PROMOTIONS OF CURRENT ACCOUNTS BY XACBANK FOR THE FIRST TIME IN MONGOLIA
Interview with Z. Bulgan, Director of the Small and Medium Enterprise Division
It is not an easy task to provide banking services to commercial entities and especially to Small and Medium Enterprises. Could you please provide us with a brief introduction on the activities of your business division?
Our bank has been providing products and services targeted to citizens and business entities since its establishment.
The needs of each client are not the same. For example, banking needs of business owners are different than those of individuals. There are many other differences such as frequency of using bank services, knowledge and information about the bank’s products and services, etc. Our division works with a focus on the SME segment of the market. Our main goal is to provide the best tailored bank products and services that fully meet the needs of business entities, especially SMEs. We try to forecast their future needs and develop new products and services that correspond to their future needs.
Each organization has a different type of businesses and areas of activities. It must be difficult to develop customer-tailored banking products and services that correspond to the individual needs of each and every business or organization?
Yes. As I mentioned, every client has their own unique characteristics and needs. Therefore, our bank has divided our client services into two major segments - small and medium entreprise and corporate. Lately, thanks to the robust economic growth in Mongolia and Government policy, the number of small and medium entrepreneurs has increased and they have become a main source of job creation.
There is an understanding that the banking sector can never be able to provide products that meet the business entrepreneurs’ needs at 100%. As for clients, they need a loan with longer term, lower interest rate and without any collateral, whereas, banks require conditions that have higher collateral and shorter term. So how do to reach into the agreement that is acceptable for both sides?
As for loan products, the items that you mentioned come up inevitably from the client’s side. But nowadays Mongolian commercial banks have become more flexible and can provide long term loans with lower interest rates than before. As for our bank, we offer more competitive conditions to our clients than other banks and we provide financing either from our own funds or by enrolling our clients into international projects or programs, which provide more suitable financing for their business. Depending on the client’s business needs and the products desired services can be uniquely developed for the individual business client. For example, one client may need a loan, while another needs payment and settlement services. Furthermore, depending on the sector of the economy, the relationship of the client with the bank is different. For agricultural businesses, which have a seasonal nature, the loan needs rise during the spring planting and fall harvesting seasons. Whereas exporters or food processors have different financing needs. Thus, classifying the clients depending on their needs and providing the client-tailored services is the art of our work.
Your bank recently launched a new service called XacLoyalty for your commercial clients with current accounts. Could you give us some information on this?
Our bank has recently launched several new and innovative promotions, campaigns and programs for our clients. The XacLoyalty program is a continuation of these efforts, and this is the first program among the commercial banks in Mongolia. XacLoyalty is a promotional program designed to support organizations that have accounts and handle settlement transactions with our bank. It is the right thing to do to promote organizations that have entrusted XacBank with the settlement of their payments for many years. So in the scope of the XacLoyalty program, current account holders have an opportunity to participate in the program provided they have a minimum balance in their XacBank account of at least one million Torgrog and at least 8-10 incoming payments or deposits per month. If they meet these criteria then they qualify to participate in the program. If an organization has several accounts in either Togrog or US dollars then each account will be earning points in the program.
I see that this is quite a good program. You mentioned that each account with one million Togrog will earn points. Could you give us more details on this?
The points will be earned depending on the account balance and transactions made. Based on the points earned, discount coupons will be given to the account holder. The points earned can be used for discounts on products and services from us as well as from our partner organizations, Sain Computers and Modern Nomads restaurant. One of the advantages of the coupon is that you can present or transfer it to someone else. We provide discounts on average of 300,000 Togrog quarterly and up to 1.2 million Togrog yearly.
How distinctive is the “XacLoyalty” program from other similar promotions and programs implemented by other commercial banks?
In general, the campaigns and lotteries implemented by other financial institutions are organized within a specific period of time and end after that. Whereas, our bank’s XacLoyalty program is unique because of its sustainability and long duration. In addition, both our new and existing clients can participate in the program and have an equal opportunity to benefit from the promotion. XacBank is distinctive in the financial market in Mongolia by implementing such customer loyalty program for the first time.
How popular is such a new program as XacLoyalty internationally?
In general, earning points, coupons, discounted services using coupons and a bonus system are quite popular. For example, in Ireland, the Loyalty Saver of Ulster Bank and Loyalty Reward from Barclays are quite similar to our XacLoyalty program.
It has been 3 months since XacLoyalty has been introduced. Could you summarize the implementation of this program in the first quarter?
The bank’s clients have enrolled in the program and already received their 1st quarter discounts and promotions. We are glad that our clients appreciate this program and have a high impression about the program. The higher the number of incoming payments and deposits and balance of the account, the greater the chance of earning points for the client.
I would like to note here that organizations and companies which have not yet opened a current account with us also have an opportunity to participate in the program by transferring your account to XacBank and complete the transactions or balance of your account to the eligibility criteria.
Thank you for your time.
