Alliance Financial Group is pushing for more more business in the consumer and SME sector.
With the responsible financing guidelines in effect since January, the landscape of the financial industry will change with more sophisticated products coming from the various industry players, according to Ronnie Lim, Alliance Bank Malaysia Bhd executive vice-president and head of consumer banking.
Under the new rules, banks will have to test if a borrower can afford a loan and provide more detailed information on a product. This will include its borrowing rate, repayment obligation, applicable charges, implications of non-repayment, risk associated with the product, and assistance and redress mechanism.
Lim says the RFG had ensured the financial industry will grow at a more sustainable pace, with the focus on secured loans rather than unsecured loans like credit cards and personal loans that had resulted in a financial problems in other countries like South Korea, Taiwan and Hong Kong.
“With the RFG, the authorities are sending a strong message to society to borrow and spend within their means.
In other countries, banks driven by returns had been promoting higher yielding personal loans to individuals,
without being told to be cautious on spending. This is why the industry blew up in other places,” he says.
“The new engine of growth will be from business owners of small and medium enterprises, particularly individuals looking for investment opportunities (wealth management) and also more products for current accounts and savings account,” Lim added.
AFG is planning to introduce more products by the first quarter of next year and aims to consolidate a customer’s banking relationship by cross-selling and retaining its customers under the Alliance OneBank Rewards plan.
“Besides the conventional credit card reward system, the plan stretches across most banking services include deposits, loans, units trusts, and bancassurance. This would be our flagship product to tie up all the loose ends,” he says.
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