In Cambodia, personal banking services are expanding and customers are increasingly expecting more out of the institution that handles their money. One of the key players in the country is ANZ Royal Bank, a joint venture between Australia and New Zealand Banking Group Limited and Cambodia’s Royal Group of Companies. Anne Renzenbrink sat down with ANZ’s managing director for retail banking in the Asia Pacific, Sanjoy Sen, to get a fuller picture of retail banking.
Where would you say Cambodia stands compared to other ASEAN countries?
If you look at our ANZ retail business in the Asia Pacific, we can cluster the countries into some markets which are very evolved and developed, such as Singapore, Taiwan and Hong Kong. I would put Cambodia as a very strong emerging market. It is a strong area of focus for us. From a retail perspective, I think that consumer spending in Cambodia is significantly lower and lags behind other ASEAN markets. Spending on groceries, jewelry, travel, tourism, vehicle purchases, it’s growing, but it’s still behind markets like Indonesia by significant proportions, not just 10 per cent behind, but multiples behind.
What about the level of progress in the sector? Where can improvements be made?
There has been robust GDP growth, a young population, people are getting more educated and employment levels are high. Where there is less progress is investment in infrastructure, which is really something that spurs the growth of the economy. The percentage of people that are banked in Cambodia is significantly lower and lagging behind many other markets. Cambodia still has to make progress when it comes to equity markets, stock exchange, wealth management products and insurance. These are very basic products. We are getting there, but still steps behind.
How will ANZ try to steer its customers into plastic rather than keeping cash under the pillow?
This is very much a cash economy. As in many of the emerging markets, people are very wary about using credit cards. Our role as pioneers is to educate customers and increase the usage of cards, explain to customers that cards are actually a convenient way of paying, rather than using cash. Because whether it’s cards, whether it’s opening an account, whether it’s giving loans, whether its mortgages, you have to build trust.
How would you compare the challenges of the more developed markets with Cambodia’s?
Let’s take, specifically, challenges between Indonesia and Cambodia because we have a large retail business in Indonesia. The revenue pool in Indonesia is much bigger because all product lines are there, there is investment, there is insurance, there is a stock market, mutual funds. The challenge is, because the revenue pool is bigger, there is that much more stiff competition. In a market like Cambodia, we have a leadership position. And when you educate the customers in that process, customer loyalty is easier achieved than in places like Indonesia because there are so many choices there and the customers are so savvy that they keep switching. To get customer satisfaction is tougher; to get loyalty from customers is tougher. Another challenge is that the customer’s expectation benchmark is much higher. You cannot in any of those other markets expect the customer to wait for 45 minutes to withdraw money. Here, you can.
What do you expect will happen to the retail banking sector and the banking sector in general in Cambodia?
Banking penetration has to go up. More and more people will open bank accounts, companies will refuse to pay by cash. As wages increase and salaries increase it will be important for people to have bank accounts. At the same speed as banking penetration goes up, I think there will be a leapfrog effect with the internet and mobile revolutions, and that’s what I’ve seen in emerging markets. Because there are customers that have [a] mobile but they don’t have a bank account. In the past it was a very step by step process. The customer would first go to the branch, then get educated about internet or how to use a mobile. I think in a market like Cambodia, retail banks with strong internet and mobile strategies will be successful. That’s part of our strategy too.
This interview has been edited for length and clarity.