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7/31/2019 Marketingoffinancialservices Uum
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STRICTLY PRIVATE & CONFIDENTIAL
BANK ISLAMs PERSPECTIVEBANK ISLAMs PERSPECTIVE
Practitioner Talk UUM City Campus
10 March 2012
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Page 1
]25-28:[
O my Lord! expand me my breast; Ease my task for me; And remove the impediment from my speech,
So they may understand what I say
[20:25-28]
Rabbish rahli sadri wa yas-sir li amri wahloul uqdatam mil-lisaani yafqahu qawli
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PRESENTATION OUTLINEPRESENTATION OUTLINE
A Snapshot of Bank Islam
About M
Marketing of Financial Services
Islamic Finance
Page 2
Corporate Branding
Marketing Mix - Bank Islams Perspective
Gen Y
Wrap Up
Q & A Session
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A SNAPSHOT OF BANK ISLAMA SNAPSHOT OF BANK ISLAM
Malaysias Pioneer Islamic Bank 1983
3rd Largest Islamic Bank in Malaysia
Total Assets of about RM32 billion
Total customer base of more than 3.5 mil.
Best Islamic Bank in Malaysia 2011 IFN Award
Page 3
Rated A1/P1 with stable outlook by Rating Agency Malaysia
Rated 4th Strongest Bank in Malaysia by The Asian Banker (Part of Financial Times Group)
Ranked 53 Asia Pacific 500 Strongest Bank by The Asian Banker
Since its inception in 1983, Bank Islam has not only become the symbol of Islamic banking in
Malaysia, it has also played an integral role in setting the stage for a robust growth of the
countrys Islamic financial services industry
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KEY OFFERINGSKEY OFFERINGS
Term Financing Trade Financing
Syndication Facility
Debt Capital Market
Corporate Finance & Advisory (i.e.IPOs, M&A, etc)
Cradle to Grave Personal Financing (Profit Rate from3.5% and based on tenure financing)
House Financing (Profit Rate : BFR- CR%,FTV of about 80%)
Vehicle Financing (Profit Rate up to3.3% )
Bank Islam Card (Debit & Credit)
Deposit Products (CA, SA, Al Awfar)
Wealth Management (BancaTakaful,Will Writing, StructuredInvestment, Unit Trusts, etc.)
ConsumerBanking
CorporateInvestment
Banking
Page 4
Principal Dealer Islamic PDS
Corporate Deposits (GIA, SIA,Wakalah Deposit, Commodity
Murabahah Deposits, NIDCs) Forex (FX Spot, Islamic FX Forward)
Hedging Solutions (Wiqa ProfitRate Swap, Wiqa Forward RateAgreement, Islamic Options .
Business Premises Financing
Emerging Local Corporate
Contract Financing
SME/I Financing
Bureau de Change
TreasuryCommercial
Banking
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ABOUT MABOUT M
Responsible for corporate transformation, corporate finance, capital andstrategic planning of Bank Islam. Brand Ambassador for Corporate
Rebranding exercise in 2007.
Former Special Assistant to the Managing Director and Corporate Finance
Specialist of Pengurusan Danaharta Nasional Berhad. Previously served asDirector, Corporate Services of Bank Simpanan Nasional, managing 5 core
departments, namely Corporate Planning, Corporate Affairs &
Communications, Organization & Methods, Legal & Compliance).
Page 5
Over 15 years of experience in corporate finance. Structured and executednumerous merger & acquisition deals, international ventures, business
advisory, privatization, corporate and debt restructuring, and structured
finance.
Instrumental in setting up of Prudential-BSN Takaful Bhd Project Director.
