Analysis Of Singapore’s Banking Industry With Focus On Oversea Chinese Banking Corporation (OCBC)

Overview of Singapore’s Banking Industry

The paper will analyze the Singapore’s banking industry, and Oversea Chinese Banking Corporation (OCBC) has been considered as a brand of choice. It will develop a marketing plan which could be implemented by the organization. Singapore is among the top financial centers in the world due to its banking industry. The Monetary of Authority of Singapore controls the banking industry of Singapore.

Moreover, the fourth largest market of foreign exchange in the world is in Singapore after London, New York, and Tokyo. The paper will evaluate analysis of company and competitor’s, marketing strategies and formulation of policy, formulation of marketing strategy on branding and internal branding, product management, pricing management, distribution marketing, marketing communication management and implementation and control of OCBC

Company Analysis

Overseas Chinese Banking Corporation is a public listed financial institution with its head office in Singapore. It was formed in 1932 through the consolidation of three banks such as the Chinese Commercial Bank Limited (1912), the Ho Hong Bank Limited (1917) and the Overseas Chinese Bank Limited (1919). Lee Group of Companies is the largest shareholder of this bank, in spite of being publicly listed (Awanis, 2017). Lee Kong Chian and his son Lee Seng Wee were the chairmen of this bank in the earlier 1930s and 1990s respectively. It is recognized to be the oldest local bank of Singapore with the assets of more than 224 billion SGD. It became one of the largest banks in South East Asia by expanding its operations in the subsequent years.    

Competitor Analysis 

The top competitors of Oversea-Chinese Banking Corporation are DBS Bank, Standard Chartered, HSBC, UOB, HSBC, Citigroup, BEA, Axis Bank, ICICI Bank, and UBS (Cheng, Zhao & Zhou, 2016). Altogether, they have raised more than 6.8B between the estimated 812.7K employees. It is ranked 6^th among its top 10 competitors in its quarterly and annual revenue. Considering its employment history, it is listed in 7^th among its top 10 competitors. Given this, its top 3 competitors are:

• DBS- It was founded in 1968 and has headquarters in Pathumwan in the Bangkok province. Operating in the banking industry, it generates less revenue by $7.2B as compared to OCBC and is one of its top competitors.
• UOB- It is the top competitor of OCBC. It was founded in 1935 and has is headquartered in UOB Plaza 2. It generates lesser revenue in comparison to OCBC by $985.1M
• Standard Chartered- It is recognized as one of the fierce competitors of OCBC and was founded in 1969. It has its headquarters at London in England and generates high revenue than OCBC by 96%.Marketing Objectives & Strategy Formulation – STP 

Objectives Related To Company Analysis

The marketing objectives of OCBC are as follows:

• To set targets for the promotion of its products and services to potential customers
• To achieve the overall goals of the bank
• To provide information about the product, increase the awareness about its product among its targeted customers, and reduce customer resistance to purchase its product

Marketing Strategy

OCBC has adopted an event-based marketing strategy and a people-powered content marketing strategy. The event-based marketing strategy of the bank is determined by as information warehouse which checks the activities of the customers in branches, call centers, online networks, and other channels. The people-powered content marketing strategy by FRANK, one of the brands of OCBC concentrates on exposure gain, attract new clients and give resources to the current clients. The people-powered content marketing strategy has drawn lots of youths especially the Millennials which is a promising group and have high buying power.

STP And Rationale Based On Marketing Strategy

OCBC has increased its overall marketing output, and the total number of its marketing campaigns has reached 1,200 in a year, which is 12 times more than before installation of IBM EMM (Yeung, 2017). OCBC found that the Millennials has more interest in curated posts which are connected to financial advice, lifestyle, events, and news that are posted in the social networking site. The content of a Facebook page of OCBC was designed to deliver information on financial knowledge, advice on the selection of lifestyle, and social-related content to enhance the customer engagement and observe their interests in present situations.

Analysis of Industry Competition

SWOT

Strengths	Weaknesses
· OCBC Bank is the largest bank in Singapore in terms of market capitalization. · It has the highest credit rating in Singapore. · It has a high level of customer satisfaction and the ability to perform well in new markets (De Leon & Donoso, 2017).	· Regarding global presence, it is the smallest bank in Singapore. · It is highly dependent on Singapore and Malaysia. · It has limited success outside the core business due to which it faced challenges in shifting to another segment of products.
Opportunities	Threats
· It has a considerable chance of expansion in emerging economies like India and China through acquisitions. · New trends in the consumer behavior open a new market for OCBC Bank. · There is a growth in retail banking and commercial banking due to the increase in private consumption and spending in the Far East.	· Development of new technologies by the competitor or market disruptor is a significant threat. · The bank is severely affected because of regulatory changes across the world. · Due to decreasing investments in Malaysia and Singapore, the bank has a severe effect.

