Bank to expand retail, draw more millennials

Security Bank led by its chairman, Alberto Villarosa (left) and ambassadress Megan Young (center) welcome its new president and CEO, Alfonso Salcedo Jr. (right) with a toast.
(CDN PHOTO/CHRISTIAN MANINGO)

Security Bank is eyeing to expand its retail banking business and tap the millennials.

Newly appointed bank president Alfonso Salcedo, Jr. said the bank has made several changes to be able to attract more millennials, or those born in the 1980s to early 2000s.

These include the launch of phone application Security Bank Mobile and improvement of their website design.

“We are able to cater to the older generation, who still like maintaining face-to-face banking business with our bank, and the younger generation, who do lots of things online,” Salcedo said in a press conference shortly before the bank’s customer appreciation party here.

The bank’s campaign tagline, “Better Banking,” speaks of the bank’s drive towards a “more personalized banking experience,” he added.

“We’re a smaller bank. I’d say that we know our clients better and are easier to talk to,” Salcedo said.

The growing retail banking sector, meanwhile, is expected to change the bank’s business profile.

Retail banking has the potential to generate the biggest business as it is sustainable, steady and not volatile at all, Salcedo said.

“It is also a lot more insulated than our two other pillars, wholesale banking and financial markets,” he added.

Salcedo said the bank will also tap the mid-income consumers who are looking to buy a home or a car, a market that isn’t dominated by bigger banks yet.

He said the mid-market or second-tier consumers are the bank’s “sweet spot” and is where they are trying to increase bank penetration in.

Only about 10 percent of those earning around P50,000 per month are served by banks, he said.

This segment can generate a substantial amount of business, he added.

Salcedo cited three imperatives for retail banking, namely, infrastructure, credit score in model, and sales and marketing. Of these, infrastructure is their “greatest worry.”

“Our infrastructure is still in development. It is not perfect and needs major work,” he said.

The bank targets to expand its network to 300 branches by 2016 from the current 256.

By the end of this year, they are hoping to put up an additional 4 branches.

Salcedo said they have identified sites in Northern Luzon, Batangas and Bicol region. Three more branches in Talisay City; and in Cebu City, along Escario street and Mango avenue are also being planned.

Sales and marketing is the least of the bank’s worries, he said.

“We believe that our sales and marketing culture is at par with the best in the banking industry in the Philippines,” he added.

Meanwhile, Salcedo said the financial crisis in Greece will most likely not affect Philippine banks.

“But if it worsens, maybe we will see the flight of emerging markets,” he said.

He said the Philippine banking industry is strong enough to withstand whatever fallout may happen from the Greek crisis.

The same assurance was made earlier by Bangko Sentral officials.

Challenges for the bank this year may be more internal, with the entry of at least five foreign banks into the Philippines.

While the growth of foreign banks may bode well for customers, this increases the competition among banks.

Salcedo was appointed president and chief executive officer last April 28, replacing  Alberto Villarosa, who was elected chairman of the board.

Frederick Dy was elected chairman emeritus.