Not a Subject Matter Expert
some of the presentation materials are taken from public domain
i.e. Wikipedia and publicly available presentation material
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STRATEGIC PLANNING & MARKETING @ BANK ISLAMSTRATEGIC PLANNING & MARKETING @ BANK ISLAM
Page 6
formulates corporate and business direction, involves in capital allocation,
risk appetite and biz planning
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MARKETING OF FINANCIAL SERVICESMARKETING OF FINANCIAL SERVICES
Page 7
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MARKETING OF FINANCIAL SERVICESMARKETING OF FINANCIAL SERVICES
The marketing of financial services is a unique and highly specialized (may require product
knowledge, industry benchmarking, and product risk)
The practice of advertising, promoting, and selling financial products and services is in many
ways far more complex ( intangible and take into consideration product sophistication,
brand equity & past experience )
The environment in which financial services are marketed is becoming more competitive
(homogenous or commodity )
Page 8
Unexciting nature of financial services makes the task of attracting consumer attention andinspiring consumer desire a difficult one (but more fascinating as it require creative
marketing approach)
There are many predictable behaviors that consumers often exhibit in dealings with
financial services providers. The predictability of these behaviors and the abundance of dataon existing and potential customers enable a uniquely scientific approach to developing and
executing successful strategies for the marketing of financial services, much more so than in
other markets ( data mining based on customers profile and behavior)
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MARKET ENVIRONMENTMARKET ENVIRONMENT
Competitive intensity irrational market
Changing market & regulatory environment - Stringent regulationsemphasize on
customer protection. & market liberalization
Industry consolidation and concentration inorganic growth via M & A (Hong Leong Bankacquired EON Bank quantum leap of hire purchase segment)
Emergence ofnew entrants in the market space (i.e. 2004, Volswagens Home Equity Loan,
-
Page 9
,
insurance agents were primarily providers of a pre-defined set of insurance products,todays agents are equipped to sell their clients products related to investments, time
deposits, retirement planning, and other services traditionally provided by bankers, and
emergence of alternative financial providers such as AEON Credits, Courts Mammoth, etc)
Fragmented customer base
Customer trust - Distrust affects resulting global financial 2008/2009 i.e. Lehman Brothers
structured investment & derivatives products and etc
Rapid technological change change in marketing strategies i.e. online, social media & etc
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COMPETITIVE LANDSCAPECOMPETITIVE LANDSCAPE
Page 10
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UNIQUE ASPECTS OF FINANCIAL SERVICESUNIQUE ASPECTS OF FINANCIAL SERVICES
Brands & Loyalty Banking is about TRUST. Customer defection rates are significantly lower
than they are in most other markets. The tendency of customers to remain with their
current financial services provider has traditionally been quite strong. Even with the
knowledge of competing offers, a customer may still choose to remain with the current
financial services provider once considering the possible inconveniences associated withswitching.
Product Holding Theory Minimum of 3 products.
Channel delivery & convenience
Page 11
y g
Awards & Recognition
Subjective Perceptions of Quality Emotional aspect based on customer experience i.e.
corporate responsible, green banking, ethical banking, etc.
Price Complexity Risk base pricing
Market Clustering - Consumers needs for financial services vary significantly from one
customer to the other. Malaysian experience might not be applicable in Indonesia or the
Middle East
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MYTHMYTH
Myth 1 The larger the range of products,
the more customer-centric I am.
Myth 2 Better technology (read CRM)
leads to better customer service
Myth 3 Launch a product and thecustomer will start using instantly
Myth 4 The only way to get a customer is
from competition
The range of products has emerged from
being competition-centric
Technology alone does not deliver, but
require a human touch
Customer need to be educated. Marketing isto engage our customers
Demand can be created Think outside the
box - Blue Ocean Strategy
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Myth 5 Just advertise and - You will sell.
Myth 6 No difference between marketing
& selling
Myth 7 In the absence of relationships,
trust builds financial brand
Advertising will only sell, BUT not to retain
Selling focuses on the need of seller whilst
Marketing is based on the need of buyer
Trust is not a differentiator BUT is the very
minimum that the customer expect
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ISLAMIC FINANCEISLAMIC FINANCE
Page 13
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Bahrain
Dubai Malaysia
Saudi
Arabia
London
Hong Kong
TokyoCalifornia
Pakistan
France
Hong Kong
Aims to become an Islamic finance hub
Hang Seng Islamic China Index Fund in2007
Shariah Advisory Council formed
UK Govt sets an objective to entrench London as a globalgateway for Islamic finance
5 FSA-approved Islamic banks and 2 Takaful operators
Japan
New law allowing banks tooffer Islamic finance
France
ISLAMIC FINANCIAL LANDSCAPEISLAMIC FINANCIAL LANDSCAPE -- MOVING INTO UNCHARTEREDMOVING INTO UNCHARTERED
TERRRITORIESTERRRITORIES
Page 14
Singapore
Australia
u an
rapid expansion is reflected in more than 600 Islamic financial institutions operating in morethan 75 countries, even beyond so-called Muslim nations. Total assets > USD1trillion
Indonesia
Australia
Islamic co-operative finance& mortgage established
Consider to establish Islamic
bank
Dubai, UAE
Fast emerging as a financial centre throughDIFCs aggressive promotion efforts
Passed rules/regulations to support
Islamic finance activities
Considering licensing first Islamicbank
Singapore
Established first Islamic bank
Introduced tax neutrality for
Islamic finance
Aspiring to be centre for Islamicfinance
Issued sukuk
Brunei
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WHAT IS ISLAMIC FINANCE?WHAT IS ISLAMIC FINANCE?
The term Islamic Financial System is relatively young, appearing only in mid-1980s
Earlier reference to commercial activities conforming to Islamic principles were made to
interest free banking. However, this does not give a true picture as a whole.
