Learning from BCA and Citibank<\/p>\n
Jonminofri Nazir, The Jakarta Post, Contributor, Jakarta<\/p>\n
What advertisements have stood-out in Indonesia's newspapers
\nthis past year? Among others, they are advertisements for banks
\nand their wide range of products. Such advertisements, usually
\nfull color and one page in size, were attractively created.<\/p>\n
The giant-size advertisements appeared every time the bank's
\nlaunched a new product or a new service. Every bank seemed to be
\ndoing the same thing. The only difference was the timing of the
\ncampaign. For example, when Bank Mandiri was in the midst of a
\nmajor campaign, the other banks would lie low for a while. When
\none bank had completed its blitz, another came along with another
\ncampaign of a similar size, along with promotional activities at
\nthe malls and other relevant activities.<\/p>\n
What do they want to acquire? Obviously to increase their
\nshare of the market. For example, in the case of Citibank, which
\nwas anxious about the stagnant number of credit card holders in
\nIndonesia, it created several products to increase its share of
\nthe pie. This was what Th Wiryawan at Citibank did.<\/p>\n
Compared with other banks, Citibank's campaign contained quite
\na number of new aspects.<\/p>\n
First, Citibank created a credit card without a plastic card
\nand called it a \"refillable loan\" - a term easily understood by
\neveryone. Their clients would easily comprehend the product's
\nfunction by associating it with a feature of cellular phones: a
\nrefill voucher.<\/p>\n
This product made it possible for Citibank to increase the
\nnumber of cardholders, because comparably it had fewer and easier
\nprerequisites, such as an employer's reference, salary slip and
\nso forth, which private business people or civil servants could
\nnot make available.<\/p>\n
Second, Citibank embarked on a major campaign in leading print
\nmedia and television stations to educate the public on the use of
\ncredit cards. The objective was to change the public's payment
\nhabit of using cash to using credit cards. The positive impact of
\nthese programs for other banks was that they become \"free riders\"
\nas they do not have to campaign on the same theme, just advertise
\ntheir products.<\/p>\n
However before starting a major campaign, one has to observe
\nhow the banking industry goes about it, especially from the
\naspects of human resources and product development. One has to be
\naware that banking products basically comprise savings, deposits
\nand credit. The rest are variations on the same theme.<\/p>\n
Observing today's condition, one of the keys of a successful
\ncampaign lies in the hands of skilled people. Previously, skilled
\nbankers were produced by Citibank. Most of the young bankers, who
\nreached the vice president level, decided to leave this bank
\nbecause that was the highest rung of the career ladder ever to be
\nachieved by local staff. New banks and local banks then vied for
\nthese former vice presidents to further develop their products
\nand manage their banks. The end result was not disappointing, the
\nIndonesian banking industry had seen the rapid growth of numerous
\nbanks along with their wide-range of products.<\/p>\n
Today the situation has changed. The school for bankers is now
\nBCA, a bank with the highest number of clients in Indonesia. Even
\nthe high-ranking executives at Citibank come from BCA. Bank
\nMandiri also recruits BCA's senior managers to handle its
\ncustomer banking.<\/p>\n
The question is why BCA? Some of the reasons proven by the
\nbank creating major news about its divestment programs are:
\nexpertise in creating consumer banking products, educating the
\npublic, acquiring their trust and the excellent advertisement
\ncampaigns. The banking industry should actually be grateful to
\nBCA as it has made the public feel safe in using debit cards for
\npayments, withdrawing cash at supermarket cashiers as well as
\nphone banking - though for this last item BCA was not the
\npioneer.<\/p>\n
It means that when a bank wishes to develop a consumer banking
\nproduct, it would be easier to head-hunt an experienced manager
\nfrom BCA than start at the beginning or to gamble with a new
\nmanager.<\/p>\n
In the years to come it seems that more BCA executives will be
\nrecruited by other banks. In a way, this situation is beneficial
\nto every party concerned, including BCA, as they have a well
\ncoordinated promotion system, so that the vacant positions can be
\neasily filled by their employees working their way up. The head-
\nhunting banks, on the other hand, also obviously enjoy the other
\nbenefits of not having to educate their employees to reach such a
\nhigh standard.<\/p>\n
Therefore, nowadays one can easily forecast the products and
\nstrategies of any bank which enters and focuses on consumer
\nbanking. It will be more or less similar to BCA's.<\/p>\n
Citibank's refillable loan is an extraordinary banking product
\nin Indonesia as a new product generally goes through a lengthy
\nprocess, such as research and surveys, before being launched onto
\nthe market. Yet, this product developed by such a foreign bank
\nwas an overnight success.<\/p>\n
One can consider this success an advantage of foreign banks
\nbecause any of their products that have succeeded in overseas
\nmarkets can be introduced in Indonesia with modifications to suit
\nthe local culture and conditions.<\/p>\n
Citibank generally implements this method here to ensure that
\nthe risk factor of its new products is minimized.<\/p>\n
In the past year or two, Citibank has brought in many products
\nand programs, for example Easy Pay and products offering various
\nprizes such as VW Beetles.<\/p>\n
BCA and other banks in Indonesia do it quite differently,
\ngiving the impression of extra caution. It may take at least four
\nyears for a domestic bank to launch a product.<\/p>\n
Take for example, BCA-ProXL Phone Banking. The launching of
\nthis product was delayed for more than a year from its original
\nschedule. BCA also spent four years just to introduce its product
\nfor buying train tickets via ATM.<\/p>\n
Other banks have a greater advantage if they develop products
\nsimilar to those of Citibank or BCA as they could easily adapt or
\nmodify these products to ensure that they are different from
\nexisting products, like those already introduced by the two
\nbanks.<\/p>\n
Much more, it would be easier for the other banks if they
\nrecruit experts from, for instance, BCA and Citibank, to develop
\nproducts.<\/p>\n
Promoting a sophisticated product should be a simple matter.
\nAds in major newspapers, television and radio stations as well as
\nexhibitions are common promotional practices.<\/p>\n
BCA has used the same method to introduce all of its banking
\nproducts, including BCA passport, Internet banking, phone
\nbanking, etc. The sequence of its campaigning pattern is more or
\nless as follows: after going through lengthy trials to ensure
\nproduct acceptability, BCA announces it to the public via the
\nGebyar BCA program on Indosiar, places advertisements in several
\nprint media, stages seminars in several cities, holds talk shows
\non radio stations, etc.<\/p>\n
BCA's method has proved effective. Perhaps it explains why
\nother banks are interested in hiring its executives.<\/p>\n
Many mass communications experts have been hired to devise
\nprograms and implement them. However, it is a bank's strategy to
\nreduce its advertising costs that makes all the difference.<\/p>",
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