Page 13 - Crossroads: September 2015 | Issue 9

across the Association of Southeast Asian Nations (ASEAN). In fiscal year 2014 (ended March 31, 2015), which includes the first full year since integration, the bank’s net income grew 19 percent.
Our collaboration with Krungsri has been one of mutual give and take. Pierre Habis, Group Head of Consumer and Business Banking, went to Thailand as an advisor in the merger-and-acquisition phase of the integration, and shortly after the deal was finalized, his deposit and analytics team went to Bangkok to share best practices about managing deposits and customer-driven data with Krungsri colleagues.
“Krungsri is very good at consumer finance and has some lessons for us there, while we have expertise in the deposit business and customer analytics to offer in return,” says Pierre. “Since the acquisition, we’ve shown Krungsri how we grow and manage the cost of depos- its, with the goal of helping them reduce their current high cost of deposits. We’ll eventually collaborate on Private Banking and online and digital banking. Most recently, we’ve been learning how they manage their successful credit card business.”
Reentering the credit card business
After Union Bank sold its credit card business in 1998 — retaining only its branded debit card — income from credit cards relied solely on referrals to the company that purchased the business, and currently accounts for $5 to $6 million a year. After we purchase the portfolio back and launch our new credit card program in 2016, new applicants and current customers will receive the Union Bank-issued credit card. Fully owning the business is projected to provide approximately $115 million in
revenue and $60 million in core earnings during the second and third years of the current mid-term business plan (FY2015- 2017).
In June, our credit card team, led by Managing Director Brian Milton, went to Bangkok for a deep dive into subjects including product development, market- ing, operations, and vendor manage- ment. Krungsri’s leading position in Thailand’s credit card market includes more than three million customers who receive superlative service.
“It was an intense week of productive meetings, with a packed agenda from start to finish,” says Brian. “Our Thai colleagues were incredibly thoughtful and collaborative. They wanted to ex- change knowledge for mutual benefit, asked very useful questions, and offered meaningful guidance. We had a real sense of shared purpose.”
Krungsri’s experience in the credit card business covers the entire spectrum of starting, running, enhancing, and market- ing the program. They are experts in customer management, pricing, credit and risk management, and vendor management — expertise in that specific product that grew rusty in the Americas after Union Bank left the business in 1998.
Some of the tactics Krungsri offered Brian and his team (Ivan Seda, Retail Finance, and Bill Poppen, Credit Risk Manage- ment) include how to minimize customer disruption and attrition, connect risk management and portfolio activation, develop sound collection strategies, and manage the outsourced vendors who will do most of the heavy lifting. For example, Krungsri manages multiple vendors in a way that is tightly controlled and aligned to their desired customer experience, which is also one of our primary goals.
“The credit card busi- ness is ideal for us at this stage of our company’s growth.”
September 2015
For internal use only
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