1. The perceptions of Bankers and Corporate Customers when Considering Loan Selection Factors between Banks in Thailand

2. Scope of the Presentation Introduction Need for this paper Objectives Research question Research methodology Data analysis Finding results Implications Conclusion Limitation Further research

3. Introduction The bank selection become important issue: -High competition in banking industry -Few survival of good customers -Multiple banking behavior “Bankers should understand clearly the behavior of corporate customers for selecting bank borrowing (loan) in case of receiving similar offers from many banks”

4. Need for this research -Mainly conduct in USA,Europe( few in Asia) -Inconsistency result -Few research on banker’s perspective -No research to do across two industries -No research to compare perspective of bankers and corporate customers in Thailand -Fill the gap: research corporate customers and bankers’ perspective across two industries

5. Objective To find out what factors are important for corporate customers from both manufacturing and service industries on bank selection decision for loan. To design an appropriate marketing strategy to attract target customers To develop bank selection model

6. Main Research Question “Are customers’ perspectives the same as bankers’ perspectives in terms of bank selection in Thailand?”

7. Research Methodology Method In- depth interview (Personal) Sample Fifteen bankers Minimum 5 yrs direct contact to customers (Private bank 5,Stated bank 5,Hybrid bank 5) Sixteen corporate customers Minimum 5 yrs direct contact to bankers (Manufacturing 8, Service 8)

8. Research Methodology Interview process Pilot interview Prefer individual interview First interview Identify factors / sub factors Second interview -Develop sheet listing all factors /sub-factors -To make priority ranking all 14 factors From rank 1 most important to 14 least important -Choose top three sub-factors, make priority ranking From rank 1 most important to rank 3 least important

9. Finding Results First interview (14 factors) 1 Attractive offering 9 Personal relationship* 2 Good relationship 10 Bank’s ownership* 3 Service quality 11 High Technology* 4 Speed of approval 12 Package* 5 Lending policy 13 Recommendations* 6 Quality of RM 14 Bank merger* 7 Branch facilities 8 Bank image * New factors received from the interview

10. Finding Results First interview (Sub- factors) Attractive offering Service quality -Interest rate/fee -Efficient and accurate -Amount of facility -Personalized & flexible services -Payment peroid -Find new way to solve problems -Un-complex covenants -Value added services -Collateral -Full banking services Good relationship Quality of RM -Easy access/close contact -Know customers’ business -Help in emergency -Professional advice -Relationship to management -Confidentiality -Contact frequency -Effective communication

11. Data Analysis Each factors receive different ranking by the frequency of the number of respondents selected Each rank is given a weighted score by the first rank is given the highest score at fourteen as the most important an continuously decreases one score as the least important. The weighted score for each factor is derived by multiplying the frequency of respondents and weighted score of each rank. Each score will be summed resulting in total weighted score represent for each factors

12. Data Analysis Rank 1 2 3 5 6 7 8 9 10 11 12 13 14 Attractive offering Weighted score 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Frequency 11 3 2 - - - - - - - - - - - 154 39 24 Total weighted score 217 Good relationship Weighted score 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Frequency 3 3 - 5 1 1 - 2 1 - - - - - 42 39 - 55 10 9 - 14 6 Total weighted score 175 Remark: Represent two important factors as example

13. Findings Results Important Factors (IF) Rank Bankers Corporate Customers 1 Attractive offering Attractive offering 2 Speed of approval Good relationship 3 Service quality Speed of approval 4 Branch facilities Service quality 5 Quality of RM Lending policy 6 Bank image Quality of RM 7 Good relationship Branch facilities

14. Finding Results Less Important Factors (LIF) Rank Bankers Corporate Customers 8 Lending policy Bank Image 9 Personal relationship Personal relationship 10 High technology Bank’s ownership* 11 Recommendations High technology* 12 Bank’s ownership Package* 13 Package Recommendations* 14 Bank merger Bank merger*

17. Implications Group1: Immediately to develop Speed - Shorten credit process -Set standard timeframe to measure performance -Decrease levels of authorization -Revise credit proposal form Service quality -Continuous training -Efficient bank process - update technology -Flexibility

18. Implications Group1: Immediately to develope Quality of RM - Continuous training to impress customers - Understand necessities of business - Promptly response / quick decision - Good judgement to solve problem

19. Implications Group 2: Need time to develop Attractive offering: profit from whole package Lending policy: increase credit facilities before requesting Branch facilities: increase outlet Good relationship: growth by contact /advice/ help Bank image: differentiate by building brand awareness

20. Conclusion There are differences when compare between bankers and corporate customers’ perspective. - Although there are the same six out seven factors from IF and LTF group, the ranking is difference. - Attractive offering is considered the most important factor for both side. - Good relationship is considered important by corporate customers(rank 2) while perceived less important by bankers’ perspective (rank 7). - Other important factors for both side are speed,service quality and quality of RM.

21. Conclusion - Two most important factors are attractive offering and good relationship - Bank can set appropriate marketing strategy New customers Transaction-oriented strategy (pricing) Existing customers Mixed strategy (transaction+relationship) -Better respond to customers’ needs -Increase satisfaction and loyalty -Become main bank

22. Limitation Limit sample size – the result not generalized Exclude other influential factors: -economic situation, -legal enforcement, -political risk, -organization culture etc

23. Further Research Influence of emotional factors (cultural, social etc.)on bank selection in Thailand The effect of other influential factors (economic situation, legal enforcement etc) on bank selection The degree how corporate customers satisfy with the important factors