CIMB Group is the second largest financial service provider in Malaysia and also ranks fifth in Southeast Asia by comparing the total asset. CIMB Group is listed on Bursa Malaysia with market capitalization of RM46.6 billion.
CIMB Group acts as a universal bank that offers variety of financial products and services, such as corporate and investment banking, consumer banking, treasury, insurance and asset management. CIMB Group offers dual banking basis which is conventional and Islamic solutions. Currently, its main market is Malaysia, Singapore, Indonesia and Thailand, where these countries have full universal banking capabilities. CIMB Group also can be found in 7 other country in South East Asia.
Background
Electronic banking refers to all banking activities and transaction that involve the uses of various form of technology. Before this, the financial services are delivered through brink and mortar method which is required the customer to go to the branch to make transactions.
In recent times, there is a rapid shift towards the electronic distribution. We ask the opinion from Mr. Zaidi and he told us that most financial transaction are repetitive in nature so the financial institution found that it is more cost effective to deliver services electronically. He also informs us that people nowadays are more enthusiastic in their willingness to adapt to technology. Mr. Zaidi also mentioned that the bank has attracting the user to use online method to make transaction by having promotion. They have implemented lucky draw and so on for the user that uses online transaction.
We also ask Mr. Zaidi whether CIMB have fully implement the lending activities through online and he told us that CIMB currently does not have those functions yet. The reason he gave was it was very costly and unsecured when they do not have the system yet. We have made our own research and found out that none of the financial industries in Malaysia have implemented this technique yet.
Factors that affect lending activities
We had interview Mr. Zaidi about the factors that will affect lending activities. He said that economic factors will definitely affect the lending institution. Let's take for one example, if there is an economic recession, unemployment rate will gradually increase. Thus, people will make careful consideration in their spending. Other than that, because of many people out of work, it will lead to the lenders more cautious about the risk of every lending activity. A slowdown in the economic will also affect small business by reducing the number of profitable projects. This will leads to the loans to small business.
Not only that, economic recession also will leads to a continuous rise of bad debts which will affect the ability of the bank to provide the financial need. The main sources of fund in the bank are customer deposits. If people decrease their deposits in the bank because of the needs of money in economic recession, it will also affect the bank financial funds. All of these economic factors will make lenders reluctant to create any lending transaction with loan applicants because the risk of the borrower unable to pay the money on time is seriously increased in economic recession.
Moreover, Mr. Zaidi also said that the lending policies will also affect their bank lending activities. Bank Negara has come out several rules and regulations to control all the lending activities in Malaysia. Bank Negara requirement such as lending rates and deposits rates has restrict the lending activities of CIMB Bank. CIMB Bank also not allowed approving the lending application for illegal activities such as loan shark.
Electronic Banking and Lending
Mr Zaidi had lists several electronic banking systems that support the lending activities. Although in Malaysia, Bank is unable to provide the customers to process all the loan application through Electronic banking, but all of these electronic banking tools help the lending activities easier to process and increase the convenience of customers. Electronic banking tools also assist bank officers in order to minimize their paper work and make the transfer faster and cost effective.
ATM
The main purpose of ATM of CIMB Bank is allows their customer to withdraw money. It also provides services for their customers to overdraft the money. The fees charges will be based on the amount of money overdraft. Furthermore, ATM also supports the lending activities by allowing their customers to pay installment for loans through ATM. It not only minimizes the burden of staff paper work but also speed up the time for customers to make the transfer. ATM machine also allows CIMB Bank to advertise their new package for customers.
Credit cards
Credits cards are known as the most convenience electronic banking system for the customer. It supports the lending activities by allowing the customers to pay the bills for products without using paper money. Mr. Zaidi also said that although specific interest will be charge, but using credit cards is useful for customers who going to foreign country which can minimize the customer risks of being stolen by robber. Bank provides credit cards to customer are likely to make loan to customer to buy products and services.