Undoubtedly, prohibiting the receipt and payment of interest is the nucleus of the system, but
it is supported by other principles of Islamic doctrine such as advocating risk sharing,
individuals rights and duties, property rights and the sanctity of contracts.
Similarly, the Islamic financial system is not limited to banking but covers venture capital,
Page 15
a a u s am c nsurance , cap a mar e s, r a nu s am c pawn- ro ng an a ypes o
financial intermediation.
While the conventional financial system focuses primarily on the economic and financial
aspects of transactions, the Islamic systems places equal emphasis on the ethical, moral, social,
and religious dimensions, to enhance equality and fairness for the good of society as whole.
The system can be fully appreciated in the context of Islamic teachings on the work ethic,
wealth distribution, social and economic justice, and the role of the state. The system promotes
entrepreneurship, discourages speculative behavior and emphasizes the sanctity of contracts.
At Bank Islam, we referred this as Shariah-based banking.
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BASIC TENETS & PRINCIPLES OF ISLAMIC FINANCEBASIC TENETS & PRINCIPLES OF ISLAMIC FINANCE
Prohibition of interest (riba). Prohibition of riba a term literally an excess andinterpretedas any unjustifiable increase of capital whether in loans or sales
Money as potential capital. Money is not a commodity, but a medium of exchange, a store
value and a unit of measurement. Money represents purchasing power and cannot be utilised
to increase the purchasing power without any productive activity. Islamic finance advocates
the creation of wealth through trade and commerce.
Risk sharing. Because interest is prohibited, suppliers of funds become investors, rather than
creditors.
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Prohibition of speculative behaviour. Islamic finance discourages hoarding and prohibitstransactions featuring extreme uncertainties (gharar), and gambling (maysir).
Sanctity of contracts. Islamic finance upholds contractual obligations and the disclosure of
information as a sacred duty. This feature is intended to reduce the risk of asymmetric
information and moral hazard.
Shariah approved activities. Only those business activities that do not violate the rules of the
Shariah qualify for investment. For example, any investment in a business dealing with
alcohol or gambling is prohibited.
Social justice. Any transaction leading to injustice and exploitation is prohibited.
Source: IFGFS
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CHARACTERISTIC OF AN ISLAMIC BANKCHARACTERISTIC OF AN ISLAMIC BANK
Free from Riba(Usury)
Free from Riba(Usury)
Free from Gharar(Ambiguity)
Free from Gharar(Ambiguity)
ProhibitsGamblingActivities
ProhibitsGamblingActivities
Free frommanipulation
Free frommanipulation
Freedom toContract
Freedom toContract
Page 17
Free from Dharar(Detrimental)
Free from Dharar(Detrimental)
Promote PublicInterest
(Maslahah)
Promote PublicInterest
(Maslahah)
PromoteEquity
PromoteEquity
Entitlement toEqual, Adequate,
Accurate Info.
Entitlement toEqual, Adequate,
Accurate Info.
A system groundedon moral and ethicsA system groundedon moral and ethics
Entitlement toTransaction at Fair
Price
Entitlement toTransaction at Fair
Price
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A BIT ABOUT RIBAA BIT ABOUT RIBA
Riba or usury or interest is forbidden in Islamic economic jurisprudence fiqh and
considered as a major sin. Simply, unjust gains in trade or business, generally through
exploitation.
There are two types of riba discussed by Islamic jurists: an increase in capital without anyservices provided and risk taking, which is prohibited and clearly stated in the Quran, and
commodity exchanges in unequal quantities, prohibited in the Sunnah.
Page 18
Riba is forbidden not only in Islam but by all Abrahamic Religions i.e. in Christianity and Jews
The Qur'an states:
3:130 O you who have believed, do not consume usury, doubled and multiplied, but fear
Allah that you may be successful.
promotion of Islamic finance is mandatory marketing obligation
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WAR AGAINST RIBAWAR AGAINST RIBA
2:275 (Al-Baqarah) - Allah has permitted trade and has forbidden interest
Prophet Mohammad S.A.W. said in his farewell sermon: "God has forbidden you to take Riba,
therefore all riba obligation shall henceforth be waived. Your capital, however, is yours to
keep. You will neither inflict nor suffer inequity. God has judged that there shall be no riba and
that all the riba due to `Abbas ibn `Abd al Muttalib shall henceforth be waived.".
Page 19
The Qur'an mentions that the person who deals with riba ( ) will stand (on judgement day) as
one who is beaten by Satan into insanity. Here, Qur'an makes it clear that "trade" and "riba"
are not the same and that God forbade "riba" and allowed "trade. It further states that
whoever accepts the guidance of God must immediately stop dealing in riba, and those who
return to riba after God's guidance has reached are dwellers in fire because God destroys
"riba" and will reward those who give to charity.
