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Maybank: Meeting Customer Needs in a Changing Environment

Menara Maybank, the Head Office of Malaysia's largest financialservices group, Maybank, may stand 58 storeys in central KualaLumpur, but the corporation's activities are by no means restrictedto its home city, or even home country. Of the 14 countries overwhich more than 450 offices are spread, eight (Malaysia, Indonesia,Brunei, Singapore, Philippines, Vietnam, Myanmar, and Cambodia) arepart of the Association of South East Asian Nat ions (ASEAN).Maybank also works closely with 700 foreign banks around theglobe.
Now almost 50 years old, Maybank has matured into a corporationoffering an extensive range of financial products and services. Itsbusinesses include commercial banking, insurance, finance, assetmanagement, investment banking, and Islamic banking. This Malaysianbank has been able to develop into the success that it is today byanalyzing and reacting to various relevant macro-environmentalforces that influence its business. The social, economical,regulatory, and technological forces in Asia appear to havedirected much of May bank's actions in recent years.

SOCIAL FORCES
The social forces that influence Maybank can be categorized intochanges in demographics and changes in values. One of the mostobvious recent demographic changes in Asia is the increase in themedian age of the general population. This indication of an agingpopulation has brought about substantial growth in savings andretirement plans. Other factors that have caused a surge in savingsinclude increasing number s of both smaller household s and double-income families. The resulting higher gross house­ hold incomesmean higher discretionary incomes that can be saved or invested.Maybank offers a number of savings and investment account optionssuch as the Gold Savings Passbook Account and Flexi Plan 2. Thevariety of choices makes it possible for customers to select themost appropriate plan, which can be personalized to best suitthemselves. Another noteworthy change in Asian demographics is theincreasing level of education and academic qualification of theaverage person. This leads to a better aware­ ness andunderstanding of the importance of saving and investing among theyounger generation. To further educate the youth and encouragefinancial management, Maybank pioneered on line savings accountsfor the teen­ age market by developing the \"imteen\" account.Teenagers with an imteen account can access banking services overthe Internet; they can track their savings balances and pay theirbills on line. Additional features include a range of downloadableproduct s and cash awards.
Large proportions of Asian populations have relocated, from urbanto more rural regions, as well as from home to foreign countries.Maybank has responded to the urbanization of previously rural areasby establishing branches throughout the Asian region as well as theworld. This helps to support and serve customers regardless oftheir location.
In general, the reshaping of Asian values stems from changes in thedemographics of the people who hold these values. For instance,people with higher educational qualifications place greatimportance on efficiency and staying up-to-date with current eventsand situations. To support the busy lifestyles of these customers,Maybank developed the low-maintenance Premier Club account for\"individuals who are constantly on the go” Another importantdemographic change is the increase in the number of double-incomecouples, resulting in a growing emphasis on the togetherness of afamily. As more parents have less time to spend with theirchildren. they have come to place higher value on leisure timespent as a family. In China, an increasingly more educatedpopulation , who are more aware and open toward foreign practices,has brought about the implementation of the Jive-day working week.Emphasis on family unity and longer weekends has contributed toincreased tourism at home and abroad, while a more open attitudetoward foreign influences has resulted in a growth in foreigninvestments and multinational businesses. The consequent increasein foreign currency use in Asia, propelled by the overallglobalization of the world, led Maybank to offer its customers itsrange of foreign currency accounts.
The most significant advantage of Maybank's foreign currencyaccounts is the minimized risk of foreign exchange ratefluctuations. Available in over 10 currencies, each account is acomprehensive package with a list of additional features, one ofwhich is discounts on traveler's checks. The targeted segmentsinclude Malaysian residents who have an overseas source of regularincome because they are employed in foreign countries, and non-Malaysians who are employed in Malaysia.

ECONOMIC AND REGULATORY FORCES
Asia has recently experienced much liberalization in trade andinvestment, which can be categorized as both an economic andregulatory force. Maybank's range of foreign currency accounts wasalso a response to this macro-environmental change.
Liberalization in trade and investment is encouraged in Asia inorder to facilitate international interactions in the economic andsocial arenas by diplomatic coordination of regulations andstandards. Examples of changes in regulations concerning trade andinvestment include the reduction of import tariffs, and theabolition of subsidy payments and tax exempt ions granted toexporters. The ASEAN countries Free Trade Agreement (AFTA) is atypical example of regulatory changes that aim to change theeconomic environment of Asian regions. This trade bloc agreementwas first signed in 1992, and today the ten ASEAN countries conformto it. In addition to reducing tariffs, AFTA also eliminates othertrade barriers such as the formalities of verification andcross-notification. The result of such trade liberalization isimproved economic efficiency, which in turn means increasedattractiveness of the countries to foreign direct investment.

TECHNO LOGICAL FORCES
The ever-changing technological scene in Asia, a part of a globaldevelopment, has prompted Maybank to implement various features andservices to better satisfy customer need s and wants. One of themost evident recent technological developments is the decliningcost of computers and other electronic devices. Complemented by thedevelopment and expansion of the Internet, this has led Maybank tonot only create a corporate website, but also offer a comprehensiverange of services that are accessible online. For example,customers can view and make transact ions, pay bill s, and sendquestions or feedback from the website. Such services createsubstantial value for customers, many of whom use the Internet on adaily basis. Maybank also offers a brief yet informative tour ofservices for those who are less confident about using theInternet-based tool. With the sophistication of the Internet hasarisen the issue of cyber security, yet another technologicalchange to which Maybank has had to respond. Its website providesinformation and advice on safe Internet banking habits, includingchoosing appropriate usernames and passwords, clearing browsercache, logging out securely, and updating security software.Moreover, Maybank implemented the Transaction Authorization Code(TAC) system in 2004 to create an even more secure Internetenvironment for its customers. Customers are required to provide aTAC in addition to their username and password; TAC provide s asecond layer of security for customers performing online bankingtransactions. Furthermore, the Maybank website is constantlyundergoing expansion and enhancement. Cell phones have becomecommonplace in Asia, as they have in other parts of the world.Dependence on cell phones is increasing, fueled by an expandingrange and network of mobile services. Maybank offers many servicesaccessible by cell phones. For example, customers can send textmessages via Short Message Service (SMS) or call to request theirTAC. Maybank's mobile financial services enable customers to usetheir currency via mobile phones. Maybank promotes it as a \"secureand convenient\" method of conducting electronic cash transfers,downloading and purchasing products and services, paying bill s, aswell as topping up prepaid accounts.

Questions

What macro environmental forces affect the banking industry?What implications can be drawn as a result for marketing strategiesin the banking industry?

How has Maybank responded to the macro environmental changes?Are the responses appropriate? What other responses would yousuggest?

3a.   How do you see the similarities and thedifference between managing a product vs managing a service?

3b.   What are the four characteristics for managing aservice industry; and if apply into a banking industry, what arethe proposed solutions for each of the unique characteristic.Please kindly elaborate each of the characteristic.