OCBC revamps mortgage process

http://www.businesstimes.com.sg/sub/...37897,00.html?

Published June 17, 2009

OCBC revamps mortgage process

By CONRAD TAN


OCBC Bank has changed the way it sells home loans, as part of a broader move to revamp the way that its sales staff deal with customers, reflecting the way in which the industry is reshaping itself after being hit by complaints over the sale of unsuitable products.

Gregory Chan, head of secured lending at OCBC, said that the changes - which include sending sales and marketing staff for refresher training and rewriting sales documents in simpler language - will be rolled out in stages for various types of products that the bank offers to consumers, including customers of its wealth-management business.

'We have taken it upon ourselves to review the marketing strategies and processes for all our products and services,' he said.

The bank is also finalising a review of how it pays sales staff. The remuneration structure is 'still being reviewed, it's not changed yet', Mr Chan said. 'But we expect to see some changes in the near future.'

Under its existing pay structure, a portion of the commissions that sales staff earn is retained and paid out only once a quarter. If there are 'certain lapses or complaints', part of the retained pay is forfeited, Mr Chan said.

He declined to reveal what proportion of pay is typically retained now, but said that 'it's significant enough to be painful' if lost due to unsatisfactory performance.

That deferred portion of pay is likely to rise as a result of the compensation review, he added. 'The idea is to move away from the direct relationship between sales and remuneration.'

The bank's streamlined mortgage sales process was introduced at the end of February, after its staff responsible for selling mortgages had been put through a refresher training course and had sat for an in-house certification test. Those that did not pass the test were reassigned to work elsewhere in the bank, Mr Chan said.

The certified 'mortgage specialists', as the bank calls them, are expected to take a customer through a detailed analysis of their financing needs for a property, before they sign up for a particular home loan product. The response from customers to the revamped sales process has been positive, Mr Chan said.

At rival DBS Group, which also introduced changes to the way that it sells products early this year, consumer banking head Rajan Raju said that 'customer feedback has been encouraging', despite the customers having to sit through a more detailed sales process.

Kevin Lam, head of sales and distribution at United Overseas Bank, said that the bank's training for its sales staff and relationship managers places emphasis on their ability to communicate with customers and help them make informed decisions.

http://www.straitstimes.com/Money/St...ry_391368.html

June 17, 2009 Wednesday

OCBC rolls out better sales services

Home loan data now easier to understand and staff training has been enhanced

By Francis Chan


HOMEBUYERS can now expect better and clearer information from OCBC Bank when they apply for a housing loan.

The bank announced yesterday that it has enhanced the way it markets mortgages in the light of recent scrutiny of financial institutions and their sales tactics.

Key changes include boosting the certification standards of staff, especially mortgage specialists, and providing easy-to-understand information so customers can make better-informed decisions.

Mr Gregory Chan, OCBC head of secured lending, said last year's events have changed the banking landscape, especially the way financial institutions market their products and services. 'While OCBC Bank had successfully avoided selling toxic products, we have taken it upon ourselves to review the marketing strategies and processes for all our products and services and understand how we can instil greater customer confidence and trust,' said Mr Chan.

The enhancements are part of a review of the way loan and investment products are sold, which started last September after the collapse of United States investment bank Lehman Brothers. Thousands of retail investors here suffered huge losses and many complained that they were mis-sold investment products linked to the US bank.

The outcry led to a shake-up initiated by the Monetary Authority of Singapore to weed out shoddy and aggressive merchants in the financial services sector.

In March, the MAS released a draft consultation paper on what is acceptable practice and what crosses the line into mis-selling and deception. Key findings of the White Paper are expected to be released from the second half of the year, industry sources said.

In the meantime, many financial institutions have initiated reviews of sales processes and staff behaviour.

OCBC is believed to be the first local bank to introduce a new blueprint on how it deals with bank customers, starting with its home loans. Only staff who have completed a stringent in-house certification course will be permitted to advise clients on home financing options.

Customers will also need to undergo a thorough financial needs analysis by an OCBC mortgage specialist before a loan application is accepted.

After this analysis, the customer will receive a summary giving details of key information such as the interest rates, payment schedules and proposed loan structures to help them decide.

Mr Chan believes the enhancements will help customers better understand the financial impact of their decision instead of just appealing to them with lower interest for loans. 'The idea is guidance and transparency...rates alone don't tell you the whole story,' he added.

Mr Chan said OCBC will soon introduce other enhancements in the 'highly-watched' investment products space. These will include changes to its sales compensation structure that are expected to be in line with MAS recommendations.

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The changes

# All OCBC mortgage specialists will have to undergo intensive training and be tested before being certified to advise customers on home loans.

# Using the new OCBC mortgage blueprint, home loan customers will be guided through a thorough financial needs analysis.

# A customised summary with details and key information on the proposed loan structure will be given to investors to help them make better-informed decisions.