The crimes of dealing in riba are so serious that God has declared war against those who deal
in it. Prophet Mohammad has cursed anyone who deals with riba, the one who takes it, the
one who pays it and the one who records it, as their sins are considered equal under the
Quran welcome to Islamic banking
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TRANSFORMATION OF THE ISLAMIC FINANCIAL LANDSCAPETRANSFORMATION OF THE ISLAMIC FINANCIAL LANDSCAPE
Bankin for
Page 20
Muslims
repositioning of the brand identitygrowing recognition that the inherent tenets of Islamic finance are aligned tosustainable dimensions of ethical banking and responsible financing.
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IslamicFinancing
IslamicDeposits
Takaful
IslamicEquities (unittrust, indexfunds etc.)
IslamicWealth
Investment
ISLAMIC FINANCE PRODUCTS & SERVICESISLAMIC FINANCE PRODUCTS & SERVICES
Page 21
IslamicPrivateEquity
Sukuk
TreasuryServices
Real Estates(I-REITs)
IslamicETFs
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WHY CHOOSE ISLAMIC BANKING OFFERINGS?WHY CHOOSE ISLAMIC BANKING OFFERINGS?
20% discount on StampDuty for FinancingDocumentations
Ceiling Rate
(Maximum profit ratebased on BNM Guidelines)
Special Incentives for Sukuk
& Capital Market Products
Selling Value Proposition
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Offerings(Ethical/Responsible
Banking)
Transparency
Diversity of Players &Continuous Awareness
Broad Array ofInnovative Products
Lower Penalty Rate
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COMPETING SUCESSFULLY IN ISLAMIC BANKINGCOMPETING SUCESSFULLY IN ISLAMIC BANKING
Product Development & Innovation
(includes competitive pricing,
structure)
Distribution Channel
(effective and cost efficient delivery
channel)
Page 23
Operational Excellence
(includes documentation, turn-around
time, cost efficiency and productivity)
Service Excellence
(customer experience and satisfaction)
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CORPORATE BRANDINGCORPORATE BRANDING
Page 24
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CORPORATE REBRANDINGCORPORATE REBRANDING KEY MESSAGESKEY MESSAGES
Corporate Rebranding is not only limited to change our
physical appearance i.e. logo, signage & branch model
BUT more importantly is the change in our mindset &
working culture i.e. to become more professional,
knowledgeable, innovative and customer centric as
Page 2525
We need to have a new strategy and approach in the way we do business. Wehave to find our niche market. We should bank on our own strengths andcapitalize them and be more focusedon a total solution in the overall
turnaround plan
Dato Sri Zukri Samat
Bank Islam Malaysia Berhad - 2007
Islamic teachings
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REJUVENATE BANK ISLAM BRANDREJUVENATE BANK ISLAM BRAND
Page 26 26
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Negative
Often says Itll never work
Has a we versus them
mindset
Influencers within the
organisation
Believes in branding
Has a positive and can do
Indifferent towards the change
and brand building
Skeptics Fence-sitters Champions
OUR JOURNEYOUR JOURNEY
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Does not believe in brand
building
Does not see customer
experience related to the
brand
Can exert negative influence
Resistant to change
Prefer the status quo
attitude
Able to motivate and convert
mindset of Skeptics and
Fence-sitters
Agents of change
Views the customer
experience and other key
ouch points as part of
branding process
Whatever goes-lah! Does not want to take
Responsibility
Rather be passenger than
driver
Can be influenced
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BRAND ESSENCEBRAND ESSENCE
An Islamic bankyou can believe in
BRAND PROMISE
BRAND ESSENCE ABSOLUTE
FAITH
Page 28 28
Bank Islam
100% Shariah based products &
services
,
fair Islamic banking system
BRAND
FUNCTIONAL BRAND
ATTRIBUTE
BRAND BENEFIT
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THE STRATEGIC BRAND POSITIONINGTHE STRATEGIC BRAND POSITIONING
Bank Islam inspires faith in its stakeholders and
exceeds their needs and wants, through itscommitment to total Shariah based policies,
principles and practice.
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CORE BRANDCORE BRAND VALUESVALUES
LEADERLEADEROur Islamic products are the benchmark. Reputed as the pioneer in Islamic banking. Built
the Islamic banking industry in Malaysia
DYNAMICDYNAMICProgressive and innovative - constantly moving ahead, technologically advanced, withnew products & services
Page 30
Fast, efficient and responsive service. Knowledgeable and equipped staff to handle globalbusiness challenges
CARINGCARING
A supportive partner who is approachable, ever ready to provide solutions to yourfinancial problems
TRUSTWORTHYTRUSTWORTHY100% Shariah-based products, services and principles
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THE CORE BRANDTHE CORE BRAND VALUESVALUES -- WHATWHAT DO THEY MEAN?DO THEY MEAN?
