings to include remote business account opening,” added Mr Kornreich.

“In wealth management, we will innovate our digital capabilities to provide our customers with a 360-degree portfolio review and include portfolio simulation capabilities to help improve our relationship managers’ interactions,” added Mr Kornreich.

In FY2022, digital personal loans accounted for almost 33% of total personal loan booking, and the Bank aims to grow its contribution to more than 40% this year. The Bank will also further automate its loan processes internally to improve turnaround time.

The Bank’s digitisation strategy remains key to delivering quick service to its customers.

“We will focus on strengthening our IT capabilities, including modernising our core architecture and strengthening our data analytics to create a better customer experience. We will invest approximately RM50 million each year on digital transformation in the next five years,” explained Mr Kornreich.

To improve efficiency, the Bank will progressively roll out its new branch model.

“Our goal is to achieve zero back office in our branches, supported by enablers such as virtual service counters, and greater automation and centralisation,” added Mr Kornreich.

Meanwhile, the Bank will continue to pursue its sustainability agenda of helping individuals and businesses adopt sustainable lifestyles and practices while reducing its own greenhouse gas emissions. In FY2022, the Bank achieved over RM2 billion in new sustainable banking business.

“We have expanded our target of new sustainable banking business to RM10 billion by FY2025, from RM5 billion previously,” remarked Mr Kornreich.

The Bank is now collaborating with Bursa Malaysia, the Malaysian Green Technology and Climate Change Corporation, and the United Nations Global Compact Malaysia & Brunei to help businesses structure their ESG roadmap to implement sustainable business practices.

Last year, the Bank proactively reached out to all its customers to better understand their financial situation and helped them with a loan modification application or an extension before it expired.

Loans under the Perlindungan Rakyat dan Pemulihan Ekonomi (PEMULIH) programme have reduced to RM6.55 billion, or 14.2% of the Bank’s loan book, as many customers have graduated and resumed repayment. Furthermore, 99% of its customers who have graduated from the PEMULIH programme have resumed full or partial financing repayment.

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