United Overseas Bank Uob

Published Date: 02 Nov 2017

United Overseas Bank (UOB) was incorporated on 6 August 1935 as the United Chinese Bank. It was founded by Datuk Wee Kheng Chiang, the Bank catered mainly to the Fujian community in its early years. The change of name was effected in 1965. Over the past 76 years, UOB has grown from strength to strength. Through a series of acquisitions, it is now a leading bank in Asia. Besides Far Eastern Bank in Singapore, UOB’s major banking subsidiaries in the region are United Overseas Bank (Malaysia), United Overseas Bank (Thai), PT Bank UOB Indonesia and United Overseas Bank (China). Today, the UOB Group has a network of more than 500 offices in 19 countries and territories in Asia Pacific, Western Europe and North America.

UOB provides a wide range of financial services through its global network of branches, offices, subsidiaries and associates: personal financial services, private banking, commercial and corporate banking, investment banking, corporate finance, capital market activities, treasury services, futures broking, asset management, venture capital management, insurance and stockbroking services. UOB also has diversified interests in travel and property management.

In Singapore, UOB is a market leader in the credit card and private residential home loan businesses. It is also a key player in loans to small and medium enterprises. In 2011 UOB was named the Best Retail Bank in Singapore and the Best SME Banking Business in The Asian Banker's 10th International Excellence in Retail Financial Services Awards Programme. Its asset management arm, UOB Asset Management, is one of Singapore’s most awarded fund managers with a growing regional presence. UOB is rated among the world’s top banks, with a rating of Aa1 from Moody’s and AA- from Standard & Poor’s respectively. (United Overseas Bank Limited Co., 2013)

1.1 Mission Statement

Our mission is to be a Premier Bank in the Asia-Pacific region, committed to providing Quality Products and Excellent Customer Service.

1.2 UOB Objectives

To be recognised as a leader in consumer and commercial banking services in the region, supported by innovative treasury and investment banking products to provide total solutions to our customers.

To create shareholder value by adopting a cost-effective capital structure and optimising the use of capital.

To achieve 40% of our total profit from outside Singapore.

To achieve 40% of our total income from non-interest income activities.

To achieve Return on Equity of 15%.

2.0 Company’s Operation Processes& Facility Layout

(2.1) Diagram of production process and its description

(1) Opening of new/subsidiary bank account

Customer visits to the nearest branch offices

New customers are attended by Customer Service Officer (CSO)

Privilege customers are attended by Relationship Officer (RO)

Process completed

Bank account is opened and bank book or ATM card is provided upon request

Approval by Operation Officer

Application forms are reviewed by Operation Officer

Customer proceeds to filling up application forms and produced necessary documents

Customer requests for desired services and details are explained by officer

One of the most common operations in most banks is the process of opening a new account or subsidiary account. This same goes to United Overseas Bank (UOB) as this is part of the primary operation that is being performed daily.

The process of opening a new bank account in UOB involves a several steps. If a new customer or existing customer wishes to open a new or a subsidiary bank account, the first step to do is to visit to a nearest branch office of UOB. This step is necessary because alternative ways of registering a new bank account such as on-line registration is not supported by UOB.

After a customer has visited a UOB branch, the next step involved is to consult a Customer Service Officer or a Relationship Officer. Customer service officer usually attend to new customers who wish to register a new bank account with a moderate amount of money or in other words customers who register a new bank account with the minimum amount of money required but not the most profitable customer to UOB. Relationship officer on the other hand, attends to privilege customers only. These privilege customers may be a new customer who wishes to register a new bank account with a large amount of money. Privilege customers are also existing customers who have previously invested or deposited large amount of money into UOB.

After the customer has met the officers, the next process is the consultation process. In this process, customer explains to the officer what kind of bank account they wanted, what is the interested rate required, how long should the money be deposited or any other criteria pertaining to the type of account that is suitable to their need. After understanding the customer’s requirement, the officer recommends the best type of bank account that suits the customer’s need and explain in details to the customer. For example, if a customer needs a bank account that is suitable for children, the officer can recommend the customer to register a FunSavers Account.