Our Islamic financial products are the benchmark
We are the undisputed pioneer in Islamic bankingWe built the Islamic banking market
LEADER
Page 3131
s eman s a we a e e ea n every ng we o.
Leaders stay ahead of the pack, innovate, take the offensiveand are not afraid to do so
This leadership behavior could be from the way we approach
our clients, to product development, to our dealings withexternal stakeholders, including regulators, etc.
We lay down the path for others to follow
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DYNAMIC
This is defined as being progressive and innovative - constantly moving
ahead.
We have to move in the direction of becoming technologically
advanced.
THE CORE BRANDTHE CORE BRAND VALUESVALUES -- WHATWHAT DO THEY MEANDO THEY MEAN?..cont?..cont
Page 3232
,
products & services
This demands that we innovate in the way we do things. Outside-the-
box thinking is expected. We welcome new technology and methods.
We embrace change and forward movement as a way of life. Our
customers must see, feel and benefit from this dynamism
Together we grow
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PROFESSIONAL
By definition it is providing fast, efficient, responsive
service.
We have to be knowledgeable and equipped to handle
global business challenges
THE CORE BRANDTHE CORE BRAND VALUESVALUES -- WHATWHAT DO THEY MEANDO THEY MEAN?..cont?..cont
Page 3333
Our consumer banking customers demand a new paradigmin our service delivery, speed, efficiency and
responsiveness; e.g. in a simple touch point like answering
of the general phone line, faster counter transactions.
Business banking customers demand knowledge and skillsfor us to meet their global business needs
Your gateway to Islamic Banking
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CARING
This is defined as being a supportive partner who is
approachable. Approachable here means staff listen to
requests, problems and complaints non-defensively.
The attitude of our stafffacilitates the solving of customer
roblems
THE CORE BRANDTHE CORE BRAND VALUESVALUES -- WHATWHAT DO THEY MEANDO THEY MEAN?..cont?..cont
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Our call centers should have the ready answers and
solutions to reasonable requests.
Front line staff do the extra bit to ensure customers have a
more pleasant experience each time they have contact withthem
Giving Back to Society
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TRUSTWORTHY
By definition Bank Islam has a strong record of100% Shariah
based products, services and principles.
Customers do not have any doubts about Shariah compliance
Trustworthiness also demands that at all customer touch oints,
THE CORE BRANDTHE CORE BRAND VALUESVALUES -- WHATWHAT DO THEY MEANDO THEY MEAN?..cont?..cont
Page 3535
front line staff with customer contact, can be trusted to Do whatthey say they will do.
This means responding to customer requests in the shortest
possible time. On a macro level, this trust has to be earned by an
impeccable performance/profit record
Trust is essential, it is Amanah,
the first step towards a fruitful relationship
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NEW & REMODELLED BRANCHESNEW & REMODELLED BRANCHES
Putra Heights, SelangorKota Damansara, Selangor Alor Setar II, KedahPutra Square, Pahang
Page 36
Batu Pahat, Johor
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NEW PRODUCT OFFERINGS & STRATEGIC PARTNERSHIPNEW PRODUCT OFFERINGS & STRATEGIC PARTNERSHIP
Page 37
DRIVERS FOR CUSTOMER SATISFACTIONDRIVERS FOR CUSTOMER SATISFACTION
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DRIVERS FOR CUSTOMERs SATISFACTIONDRIVERS FOR CUSTOMERs SATISFACTION
The core product or service offered
Support services and systems
Page 38
Interaction with the Bank and it employee
The emotional connection with customers
BUILDING STRENGTHS TO STRENGTHSBUILDING STRENGTHS TO STRENGTHS
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BUILDING STRENGTHS TO STRENGTHSBUILDING STRENGTHS TO STRENGTHS
Page 39
DRIVING CUSTOMER LOYALTY & NET PROMOTERDRIVING CUSTOMER LOYALTY & NET PROMOTER
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DRIVING CUSTOMER LOYALTY & NET PROMOTERDRIVING CUSTOMER LOYALTY & NET PROMOTER
Convenience
(Account security &reliability, timely
statements)
Branch
( Locations, Quantity,Weekend Banking, WaitTime in Line, Cleanliness
& Atmosphere)
Online Banking
(User friendly of mobilebanking & internet
banking)
ATMs/ SSTs
(Locations, Security, Ease Brand Reputation Emotional
Page 40
of Use, Features/Service
Offered, Internationalconnection)
(Reliability & Recognition)
(Conviction, Purity, Better
than others)
Product(Wide range of offerings &
innovative solutions)
Rates(Competitive &
Transparent)
Service
(Simplicity, SpeedFriendliness, Helpfulness,Knowledgeable & Wow
Experience)
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MARKETING MIXMARKETING MIX OUR PERSPECTIVEOUR PERSPECTIVE
Page 41
MARKETINGMARKETING
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MARKETINGMARKETING
Marketing is the process of planning andexecuting the conception, pricing,promotion, and distribution of ideas, goods,
services to create exchanges that satisfyindividual and or anizational oals
Marketing management is the art andscience of choosing target markets andgetting, keeping, and growing customers
through creating, delivering, andcommunicatin superior customer value
Page 42
American Marketing Association
MODERN MARKETING MIXMODERN MARKETING MIX
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MODERN MARKETING MIXMODERN MARKETING MIX
Productelements
Place,cyberspace,
and time
Price
Page 43
8 Ps
Turnaround
Productivityand quality
People
Promotionand
education
evidence
While great
devices are invented
in the Laboratory,
great products areinvented in the
Marketing
department.
