A consistent strategy developed by Baiduri Bank’s CEO of 15 years, Pierre Imhof, has enabled the bank to remain a leader and pioneer in Brunei’s financial industry.
The three pillars – corporate banking, retail bank- ing and consumer finance – are the foundations of Baiduri’s business model. “Even when one is a little bit affected by a recession or slowdown of activity, the other pillars were doing well and (have) allowed us to remain profitable and to continue to grow our market,” Mr. Imhof said.
Despite the limitations in size of the Bruneian market, Baiduri has constantly found new ways to expand their share by taking advantage of new ideas, technologies and products to modernise their services.
They were the first bank to introduce Internet bank- ing, the Visa payWave debit card and American Express and UnionPay payment card brands to name a few, but their proudest addition has happened behind the scenes.
“Another one we are proud of because the integrity of our customers’ data is at stake is the fact that we are the first and only bank to have in place a security procedure and environment, the Payment Card Industry Data Standard Security. It’s a recom- mendation imposed on us by our card brand, Visa and Mastercard,” the CEO explained.
Being a local bank and building their business from the ground up has allowed Baiduri to prosper, however, growth in the coming years presents a challenge.
“We cannot grow forever at even a rate of six, seven or 10 per cent when the GDP growth is much smaller, or sometimes negative in periods of crisis,” said Mr. Imhof.
“More recently, when it becomes more difficult, it’s easier to have a double-digit growth when it (a business) starts from zero. It’s more complicated when you are already close to the top,” he added.
However, a consolidation in the industry, where a number of banks have either shrunk or withdrawn their operations altogether, has presented Baiduri with an opportunity to develop their activities. “Some banks have left, others have decided to focus on certain markets, others are about to leave and in two cases we have acquired retail portfolios,” the CEO remarked.
“Unless there are other banks for sale, which I do not hope for as it is good to have a diversified bank- ing industry, we need to find other ways to grow our activity.”
Brunei’s financial regulatory body, Autoriti Monetari Brunei Darussalam (AMBD), made amendments to the Banking Order, 2006 regarding interest rates in May 2017, but thanks to the competitive nature of the industry, customers were already benefiting prior to the introduction of the new caps.
“We welcomed this move to deregulate some of the aspects of the banking environment, especially interest rates,” the CEO said. “For the majority of our customers, we were already well below the caps which were defined by the authorities. They were already benefiting from a competitive environment and from their high stand- ing to get good rates,” Mr. Imhof added.
Helping MSMEs in a BIGS way Micro, Small and Medium Enterprises (MSMEs) fall under Baiduri’s corporate and retail portfolios and account for 99 per cent or more of their commercial banking clients, according to the CEO.
Baiduri Internet Gateway Systems (BIGS) – an Internet payment gateway – was introduced to allow companies to manage their client’s payments online, whereby they are redirected to a site which securely processes the transaction.
In 2016, in a move to further support local SMEs, Baiduri launched MerchantSuite, which can issue invoices and accept card payments without the requirement of a website, and through social media.
A good problem Economic diversification is something which the Baiduri CEO welcomes and insists the bank is doing everything they can to support all the initiatives undertaken by the government.
Banks in Brunei have a lot of excess liquidity, according to Mr. Imhof, which typically is a problem but presents an opportunity by way of foreign direct investments (FDIs) coming into the country. “It’s a good problem to have a large base of depos- its, but if these deposits are idle and doing nothing, it doesn’t help,” he said. “To be able to use more of this excess liquidity to finance or to bring more financing offers to foreign direct investors is definitely something we are eager to do. We are keen to offer local financing to FDIs.”
Baiduri has meticulously vetted and selected prod- ucts and services which they believe will suit their Bruneian customers’ needs, and 2018 will be no different.
“Being a local bank with an international flavour, we have always tried to be as close as possible to our customers…and to pick up a wide range of products which can be developed all around the world, and directly correspond to the needs of our Bruneian customers,” remarked the CEO.
The digitisation of banking services remains a pri- ority, but Mr. Imhof insists that branch banking still maintains plenty of value today, particularly in a country which is still in the early stages of transi- tioning into a cashless society. “Digitisation and innovation is one of our major focus. We are working on a number of products and ideas which may enhance the customer experience. It may be in terms of direct digital banking, but you still need to use the branch network – the ATMs which are halfway to full digitisation – as we are still a cash-dependent society.”
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