Marketing Strategy Formulation – Branding & Internal Branding 

Appropriate Objectives of Brand Management

To realize the needs of the target audience for more content related to lifestyle, FRANK has introduced several content list, with the objective of guiding the Millennials. The making of content marketing theory by OCBC is hugely depended on the willingness of bank in hearing their customers and align their content with the present trends, which are popular among their targeted audience.

Tactics for Managing the Brand

The content marketing team of OCBC has implemented the look and texture of hipster art for the products of FRANK with the help of photography infographics, and design layout. The bank has continued to maintain a group of an active audience on their Facebook page, which was created on three main methods of engagement. It was found to be the most exciting theme to their targeted audience. OCBC found that the Millennials has more interest in curated posts which are connected to financial advice, lifestyle, events, and news that are posted in the social networking site. The content of a Facebook page of OCBC was designed to deliver information on financial knowledge, advice on the selection of lifestyle, and social-related content to enhance the customer engagement and observe their interests in present situations.  

Rationale for Tactical Approach

In the year 2011, OCBC had made a people-powered content marketing strategy by hearing the demands of the customers.  FRANK cards of OCBC offers more than 100 designs of cards to the customers. The FRANK cards also help the customers to obtain discounts at different online shipping sites.  Taking the hint from the popularity of burgeoning from the hipster culture of Singapore during the time of its launching, FRANK of OCBC has analyzed the trends of youth’s lifestyle and young professionals and consequently designed the content (Gupta & Xia, 2018). OCBC aims to spread the information that FRANK is not only about credit cards, and the bank wants to share stories which are appropriate to the people.

Product Management

Appropriate Objectives of Product Management

Objectives of product management

• To design excellent strategies for products offered by OCBC Bank
• To identify various marketing opportunities for services and product
• To formulate new strategies considering different stages of the product lifecycle
• To innovate new ideas relating to new products

Tactics for Managing Product

• Knowing the market and its demand which can be done through a comprehensive SWOT analysis or marketing mix model.
• Giving an extension to the product by offering a guarantee, warranty services, and discounts.
• Making a regular assessment of the requirements and needs of the customers for their satisfaction.
• Promotion of the products in a proper manner through effective sales and advertisement.

Rationale Provided For Tactical Approach

Development of tactics for managing the products requires much time, resources and commitment of highly experienced personnel. It helps in focusing on the relevant things and allocation of resources to such activities resulting in huge benefits. Moreover, it should take care of the critical issues of the product so as to strengthen the position of OCBC in the market.

It creates a forum in the development of a shared vision. It also produces an understanding of the complex and dynamic processes among the employees, pressurizing them to deal with such methods effectively and get success (Koh, 2018). It provides a platform for the measurement of the performance and creates a collaborative environment. It helps to maintain a proper balance between the expense and revenue. Further, it recognizes the effects of changing the business environment on the bank, thereby taking adequate steps to gain a competitive advantage.

Dominant Economic Features

Pricing Management

Appropriate Objectives of Pricing Management

The objectives of OCBC are as follows:

• To develop an information-based and customer-focused pricing strategy of the bank  
• To in be a better position to utilize the pricing as its competitive benefit through different segments of market and client and also the whole collection of deposit, loan, and products and services of the transaction    

Tactics for Managing Pricing

The pricing strategy of OCBC has aligned with a valuation of their products and services by different clients. The bank has replaced their traditional pricing strategy with a holistic information-based approach which consists of demands, behaviors, preferences, buying patterns, and costing sensitivity of the customers.

The information-based and comprehensive pricing strategy of OCBC has created more value than the bank alone could get from reducing its variables and fixes prices or maximize its volume. OCBC is an experienced partner of customers in cash management, and they understand the significance of increasing the liquidity for its businesses through its cycle of cash conversion. The bank has correct solutions for its customers while offering current operational capital by providing efficient solutions for receivables management or payables methods for engineering.     

Rationale for Tactical Approach

OCBC has estimated S$1,000,000,000 or 4% was for its Capital Securities and will be first callable in the year 2023 under the Programme of Global Medium Term Note. The budget of this Programme has been estimated to be US$30.   The Capital Securities has been proposed to qualify as capital of OCBC in the Additional Tier 1 under the Monetary Authority of Singapore (MAS) (Krishanan et al., 2016). The total profits from the Capital Securities would be utilized for the overall business purposes of the bank.