CRITICAL FACTORS AFFECTING MARKETING STRATEGYCRITICAL FACTORS AFFECTING MARKETING STRATEGY
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CRITICAL FACTORS AFFECTING MARKETING STRATEGYCRITICAL FACTORS AFFECTING MARKETING STRATEGY
Page 44
SERVICE DIFFERENTATION TO DRIVE GROWTHSERVICE DIFFERENTATION TO DRIVE GROWTH
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SERVICE DIFFERENTATION TO DRIVE GROWTHSERVICE DIFFERENTATION TO DRIVE GROWTH
Our Core Product is Service
Increased sales do not always result inquality service, but quality service will
Page 45
produce increased sales
SIX STRATEGIC PILLAR TO SERVICE TRANSFORMATIONSIX STRATEGIC PILLAR TO SERVICE TRANSFORMATION
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SIX STRATEGIC PILLAR TO SERVICE TRANSFORMATIONSIX STRATEGIC PILLAR TO SERVICE TRANSFORMATION
Consistently meet & exceed customer service expectationCustomer ServiceCustomer Service
Deliver greater value to our customer and stakeholders byhaving efficient and cost effective processesTechnology & ProcessesTechnology & Processes
Assemble the best people and catalyst to spearhead anempowered and motivated customer focused teamPeoplePeople
Page 46
Provide simple and cost effective banking solutions that arecompetitiveProductsProducts
Inculcate Walk the Talk Culture, Service Excellence Culture &Sense of Ownership CultureCultureCulture
Optimize channel mix to cross sell our product and serviceofferings. Segmenting customer base based on delivery channelDistributionDistribution
CONSUMER BANKING PORTFOLIOCONSUMER BANKING PORTFOLIO TARGET MARKETTARGET MARKET
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CONSUMER BANKING PORTFOLIOCONSUMER BANKING PORTFOLIO TARGET MARKETTARGET MARKET
Engineers
AccountantsOil & Gas
Mass Affluent
Bankers
Page 47
Government
Servants
MedicalPractitioners
KEY INSTITUTIONAL CUSTOMERSKEY INSTITUTIONAL CUSTOMERS
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Page 48
KEY CORPORATE CLIENTSKEY CORPORATE CLIENTS
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26% of consumer portfolio
Page 49
PRODUCT ELEMENTSPRODUCT ELEMENTS
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Page 50
PRODUCT ELEMENTSPRODUCT ELEMENTS -- UNIQUE SELLING PROPOSITIONUNIQUE SELLING PROPOSITION
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Items Bank Islam Card Industry
Cash Rebate 0.3% to 0.8%on retail purchases,
given on anniversary date
Reward program, Treat Points
Khariat Kematian /
Funeral expenses
Up to RM1,000 Nil (except Bank Rakyat)
Page 51
a a u overage overage on utstan ng a ance
(TPD or Death)Up to RM100,000
Takaful Travel Protection
Up to RM1,000,000
ustomer ave to pay or t e
coverage premium.
Inquiry Balance Inquiry balance at i-TAP (mobile
banking)
Nil
Others 40% discount on will writing Not available
PRODUCT ELEMENTSPRODUCT ELEMENTS -- UNIQUE SELLING PROPOSITIONUNIQUE SELLING PROPOSITION
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House Financing Bank Islam Industry
20% Stamp Duty
Remission
Islamic financing is entitled for
20% stamp duty remission on
instruments and documents. Thus
savings to customers.
