Maruhan Japan Bank is the first-ever Japanese commercial bank to set up operations in Laos. The bank was established in the country in 2013.
The bank has won the International Finance Award for Best New Mobile Banking Application – MJ Saduak – Laos 2019.
The bank has introduced its new retail mobile banking app MJ Saduak which supports QR payments and provides access to ewallets for better banking services. In an interview with International Finance, CEO Anthony Chin discusses the current developments in Laos’ banking landscape, the role of Maruhan Japan Bank in the country and its plans for the next two to three years.
How does the Laos banking landscape look like? Could you please tell us more about Maruhan Japan Bank’s performance?
Laos is an emerging economy and is increasingly a prime market for banking opportunities in the Asean region. If you closely look at Laos’ banking landscape, there are about 43 banks catering to a seven million population. So I would say it is kind of crowded.
Competition is quite stiff for such a small industry. Laos is growing as an economy. By comparison, Laos’ GDP per capita is better than that of many countries in the Indo-China region. It has already surpassed $2,000 and that’s a lot higher than Myanmar in Cambodia which started developing a lot earlier.
It is a good indication in terms of growth but I think there is rising demand across the banking landscape. I think we haven’t reached an inflection point but I can kind of sense it. I’m from Malaysia and I have been in Laos for six months. Now the airport has at least eight cafes with a beer bar and an upcoming duty-free shopping zone which was lacking when I first arrived.
I am quite excited about March 2020 because we are a Japanese bank and there is going to be a direct flight to the south of Japan. As the Laos economy grows there will be more activities and travellers in the country, better productivity and rising demand for payments. With that, banks and non-banks will have a significant role to play.
The banks, microfinance companies and non-banks are trying to tap into the existing opportunities in the country with a seven million population. I think the market is going to get quite interesting. In the next two or three years, I think we will see a real demand for banking services.
That said, I am the CEO of Maruhan Japan Bank, which is a fully owned Japanese bank. We have established sister banks in Cambodia and Myanmar and their operations are quite large. However, in Laos we are quite young. Maruhan Japan Bank is only a few years old and we have embarked on our three-year strategy. So it’s really important and humbling for us to win the International Finance Awards in a short duration.
Why is it important for Maruhan Japan Bank to become digital?
Maruhan Japan Bank’s three-year strategic transformation can be attributed to our goal to become an established bank. We don’t need to be the biggest but we want to be the best in our core segments. As part of our three-pronged strategy, we want to achieve the following three key targets:
First, we want to be the most trustworthy bank in Laos. Being a Japanese bank, trust is our core principle. We don’t simply focus on integrity, compliance and governance but are very keen to establish customer trust. It is important to deliver services on time. Therefore, we not only want to be the most trustworthy bank but also seek to deliver the best customer experience. Our focus is to ensure superior experience during customer engagement — and this can only be achieved if we use technology wisely. For that reason, digital remains at the forefront of all our operations.
Digitisation is a necessity today. And if we don’t deploy technology in our banking operations and to serve customers — we will be overlooked soon enough. Today, customers across demographic groups seek instant gratification.
If you take a close look at going digital, it is really about serving our customers and community at large. In Laos, I think that is vital to what we do because it helps us create financial inclusion in provinces and regions that remain unbanked.
Of the seven million people in Laos, only about one million hold bank accounts. So technology and mobile data enable us to serve the unbanked. I have truly believed in the saying ‘Banking is transactional but money is emotional’. Although we are dealing with money, there are emotions attached and that’s why customer experience is key. I think digital customer experience and being trustworthy come together.
What are your plans for the bank moving forward?
We have big aspirations but it takes a lot of hard work to achieve them. We have already outlined our plans for the next one to three years in terms of what we want to build and deliver. This kind of growth must be sustainable and responsible. It should add value to the economy, community, shareholders and always be in line with the vision of central bank as well as regulators.
We will ensure that we make improvements in a step by step process. We have gone live with our mobile app called MJ Saduak. Saduak in Laos means simple. The mobile app went live in November. It is simple to use, download and enables users to make payments on-the-go. The mobile app enables QR payments and has an ewallet that allows customers to go to any of merchants.
Maruhan Japan Bank is swiftly expanding. We have also included a very simple chat bot to ensure customers can seamlessly contact the bank. The chat bot also includes a very simple financial management tool to help Laotians, consumers and customers learn about saving and investment.
Besides financial inclusion, we also want to improve financial literacy in the country. We plan to automate operations in our branches and enable a lot of simple processes so that more and more people can be a part of the banking community.
In the future, we aspire to work with partners who want to build an ecosystem. In turn, this will allow us to work with SMEs and businesses. We aim to establish a strong link between the bank, merchants, ecommerce players, businesses and regulators.
In a nutshell, we want to help customers achieve their dream of purchasing a car or acquiring a loan. What customers really seek is not a bank but services that can cater to their needs. That said, we are brainstorming on how to provide these services to customers in the two to three years.
Every quarter our customers expect to see a new service from us and that’s our plan over the next three years. While I talk a lot about customers, the environment and the community, another key focus is to build a very cohesive team with a common vision.
The bank has a very simple programme called cast which is in line with protecting the environment and spreading awareness. I promote a very open culture in the bank.
What are the challenges you anticipate and how do you differentiate Maruhan Japan Bank from its competitors in the country?
That’s a good question. It is quite hard to differentiate yourself in a highly competitive industry. For example, technology is a tool that has been deployed by everyone across industries today. It is as simple as buying a ten thousand dollar equipment and stating that “this is my latest technology to enable a new service” — and with that, your competitor will invest in a technology worth twenty thousand dollars. So the competitive advantage in this context is lacking.
A good example is ATMs. Customers no longer visit bank branches to withdraw money — and likewise, there is not much left to differentiate banks if their logos are taken away. So it simply comes down to how banking staff implement services, the quality of customer experience and the level of trust established.
We are working hard to build solid trust with our customers that will help to differentiate us from competitors. Today the banking industry is crowded and homogeneous. Currently, several foreign fintechs are launching ewallets in Laos stirring competition in the domestic banking and finance industry.
I hope the bank will deliver premium services to customers, and stakeholders in the next two to three years. More importantly, we want Maruhan Japan Bank to become the most trusted bank in Laos.