Online Banking
Nowadays, online banking is playing an important role in banking and lending fields. Our interviewee, Mr. Zaidi had said that CIMB Bank offer for online banking is widespread support throughout the country. Online banking and lending offer by CIMB Bank is known as CIMB clicks. Through this CIMB clicks, customers not only can do simple transaction but also apply loans through this system. CIMB clicks that support lending activities by allowing customers to make loans application as well as pay installment through online. Services offered by CIMB clicks that support lending activities include:
E-Application
E-Application allows customer to apply loan application through online include business loan, home loan, and ASB or personal loan. Customer can fill in loan application forms through online and send it to Bank. Mr. Zaidi suggest customers to doing so, so that it can speed up the time as customer only have to submit the supporting documents to and confirms some agreement at nearest bank because bank already have a copy of application form in their internet system.
Transfer Funds / Pay Bills
This service allows the customer pay bills or transfer funds to own account, to other CIMB accounts, to account in another bank via Internet GIRO as well as CIMB credit card. It allows the customer to make monthly or quarterly installment through online without physically presence at CIMB Bank. Customer bills statement will be updated in the schedule provided.
CIMB Clicks Home Loan Calculator
This application is useful for the customers who want to apply loan from CIMB Bank. It allows customers to quickly evaluate their eligibility for their loans apply. It also helps their customers to estimate their monthly installment that they have to pay.
Payment Alerts and Reminders
Mr. Zaidi says that this service is very useful that help reminds their customer about the bill payment deadlines by send to them through SMS or email. It also keeps a record and sends the transaction that has been performed by customer that enables customers to double sure their transaction.
Electronic Banking to Pay Installment
Other than those questions that we asked the interviewer is also include about electronic banking to pay the installment. Mr.Zaidi told us that CIMB Bank is definitely providing this type of function for users. It has two methods provided to users. First, is the CIMB bank allows customer to transfer payment from their saving or current account to loan account. This can facilitate the usefulness and efficiency for the users to make their quick payment.
The second method that Mr. Zaidi mentioned is about the automatic deducted from customer saving or current account. It must make at the beginning of the month. And it also called as standing instruction. A Standing Instruction (SI) is a remittance service by a customer can instruct CIMB bank to affect regular funds transfer at pre-set timings and amounts from the customer's deposit account to designated beneficiary accounts. Such payments included repayment of loans, payment of bills or insurance premiums and salary payments.
Types of Loans
In CIMB bank, there are three types of loan that can apply through CIMB clicks; they are ASB loan, home loan, and business premises financing which applicable for individual and sole proprietor. During the interview, Mr. Zaidi had showed us how to apply those loans.
It is very simple which users have to access the CIMB clicks website, sign in user account, and choose the loan they want and just fill in the information then click the button to submit. For other loan that are not allow to apply via CIMB clicks, applicant can also go to the CIMB website ( http://www.cimbbank.com.my ) to download the PDF format of application form.
Users of E-Banking
Form the interview, Mr. Zaidi told us that the most popular users are businessman and young generation. There are relatively less old generation users because they are lack of IT knowledge and seldom or even never use computer. So they have less confident in internet and sure they generally would not use electronic banking and lending system. Mr. Zaidi also mention that the bank have tried to attract the older customers by making the e-banking more user friendly.
In the new era of technology, most young generation are common in using internet. Electronic banking and lending are easy for them. So, it is suitable for young generation. On the other hand, in the area of businessman, most generation are also common in using internet. There is no age range limited because even old businessmen also need to have IT knowledge when doing their business. The electronic banking and lending helps hectic businessman to save their time when apply a loan or pay installment. So, electronic banking and lending is most suitable for businessman.
Advantages For E-Banking And Lending
From Mr. Zaidi, we know that the main advantages are convenience, save time, save cost and effective promotion. It is relatively more convenience for applicant because they can just access to any bank's website to get any information they want and make comparison about the features such as interest rates, available credit cards and their interest rates. Other than that, users can check their transactions via CIMB clicks website and track internet banking and money 24 hours a day, 7 days a week or even for a specific day.