Not applicable
Payment Holiday Customers who opt for Payment Not widely offered. Currently
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the monthly payment on theirfinancing account every
November and December
throughout their financing
tenure. The objective of this
feature is to assist the customersin meeting their financial needs.
,
Chartered Bank and Al-RajhiBank offering similar feature.
PRODUCT ELEMENTSPRODUCT ELEMENTS -- UNIQUE SELLING PROPOSITIONUNIQUE SELLING PROPOSITION
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House Financing Bank Islam Industry
No Payment During
Construction (NPDC)
NPDC is offered to selected
housing projects which are
under construction developed
by reputable developers. This
feature allows customers to
defer the monthly payment
Not applicable
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for a period of 24 months. The
objective of this feature is to
assist customers who may face
tight budget due to their
obligation to pay house rental
during the construction of their
property.
PLACEPLACE -- BRANCH NETWORKBRANCH NETWORK
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150 branches by 2015
another 12 new branches by end of 2012
SELF SERVICE TERMINALS (ATM,CDM,&ETC)SELF SERVICE TERMINALS (ATM,CDM,&ETC)
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CYBERSPACECYBERSPACE
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PEOPLEPEOPLE
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Back Office Front Office StaffService &
Distribution Customer
End to end customer experience
Customer Service - the real differentiator of customer centricity in a
commoditized financial market
PROMOTIONPROMOTION TACTICAL CAMPAIGNTACTICAL CAMPAIGN
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ABOVE THE LINEABOVE THE LINE
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Advertising to mass market or mass audience Usually done via mass media i.e. TV, radio, newspaper and billboards
Usually used to rejuvenate brand value or establish brand presence or brand
identity
Effective when the target group is large and not well define
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BELOW THE LINEBELOW THE LINE
Advertising to specific target market
Usually done via direct means of communication i.e. SMS blast, Direct Mailing, etc Effective when targeting a specific group with unique value proposition
EDUCATIONEDUCATION
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PROCESS & TECHNOLOGYPROCESS & TECHNOLOGY
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Increased operational efficiency, profitability & productivity
Superior customer service
Multi-channel, real-time transaction processing
Better cross-selling ability
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mprove managemen an accoun a y
Robust risk management
Minimal transaction costs
Improved financial analyses capabilities
PRICINGPRICING
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EMERGENCE OF GEN YEMERGENCE OF GEN Y
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Ethical BankingVirtual Banking
(Branchless banking)Green Banking
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More SophisticatedFacebook as medium forcustomer engagement
Lack of Brand Loyalty
WHAT CHANGED IN MARKETING
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Organize by product units
Focus on profitable transactions
Organize by product units
Focus on profitable transactions
Organize by customer segments
Focus on customer lifetime value
Look also at marketin scorecard
Old Economy New Economy
Page 64 64
Loo primari y at inancia scorecar
Focus on shareholders
Marketing does the marketing
Build brands through advertising
Focus on customer acquisition
No customer satisfaction measurement
Over-promise, under-deliver
Loo primari y at inancia scorecar
Focus on shareholders
Marketing does the marketing
Build brands through advertising
Focus on customer acquisition
No customer satisfaction measurement
Over-promise, under-deliver
Focus on stakeholders
Everyone does the marketing
Build brands through performance
Focus on customer retention
Measure customer satisfaction and retentionrate
Under-promise, over-deliver
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WRAP UPWRAP UP
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SURPASSED HEADLINE KPIs 2011SURPASSED HEADLINE KPIs 2011
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Return on Equity
Above 15%ROE of 17.7%
Return on Asset
Above 1% ROA of 1.5%
Non-Fund Based
Income Above
10%
Non Fund BasedIncome of 13.8%
Cost Income Ratio
Below 55%Cost Income Ratio
of 53.8%
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Net FinancingAsset Growth of
20%
Net FinancingAsset Growth of
19.2%
Net ImpairedFinancing Ratio
Less than 2%
Actual NetImpaired FinancingRatio of Negative
0.3%
Dividend Payout
50% of PATZ
Dividend Payout of25% of PAZT
RWCR > 15%
Core Capital Ratio
> 8%
RWCR* of 16.3%Core Capital Ratio*
of 15.3%
* pre -dividend
PROFIT BEFORE ZAKAT & TAX TRENDPROFIT BEFORE ZAKAT & TAX TREND
