Business

Monday May 4, 2009

Revamp of Association of Banks in Malaysia under way

By YAP LENG KUEN


It’ll focus more on consumer affairs and market conduct

A REVAMP of the 36-year-old Association of Banks in Malaysia (ABM) is under way that will place it more in line with the current focus on consumer affairs and market conduct.

“We hope that by end of this year, we can be a much more worthwhile sounding board between consumers and banks as to what the banking services should look like.

“There is no better way to build confidence than to meet with queries and challenges that the consumers throw along our way,’’ executive director Chuah Mei Lin told StarBiz.

Chuah Mei Lin ... we hope to become a reference point and model for success

Six months into the job, Chuah has been actively drawing up a list of how to prepare consumers for modernisation such as the wider use of electronic payment channels.

To her, understanding what consumers want and need - for example, response time - will help in planning for the future of banking services.

In this regard, the ABM is working with Bank Negara to come up with enhanced standards for customer service.

“The association was set up in 1973 and many procedures have become unwieldy. We need to consider a self- regulatory structure as well in due time,’’ she said

An example is drawing up a structure for complaints procedure. Picking up from a complaint lodged by an irate customer, for example, ABM has issued a guideline to banks prohibiting bank employees who are specifically mentioned in a complaint from being involved in any way in the handling of the said complaint to avoid any conflict or perceived conflict of interest.

In the issue of the cheque truncation payments system that was rolled out last year, ABM is working with the banks on operational issues to ensure that expectations for better service are met.

Among the priorities is holding more dialogues with consumers. On complaints that the merchant discount rate imposed by banks on merchants is being passed onto consumers using credit cards, Chuah said it was actually the merchants who should pay. “Complain to us and we will blacklist the merchants.

“We want to go forward to meet up with the public and intend to do more dialogues of this nature. We welcome the participation of the Ministry of Domestic Trade and Consumer Affairs and other authorities to be part of these dialogues,’’ she said.

Chuah says it is the merchants who should pay the discount rate imposed by banks on them, not the credit card users. “Complain to us and we will blacklist the merchants.”

Within the list of groups for dialogue are the small and medium-scale enterprises, consumers’ associations and the disabled. Accountants and lawyers may also need to be engaged as consumers sometimes complain of being charged fees and do not understand how it works.

“In times like these, fees can be a sensitive matter. In cases of litigation and letters of demand, costs ought to be still negotiable. We may talk to the Bar Council on this. “For a person who is already facing bankruptcy or other forms of loan-recovery proceedings, the costs of proceedings right up to the judgement and recovery stages, which can be quite substantial, are borne by him as well,’’ said Chuah, who practised as a lawyer for many years before moving to the financial services and securities industries.

An industry-wide data base for risk management is also being considered. “It is interesting to see more cross sectional data. Sometimes, the profile of individual banks can be dictated by its own needs and strategy,’’ she said.

For a change, the ABM is highlighting potential issues to the banks instead of waiting for them to surface and then only getting back to the banks.

To tackle the recent cases on Internet phishing and scams, Bank Negara came up with a budget while banks-sponsored radio programmes spared some air time to issue warnings to the public.

“These syndicates work in rounds. We have to continuously alert the public not to simply give away their phone numbers or personal particulars,’’ she said.

Currently, the ABM has divisions on operations and strategy as well as rules and regulations. It is in the process of setting up full-fledged corporate communications and public relations as well as strategy and research divisions.

“We have managed to recruit people within a short time. We like to draw from people with a vision for the industry and also consumers themselves who can give us the feedback on what is lacking,’’ said Chuah.

The aim is to constantly upgrade against international standards. “We want to do research on how the more advanced jurisdictions are doing and liaise more with Bank Negara on their vision,’’ she added.

The ABM is the chair for inter-regional relations under the Asean Bankers Association, a grouping of 10 banking associations within Asean nations. Exchange visits are organised among member countries, with Australia being the probable destination this year.

“Given a year or two, we hope to become a reference point and model for success. We want other banking associations in Asean to look up to us in the same way as we look at how dynamic the British, Australian and US banking associations are,’’ she said.

The ABM is run on subscriptions (based on a small percentage of the asset size) from member banks. “Like a commercial entity, income received should match with activities which are designed to benefit the banking industry, our member banks and their customers,’’ said Chuah.


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