Distribution Management 

Appropriate Objectives of Distribution Management

The objectives of the distribution management in OCBC are as follows:

• To offer a variety of products and services wealth management to customers like, products of bancassurance, deposit products, and customer loans like home loans, car loans, personal loans, and credit cards.
• To give complete financial services to big firms, financial institutes, government organizations, and small and medium-sized enterprises (SMEs)

Tactics for Managing Distribution

OCBC has many distribution channels to the market for its customers. The distribution channel of the bank is a path to provide the products or services of the OCBC to its customer. The distribution channels are branches, call centers, ATMs, online networks, portals, and net banking (Yamaguchi, 2018).

The bank has been gaining the rewards of multiple-year change in the customer-based retail bank with the help of IBM Enterprise Marketing Management (EMM). The event-based marketing strategy of the bank is determined by as information warehouse which checks the activities of the customers in branches, call centers, online networks, and other channels. That information is extracted regularly to find out the unusual action of the customer, on the basis of a large number of fixed clients signify huge transactions, reducing the frequency of the customer’s spending and redemption of first rewards.  

Rationale for Tactical Approach

OCBC operates through different distribution channels with the expectation that the customers can carry on their business through online or phone. It has been noticed that the customers mostly prefer branches (Wahyudi & Azizah, 2018). OCBC has made significant investments in the development of online services. It has led to a growth of the usage of the net and mobile banking, as well as the ATM.

Integrated Marketing Communications Management

Appropriate Objectives of Marketing Communication Management

The objectives of OCBC are as follows:

• To understand better outcomes from its campaigns of general mass marketing, reasons for losing opportunities of revenue and compromise its market position in high competitive banking market of Southeast Asia
• To develop an appropriate strategy for communications in the bank in the perspective of the client’s expectations

  Tactics for Managing Marketing Communication

OCBC, one of the largest banks in the market of Singapore is winning the business and loyalty of fickle- minded clients with its personalized marketing communication strategies at each touchpoint, which is increasing the cross-selling and creating long-term relations. The bank has been gaining the rewards of multiple-year change in the customer-based retail bank with the help of IBM Enterprise Marketing Management (EMM) (Lai & Tan, 2015).  The bank has transformed from general marketing into organized and personalized marketing communications over ten channels of communications and touchpoints which consists of emails, branches, call centers, ATMs, text messages and net banking from 3G mobile (PY Lai & Samers, 2017).

Market Space Analysis

Rationale for Tactical Approach

The bank is explicitly targeting its clients on the basis of their activities, with an increase in its main metrics by double digit and triple digit from the time when the program was introduced in the year 2005. Return on Investment (ROI) was achieved by the bank on its application of its IBM EMM in 18 months. The bank is also close to double-digit increment in cross-selling with the help of marketing solutions of IBM, with its increment almost 40% for some of its campaigns (Sinha, 2017). Moreover, the revenue of the bank has seen triple digits increment percentage which is 417%, while the cycle of the campaign has decreased to 40%.   

Implementation & Control

Identification of an Implementation Plan

To attain better future development is to provide motivation to the banks to add their IT systems at a local level. OneSIBS Programme has been implemented by OCBC in recent times in order to regulate and incorporate its main banking process and IT infrastructure all over Singapore and Malaysia (Syadullah, 2018). The aim of the project is to simplify the planning of OCBC, provide benefits in collaboration and client-centricity and create a base for more incorporation of systems in its local offices.

Responsibility for Implementation

The senior management of OCBC has the responsibility for implementing strategies and plans which are approved by the Board of Directors. They help in developing the methods which identifies, deals, observes and controls risks of the bank. They also maintain an internal control system of OCBC which clearly allocates responsibility, power and report relations (Tsui-Auch & Yoshikawa, 2015). They make sure that given responsibilities are efficiently carried on, establishes internal control strategies, and checks the capability and efficiency of the internal control system of the bank.

Cost, Measurement & Effectiveness

The Board of Directors and senior management directs the bank to efficiently control the bank’s management. It gives importance to the needs of the employees, current investments in banking methods, regularly examine and improve the strategies and systems of bank’s management (Wong et al., 2014). It is done for constant implementation, covered with a stable environment internal management all through the bank.

Control Measures

The aim of risk management in OCBC is the protection of its capital and financial security by recognizing, measuring, and controlling the potential effect of risk of foreign exchange in the bank. The bank has efficiently controlled their chance with the help of hedges and investments of funds in international exchanges so that the bank could reduce the potential adverse effect on OCBC (Wong, 2017).

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