With internet banking lending helps save a lot of time. Applicants can avoid stand in long lines to submit application form and obtain financial information. With electronic banking and lending, users can just access the CIMB clicks website, complete the information and click to submit. For the loan which cannot apply through online, the loan form is available at CIMB website. So, users do no need to go to the bank centre to get the form. On the other hand, users can also transfer funds from one account to another in almost an instant.
Mr. Zaidi also mentions that electronic banking and lending can helps the bankers and users to save their cost. By using the computer as a main instrument to undergo loan application and process, banking can save the labour cost. This is because electronic method is more efficient than traditional method. Therefore, there are relatively less labour needed. Users or applicant can also save their petrol cost to go to the bank and make application of loan and also go to several banks to make research on terms and interest rate.
Apart from that, it is easy for bankers to make promotion. Bank promoters can promote their package via internet by sending e-mails to their customer or post the announcement on their website. This efficient and effective ways allow users from various countries to tracks the bank's new promotion. Therefore, bank's promotion can be spread out in a very short period.
E-LENDING PROCEDURE
During the interview, Mr.Zaidi explained to us the step to apply loan through online. The first step is goes to CIMB clicks website and sign in the user account. After sign in, select the loan required and complete the form then click to submit. If there is no form available in the CIMB clicks website, users may go to CIMB bank website to download the PDF file's form, print out, complete it and submit to nearest CIMB bank branch. No matter the form is submits through CIMB clicks or to CIMB bank branch, physical document is required to submit to nearest CIMB bank branch.
Mr. Zaidi states that once the bank received the application form from the applicant, the bank officer will arrange and informed the applicant go to the nearest branch for more details and submit the supporting documents. The supporting documents are needed for the bank officer to check whether the applicants are using real or fake information in application form, it can increased the credibility of the application. After that, bank officer will determine whether to accept or decline the loan application. Mr. Zaidi said that the bank officer will based on the applicant's history record and their monthly income. The applicant history showed the applicant's characteristic. If the applicant never be CIMB bank's customers, bank officer will call to other bank to ask their opinion.
After complete identify whether to accept or decline the loan, CIMB bank will inform applicant whether the loan is success or not. For the application which is rejected, bank will give a valid reason to users. While for the application that are success, CIMB bank will advice the applicant go to the bank to sign the agreement and others relevant document. Normally they will use e-mail, mobile and letter to informed applicant. If the applicant does not provide the e-mail address in the application form, CIMB will respond by using mobile or letter. Other than that, any application can make at branch but the decision for approval is required to make by headquarter. For every application, the process will take around three to seven days to give respond for the applicant.
On the other hand, Mr. Zaidi told us that the success rate of the online loan application is depends on customer strength, if the customer is not qualified will be rejected by them. Sometimes the information provided by the customer is insufficient or incorrect; the bank officer may not approve the application. Besides, others reason to reject the application is the officer is checks it out the documents has any problem.
Sometimes, there have some fraud happen, so CIMB had make some preventions to prevent fraud occur. For example, the officer will request customer to provide their physical documents as evidence. After that, the officer will verify the documents carefully. Next, they will ask opinion from other bank if the applicant has other account in other bank, so the officer evaluate whether the applicant have any bad record in their bank.
Problems arise from Electronic Banking and Lending
Mr. Zaidi had told us that if CIMB experiences any problem about electronic banking, it will be handled by headquarter. The bank officer at the branches will not be able to detect any hacker and unauthorized person had entered their bank system. So he told us that he can't provide us the problems that their bank has been face. But generally, we know that there are several examples of problems that arise due to e-banking and lending activities. Bank institutions will receive some complains from customer related to the problems of processing errors or system disruption. These will cause customer unable to complete the application.
Besides, if the bank is updating their website, their online system will under maintenances. It will cause customers unable to login. Customers will also concern about the security control that involve several issues such as the authorization of controls and data and transaction security. Let's take for 1 example, if a system without a proper authentication, unauthorized person may be able to access private accounts. Thus, it is the responsible of the bank to ensure proper security controls and safeguards are maintained in electronic banking and lending system.
