MIOR SAIFUL AZWAN BIN MIOR SAFIAN

Objectives

The completion of such module, the purpose is for:• Recommendation and solutions will be

provided in strengthening weak points identified in BP 1

• The application of BSC and BI in rectifying and improve ineffectiveness of company at hand

• Company’s total profit will be projected for 5 years through forecasting

Company Overview

• Affin Bank Berhad (AFFINBANK) is an established banking and financial institution in Malaysia and fully operated as Bumiputra company

• The company are involves in providing services to public and private sector in terms of financial intermediate and investor. Since its incorporation in 2001, AFFINBANK has provided Malaysia with vast services in various banking sector such as Enterprise Banking, Consumer Banking, Debt and Capital Markets and Hire Purchase.

Vision

• A premier partner for financial growth and innovative services

Mission

• To provide innovative financial solutions and services to target customers in order to generate profits and create value for our shareholders and other stakeholders.

Company Background

• Affin Bank Berhad (AFFINBANK) commenced and incorporated in 2001 following the sequence of event, a merger between the former Perwira Affin Bank Berhad and BSN Commercial (M) Berhad in August 2000.

• In June 2005, it merged with the former Affin-ACF Finance Berhad. Affin Bank Berhad is the wholly own subsidiary of Affin Holdings Berhad.

Problematic Areas: Strategic MarketingAREAS ISSUES

PROMOTION 1) The marketing or promotion strategy that AFFINBANK strategize can be considered as weak as compared to other financial institutions, in this case:

• promotional efforts are only focus on advertising through their official website and the placing of bunting at AFFINBANK’s various branch. Thus, the communication of such promotions are not made in large scale

• The web design is also an important tool in marketing AFFINBANK brand awareness. The issue that lies in its web design are too simple and dull

• Loyalty programs or rewards especially debit card users

Problematic Areas: Strategic Marketing

AREAS ISSUES

STRATEGIC BRAND MANAGEMENT 2) In the case for AFFINBANK, its brand awareness or exposure as compared to other local banking institutions can be regard as weak. The reasons is as below:• Promotion efforts that are weak• Low market reachability due to lack of

branches and ATM machines at strategic locations

• AFFINBANK market priority mainly for government sectors

• Customers perception on AFFINBANK as a small banking institution

Problematic Areas: Strategic Marketing

AREAS ISSUES

MARKETS AND COMPETITIVE SPACE 1.1)Customer Focus• AFFINANK main focus lies with government

sectors. This is mostly probably its political connection and attractive rates that AFFINBANK provides to the government sector. Political connection here means that, AFFINBANK major shareholder is LEMBAGA TABUNG ANGKATAN TENTERA (LTAT) which might benefits AFFINBANK in serving for government sectors

• However, this one side focus by neglecting other institutions such as private sectors would prevent AFFINBANK to be widely recognised in corporate banking and will not be the brand to be considered when private sectors doing transactions such as fixed deposit placing or investment.

Problematic Areas: Strategic Marketing

AREAS ISSUES

MARKETS AND COMPETITIVE SPACE 1.2)Competitors• Due to its nature of business where other

banking institutions are also offering to individual and corporate customers similar products and services have create intense rivalry among banks.

• The existence of many banking institutions have also established vast options for clients to choose which service provider that they will prefer and normally they will go for a well-established and strong brand image.

• Large marketing efforts by rivals has overshadowed AFFINBANK position in the industry

Problematic Areas: Operations Management

AREAS ISSUES

BRANCH/CHANNEL OF NETWORKS 1) In the case for AFFINBANK:• The lack of adequate and sufficient network

of branch has cost this banking institution its brand equity in this particular industry. As for example, AFFINBANK branch nationwide is 100, CimB Bank is 362 and Maybank is 401. Thus, we can see the difference in total size of networks of AFFINBANK relative to its competitors.

• AFFINBANK ATM machines are also limited in its reachability. As for comparison, AFFINBANK ATM locations in the federal territory are only located at 18 places, but as for other banks such as Maybank, it has 52 location of ATM in federal territory and for CiMB Bank are 48

Problematic Areas: Operations Management

AREAS ISSUES

STRATEGIC MANAGEMENT 1) Based on financial ratios that have been calculated earlier, AFFINBANK can be summarizing as a moderate risk taker in using their assets in generating profits. As the calculation for Return on Assets signifies the uses of AFFINBANK assets has been consistently in the range of 2% from 2007 until 2012. There are no sign that AFFINBANK been aggressive in making optima decisions to gain more economic performance.2) Apart from numerical data, other factors that resemble such similarities of moderate risk taker is the investment that AFFINBANK made in expanding their business operations or increased their market penetration despite having large total assets and revenue growth on yearly basis.

Balance ScoreCard (BSC)

• Predict future financial performance rather than simply report what’s already happened.

Affin Bank Berhad BSC Framework

Steps to Achieve BSC Objectives

• Product Bundling• Community Marketing• Improve Income• Grow by Acquisition• Grow by Expansion• Grow by Partnership• Grow Organically

Rationalization of BSC to Create Customer Values

• Customer• Processes• Channels• Products• Services• Efficiency• Capital Optimization

Business Intelligence

• Made up of several related activities, including data mining, online analytical processing, querying and reporting.

• Improve decision making, cut costs and identify new business opportunities.

Implementation of BI to Affin Bank Berhad

• Customer Profitability Management• Financial and Operational Performance

Management• Profitability Management• Credit Analysis• Regulatory Compliance• Operations Management

Financial Forecast (Projection of Profit/Sales)

Seasonal Variation Pattern

Financial Forecast (Seasonal Variations)

Quarterly Pattern

Financial Forecast (5 Years Profit)

Conclusion

• In the short term, I am optimistic with the healthy expansion of Malaysia economic growth complement with the increased number of high earners and low inflation that can provide AFFINBANK a thrust to move on, in expanding their business operations

• In the long perspective, it is crucial for Affin Bank Berhad to expand it market growth and keep innovate banking products that suits the customers. By doing that, it needs to rectify any ineffectiveness and inefficiency in its business processes and be progressive.