Learning from BCA and Citibank

Jonminofri Nazir, The Jakarta Post, Contributor, Jakarta

What advertisements have stood-out in Indonesia's newspapers this past year? Among others, they are advertisements for banks and their wide range of products. Such advertisements, usually full color and one page in size, were attractively created.

The giant-size advertisements appeared every time the bank's launched a new product or a new service. Every bank seemed to be doing the same thing. The only difference was the timing of the campaign. For example, when Bank Mandiri was in the midst of a major campaign, the other banks would lie low for a while. When one bank had completed its blitz, another came along with another campaign of a similar size, along with promotional activities at the malls and other relevant activities.

What do they want to acquire? Obviously to increase their share of the market. For example, in the case of Citibank, which was anxious about the stagnant number of credit card holders in Indonesia, it created several products to increase its share of the pie. This was what Th Wiryawan at Citibank did.

Compared with other banks, Citibank's campaign contained quite a number of new aspects.

First, Citibank created a credit card without a plastic card and called it a "refillable loan" - a term easily understood by everyone. Their clients would easily comprehend the product's function by associating it with a feature of cellular phones: a refill voucher.

This product made it possible for Citibank to increase the number of cardholders, because comparably it had fewer and easier prerequisites, such as an employer's reference, salary slip and so forth, which private business people or civil servants could not make available.

Second, Citibank embarked on a major campaign in leading print media and television stations to educate the public on the use of credit cards. The objective was to change the public's payment habit of using cash to using credit cards. The positive impact of these programs for other banks was that they become "free riders" as they do not have to campaign on the same theme, just advertise their products.

However before starting a major campaign, one has to observe how the banking industry goes about it, especially from the aspects of human resources and product development. One has to be aware that banking products basically comprise savings, deposits and credit. The rest are variations on the same theme.

Observing today's condition, one of the keys of a successful campaign lies in the hands of skilled people. Previously, skilled bankers were produced by Citibank. Most of the young bankers, who reached the vice president level, decided to leave this bank because that was the highest rung of the career ladder ever to be achieved by local staff. New banks and local banks then vied for these former vice presidents to further develop their products and manage their banks. The end result was not disappointing, the Indonesian banking industry had seen the rapid growth of numerous banks along with their wide-range of products.

Today the situation has changed. The school for bankers is now BCA, a bank with the highest number of clients in Indonesia. Even the high-ranking executives at Citibank come from BCA. Bank Mandiri also recruits BCA's senior managers to handle its customer banking.

The question is why BCA? Some of the reasons proven by the bank creating major news about its divestment programs are: expertise in creating consumer banking products, educating the public, acquiring their trust and the excellent advertisement campaigns. The banking industry should actually be grateful to BCA as it has made the public feel safe in using debit cards for payments, withdrawing cash at supermarket cashiers as well as phone banking - though for this last item BCA was not the pioneer.

It means that when a bank wishes to develop a consumer banking product, it would be easier to head-hunt an experienced manager from BCA than start at the beginning or to gamble with a new manager.

In the years to come it seems that more BCA executives will be recruited by other banks. In a way, this situation is beneficial to every party concerned, including BCA, as they have a well coordinated promotion system, so that the vacant positions can be easily filled by their employees working their way up. The head- hunting banks, on the other hand, also obviously enjoy the other benefits of not having to educate their employees to reach such a high standard.

Therefore, nowadays one can easily forecast the products and strategies of any bank which enters and focuses on consumer banking. It will be more or less similar to BCA's.

Citibank's refillable loan is an extraordinary banking product in Indonesia as a new product generally goes through a lengthy process, such as research and surveys, before being launched onto the market. Yet, this product developed by such a foreign bank was an overnight success.

One can consider this success an advantage of foreign banks because any of their products that have succeeded in overseas markets can be introduced in Indonesia with modifications to suit the local culture and conditions.

Citibank generally implements this method here to ensure that the risk factor of its new products is minimized.

In the past year or two, Citibank has brought in many products and programs, for example Easy Pay and products offering various prizes such as VW Beetles.

BCA and other banks in Indonesia do it quite differently, giving the impression of extra caution. It may take at least four years for a domestic bank to launch a product.

Take for example, BCA-ProXL Phone Banking. The launching of this product was delayed for more than a year from its original schedule. BCA also spent four years just to introduce its product for buying train tickets via ATM.

Other banks have a greater advantage if they develop products similar to those of Citibank or BCA as they could easily adapt or modify these products to ensure that they are different from existing products, like those already introduced by the two banks.

Much more, it would be easier for the other banks if they recruit experts from, for instance, BCA and Citibank, to develop products.

Promoting a sophisticated product should be a simple matter. Ads in major newspapers, television and radio stations as well as exhibitions are common promotional practices.

BCA has used the same method to introduce all of its banking products, including BCA passport, Internet banking, phone banking, etc. The sequence of its campaigning pattern is more or less as follows: after going through lengthy trials to ensure product acceptability, BCA announces it to the public via the Gebyar BCA program on Indosiar, places advertisements in several print media, stages seminars in several cities, holds talk shows on radio stations, etc.

BCA's method has proved effective. Perhaps it explains why other banks are interested in hiring its executives.

Many mass communications experts have been hired to devise programs and implement them. However, it is a bank's strategy to reduce its advertising costs that makes all the difference.