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OCBC's 360 Account pulls in 30 per cent more deposits
DEPOSITS in OCBC's headline 360 Account have jumped 30 per cent from a year ago, as the bank reaps first-mover advantage from having rejigged the way it pulls in the savings of young professionals, a top executive said in an interview with The Business Times.
Its head of consumer financial services Singapore, Dennis Tan, said that in a competitive market, the bank is committed to offering higher interest rates for its 360 Account, which pays customers interest by the number of transactions they make with the bank - that is, the strength of their relationship with the bank - rather than the amount of money they park in it.
He added that the bank will soon "change the construct" of the savings account, but declined to elaborate.
Of the 360 account, he said: "I think we have shown the commitment. We're not here to lower the rate."
The 360 offers, at the minimum, 1.2 per cent in interest a year if customers credit at least S$2,000 in salary a month. OCBC's data shows that more than half the customers with a 360 Account use the bank as a primary bank - that is, they credit their salary into it.
They get another one per cent for 12 months if they insure or invest certain amounts of money, and additional interest when they pay bills through the account and spend on their OCBC credit cards.
Since 2014, flows from customers through this portfolio have grown seven-fold, said Mr Tan.
But competition remains at bay.
DBS has just launched a cashback programme under which customers earn up to S$130 a month in cashback by transacting in at least three in five ways with the bank, such as by crediting their monthly salary, spending on their card and buying insurance.
This scheme also plays into DBS's major share in the home-loans market; by paying a mortgage instalment, customers also earn a cashback, although this is capped.
UOB runs its One Account, which is also tied to transactions. The bank steps up the interest rate as the account balance increases.
Foreign banks such as Standard Chartered and Bank of China now run similar savings programmes as well.
OCBC's Mr Tan said: "We anticipated this. We introduced this paradigm shift. ... It changed the whole industry. Ever since then, every bank has had some kind of an equivalent - but we take pride in having the first-mover advantage."
The bank recently won top honours at the Global Performance Excellence Awards, which rates Asia-Pacific businesses. OCBC was endorsed by Spring Singapore, the country's national quality award organising committee.
More work lies ahead. OCBC has intensified its digital push in the last six months, which has boosted its top line.
Sales of unit trusts rose at around the time it launched its OneWealth mobile app. Overall unit trust sales have increased three-fold, with 70 per cent of online sales made by investors aged between 23 and 39.
The bank is also banking on technology to crank up its productivity behind the scenes.
For example, it is trying out voice analytics to screen keywords uttered by customers who call up the bank. The technology helps the bank to sift through the top concerns of its customers; the data collected is then used to refine its service standards.
The bank is using the same analytics internally, checking on the tone of voice used by its call-centre staff and turning this data into a resource for internal training, said Mr Tan.
It has also deployed robotics to handle certain repetitive backend tasks which power the requests of customers coming in through the call centres. Some staff freed up as a result have been redeployed to handle calls at its contact centres, or to other departments, he said.
The bank will soon have a full roll-out of voice biometrics as a security feature for calls, with the feature expected to cut verification time down to just 15 seconds, he added.