While Cambodia’s crowded banking sector has enjoyed strong growth, the majority of consumers surveyed have cited dissatisfaction with banking services as a main impediment for the sector’s confidence and future growth.
A representative survey presented at the eighth annual Banking and Microfinance Awards on Friday showed that 70 per cent of consumers believed that overall service was lacking. The study focused not only on day-to-day branch service – which scored low for staff quality – but also ATM infrastructure and digital banking capabilities.
“Banks need to serve the people and teach them how to spend, invest and save smarter,” said Tam Le, CEO of International Data Group ASEAN, the event’s organiser.
While the survey said that call centre services could help alleviate some of the frustrations, most people claimed that when they entered a branch with a particular question, the staff was unable to provide assistance.
“Branch services are not knowledgeable,” said Le.
“For example, if a customer wants to upgrade a card from debit to credit to increase online payments, the customer service doesn’t have the answers for that process.”
Staff quality was not meeting customer expectations, Le told bankers attending the conference in Phnom Penh.
“The human resource power is lacking,” he said.
“You need to train people to be able to provide better services. The banks in Cambodia need to think of consolidating their customer services and training operations.”
The study noted that customers want banks to not only upgrade their ATM infrastructure, but also to make sure the machines are well stocked with cash.
Tom Mizukoshi, chief IT officer for Forval (Cambodia), a company that provides technical support and maintenance for the banking sector, explained that banks need to put large investments into scaling up human resources – something that they are often reluctant to do.
As an alternative, he said banks could either consolidate services or outsource the majority of banking operations. “Consolidating allows for faster sales and more accuracy, he said.
“And it frees up existing sales staff to give more time to customers.”
This, Mizukoshi added, is instrumental for retail bank penetration into rural areas, a sector long dominated by microfinance institutions.
“To me, wherever a bank has a potential customer, they need to go to them,” he said. “It doesn’t matter how far away they are.”
Thorsten Neumann, managing director of SmartPesa, a Singaporean financial services company that made its mark by penetrating untouched areas of central Africa, explained that the number of branches and ATMs in a country is a direct correlation of financial development.
“There are 2,380 ATM machines and 1.5 million cards in circulation [in Cambodia.] That’s a lot of cards, but it also means you can’t really use them anywhere,” he said, arguing that customers here are “completely under-banked”.
Neumann added that with Cambodia’s current infrastructure, retail banks would have to play a waiting game before they could reach full market potential.
“What that means is that Cambodia needs to urbanise before it can benefit from financial services,” he said. “So the real question is how to leapfrog the infrastructure problem.”
He proposed an agency banking solution, where third parties can handle services with limited costs, but which can provide a full list of financial products.
“[Banks] may have a lot of customers, but they have no personal interactions. This is one reason why I say that if you use the current banks and agency banking, you can create those relationships,” he said, adding that this would help build financial literacy.
“The solution is to employ third parties that can handle your services with limited costs,” he added.