Improvement of CIMB
From the interview, we asked some of the questions that how CIMB will improve their electronic lending services in the future. The interviewer, Mr. Zaidi is very kindly to explain to us. The very first important thing is the cut off time after one minute of idling. This is a security measure. When we do transactions, it is always very fast and done within seconds. As Mr. Zaidi mentioned when there is no activity for one minute, something is definitely wrong and the ATM should deactivate our transaction. Or the ATM will confiscate our card would be better than leaving it there at active mode to let the next person withdraw our money. This is a good function especially for older generation who are really very careless and with poor memory, or even crime prevention. And it can avoid any of the accidents happen.
However, scheduled and random physical checks of ATMs by branch staff and technicians are also play an important role of improving in the future. Mr. Zaidi told us that it will be 24hours availability for users to use when they urgently need cash. It is important therefore that banks exert money and resource to making sure that their ATMS remain fully operational.
Besides that cleanliness is also very important because users can frequently withdraw money from the ATMs. No one wants to see the remains of food over the ATM screen or broken beer bottles on the ground. CIMB need to regularly maintain the ATMs and surrounding area. This is to contribute to a pleasant consumer experience for CIMB. From the interview we have learnt something new about this, because in our concept is not really describe this in details.
Other than that, Mr.Zaidi told us the CIMB bank will more concern the accessibility for the disabled in the future. ATMs need to be accessible to everyone and that includes old people, people who do not have perfect eyesight and people in wheelchairs. CIMB might want to ensure their ATM networks are upgraded so that people in wheelchairs can easily use them. For example, the size of text on screen should be large enough to make for easy reading, the structure of machines to be accessible on a wheelchair.
CIMB Service Charge
CIMB Bank and CIMB Islamic ATM cardholders are able to withdraw the foreign currencies of up to the Ringgit-equivalent limit set by the individual customers. These withdrawals can be done for free, with no hidden fees or service charges. Meanwhile other MEPS customers will be charged RM1 as per any existing MEPS transactions. For CIMB Bank, CIMB Islamic and Direct Access credit card holders, they can withdraw the foreign currencies as cash advances based on their limit set by the bank. However, this is subject to the stipulated service charges outlined by terms and conditions.
Mr.Zaidi has elaborating on the Foreign Cash ATMs the features and benefits, Mr.Zaidi said, customers will be alerted of the day's exchange rate (for the eight currencies) at the machines before proceeding with the withdrawals, and they will be pleased to see that our exchange rates are one of the best in town. CIMB Bank and CIMB Islamic have been aggressively enhancing its ATM services for its customers. Recently, the bank announced that its regional ATM network of more than 3,750 CIMB ATMs is now fully integrated, and customers from Malaysia, Indonesia, Singapore and Thailand are able to enjoy cross-border ATM facility when traveling to these countries. This enables them to withdraw money from any CIMB Bank, CIMB Niaga and CIMB Thai ATM machine for free, in the respective country currency.
Additionally, in Malaysia, customers of CIMB Bank enjoyed free Touch n Go reloads at the banks ATMs, whereby the RM0.50 charge is waived when they reload their card value via direct debit from their accounts.
Conclusion
From the interview, we have learned a lot from Mr. Zaidi regarding CIMB Bank from how the process works to the time needed to complete the process. We compared the procedure of online lending process in CIMB Bank given by Mr. Zaidi with theoretical steps that we found in the books and found out that there are many similarities between these two procedures. The slight difference is that the information given by Mr. Zaidi is more fitting to the banking in Malaysia.
In a nutshell, E-banking and lending is totally safe to be used, cost efficient and time saving for both the users and the bank so they should be fully implemented everywhere. In my opinion, the improvement for e-banking and lending should be nonstop so that the users and bank will benefits from it.
We would like to thanks Mr. Zaidi and all the staff in CIMB Bank, Baru Berendam Branch for giving full cooperation and helpful to us that we are able to complete this assignment successfully. We would also like to thanks Ms. Venny for helpful information that help us solve the doubt we had.