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Profit before Zakat and Tax for12 months to Dec 2010
= RM 344.5 m
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* 18 months Financial Period Ended Dec 2010
ROBUST FINANCING GROWTHROBUST FINANCING GROWTH
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RMM
illion RM2.28b Growth
+ 19.2%
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1,676.3
311.6 288.3
4.4
RMM
illion
MARKET SHARE AS AT DECMARKET SHARE AS AT DEC 20112011
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22.5% 14.3% 9.6% 8.8% 6.7%
Total Assets
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RM75.5b RM32.2bRM47.9b RM29.4b
Islamic Banking Assets RM334.9 billion
RM22.4b
MARKET SHARE AS AT DEC 2011MARKET SHARE AS AT DEC 2011
Net Financing
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25.4% 14.7% 9.6% 7.6% 7.0%
Net Financing
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RM50.9b RM19.2bRM29.5b RM15.3b
Islamic Banking Net Financing RM200.3 billion
RM14.1b
MARKET SHARE AS AT DEC 2011MARKET SHARE AS AT DEC 2011
Deposits
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22.1% 11.8% 10.6% 7.5% 6.4%
Deposits
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RM59.1 RM28.3bRM31.6b RM20.0b
Islamic Banking Deposits RM267.0 billion
RM17.0b
MARKET SHARE AS AT DECMARKET SHARE AS AT DEC 20112011
CASA Deposits
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25.0% 18.4% 11.1% 10.0%5.2%
CASA Deposits
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RM16.7b RM7.4bRM12.3b RM6.7b
Islamic Banking CASA Deposits RM66.7billion
RM3.5b
WINNING NOTEABLE DEAL 2010WINNING NOTEABLE DEAL 2010
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Principal Adviser, Managing Underwriter, Underwriter and Placement Agent for Initial Public Offering inconjunction with Listing on Main Market of Bursa Malaysia. Bank Islam chartered Malaysian corporatehistory by being the first Islamic Bank and commercial bank to advise on a listing exercise
Principal Adviser, Managing Underwriter, Underwriter and Placement Agent for InitialPublic Offering in conjunction with Listing on Main Market of Bursa Malaysia
Joint Lead Manager, Joint Book Runner & Shariah Advisor for RM10 bil Aman MTN Sukuk,for the development of Police facilities.
Senior Manager for RM 800 mil Syndicated Islamic Financing Facility for Aura Bayu Sdn
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Senior Manager for RM667.5 mil Syndicated Islamic Financing Facility for RanhillPowertron II
Arranger for US$150 mil Syndicated Islamic Financing Facility for Qatar Airways QCSC
Lead Arranger in the syndication of Islamic financing facility of RM330.0 mil for KedahSato Sdn Bhd, a subsidiary of Bina DarulAman Bhd, in relation to the development ofKolej Universiti Insaniah
Lead Arranger in the syndication of an Islamic financing facility of RM327.0 mil forPROLINTAS Expressway Sdn Bhd, the concession holder of Guthrie Corridor Expressway
WINNING NOTABLE CORPORATE MANDATES 2011WINNING NOTABLE CORPORATE MANDATES 2011
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Joint Lead Arranger, Joint Lead Manager for
RM5 bil Sukuk Ijarah Program
Joint Lead Arranger for
RM2.6 bil Syndicated Islamic Revolving Credit Facility
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Co-Manager or RM2.0 bil
10-year and 15-year Islamic Medium Term Notes
RM150 mil Term Financing Facility to undertake
Mandatory General Offer
UNDERWRITER LEAGUE TABLEUNDERWRITER LEAGUE TABLE -- ASEANASEAN
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UNDERWRITER LEAGUE TABLEUNDERWRITER LEAGUE TABLE MALAYSIAN ISLAMIC SUKUKMALAYSIAN ISLAMIC SUKUK
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Disclaimer: This presentation material has been prepared by Bank Islam Malaysia Berhad (the Bank) for information purposes onlyand does not purport to contain all the information that may be required to evaluate the Bank or its financial position. Norepresentation or warranty, express r implied, is given by or on behalf of the Bank as to the accuracy of the information or opinionscontained in this presentation. The presentation does not constitute or form part of an offer, solicitation or invitation of any offer,to buy or subscribe for any securities , nor should it or any part of it form the basis of, or be relied in any connection with, anycontract, investment decision or commitment whatsoever. The Bank does not accept any liability whatsoever for any loss howsoever
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arising from any use of this presentation or their contents or otherwise arising in connection therewith.
BANK ISLAM MALAYSIA BERHAD11th Floor, Wisma Bank IslamJalan Dungun, Bukit Damansara50490 Kuala LumpurTel: 603 2088 8222
www.bankislam.com.my
Hizamuddin JamalluddinGeneral Manager, Strategic Planning
Managing Directors Office
Contact: 602 2088 8077Email: [email protected]
Mujiburrahman Abd RashidAssistant General Manager, Sales & Marketing
Consumer Banking
Contact: 602 2088 8268Email: [email protected]