Next, if a customer is satisfied with the officer explanation and has made decision to register a bank account, they are required to fill up the registration forms and produced the required documents as requested. They are needed to fill up their personal information, occupational background, and other details as in the form. For local customers, the most common document needed is their identity card, MyKad and thumbprint verification. However, for a privilege customer, some steps in this process may be voided as existing customers have their information stored within the company’s database. Therefore, they may not need to present their identity card again or some registration forms do not need to be filled.

Upon complete filling up registration form, the form is then passed to the Operation Officer to be reviewed. The operation officer will search into the database to ensure that the customer is not blacklisted by the Bank Negara. Then, the operation officer will review the customer’s credit background to ensure that the customer is not in debt or is a bankruptcy. Again, this step may be skipped when dealing with a privilege customer, depending on the type of service requested and the circumstances. The review process may involve up to several operation officers if necessary, depending on the situation. For example, if there is missing information about the customer in the database then other operation officer might take part in this process to solve the problem.

Although the review process may involve multiple operation officers, but only the operation officer in charge of the registration are authorised to approve the registration. Once the operation manager has signed approval of the registration, the bank account will be opened and activated. If there is request for bank book or ATM card, the customer will have to wait for the process of producing them. It may take up to several minutes. The process of this operation is completed in this stage.

(2) Money withdrawal process

Withdrawal is rejected

(Process completed)

Independent check / Manual Check process

Cash withdrawal is successful

(Process completed)

Verification process

Customer is passed to Independent SCO/RO

(More than RM50,000.00)

Cash withdrawal is successful

(Process completed)

Customer is passed to CSO/RO

(More than RM10,000.00)

Cash withdrawal is successful

(Process completed)

Customer is attended by Bank Teller

(Less than RM10,000.00)

Filling up withdrawal form

Customer visits to the nearest branch offices

Withdrawal of money is a process that is necessary to be performed in the bank setting, especially if the amount is not those that can be processed by the ATM machine. For example, a lump sum of RM10,000.00. Therefore, a customer must visit to the nearest branch of UOB to withdraw that large amount of money.

The money withdrawal process has several stages. Customers first visit to the nearest branch office of UOB to fill up the withdrawal form. The form is then submitted to the bank teller to process the withdrawal. If the sum amount of money withdrawn is less than RM10, 000 then the withdrawal can be approved by the bank teller. The money withdrawal is successful, and the withdrawal process ends here.

However, if the sum of money withdrawn is more than RM10,000 then the identity card of the customer will be photocopied and chop stamp sighted by the bank teller, before the customer is handed to customer service officer (CSO) or the relationship officer (RO). Similar to registration of new bank account, CSO attend to regular customer while RO attend to privilege customer. At this stage, the officer will have to do a verification process before approving the withdrawal of money. The verification process includes verifying the picture on the identity card looked the same as the person, verifying his or her thumbprint against MyKad thumbprint and lastly verifying the signature of the customer to ensure that the signature is identical to the signature stored in the company database, signBase system. If there is no error during the verification process, then the withdrawal is approved and the money will be withdrawn. The process is completed

On top of that, if a customer wants to withdraw a sum of money which is greater than the amount of RM50, 000, the customer will have to go through the verification process as mentioned above and an additional process. After the verification process, the case will be passed to another CSO or RO to perform independent check or manual check on the withdrawal process to inspect any suspicion. If the account is a joint account, therefore the withdrawal conditions will follow those which are agreed by both parties. For example, two parties signature are required before a withdrawal can be approved. If there is no suspicion detected, thus the withdrawal will be approved. The process is completed. If there is a suspicion detected, the withdrawal will be rejected. The process is completed.

(2.2) Strengths and weaknesses of the operation process

The strengths of the operation process are such that the process will be able to save on resources since the job responsibility of the two different processes are shared by the same person. For example, in the process of new bank account registration and process of money withdrawal, it is both in charged of SCO and RO thus there is no need for more human resources to attend to different operation processes. In another words, utilization is maximized.

In addition to that, since SCO and RO are in charged of different work tasks, they tend to develop skills and knowledge in different field of work. In that matter, they will be able to solve problems or provide solutions to customers in different kind of issues without needing to customers to visit different department when they are facing difficulties. Besides that, there is a clear division of responsibilities such as SCO is only responsible in handling regular customers while RO is only responsible in handling privilege customers, the work process is more organised.

Nevertheless, since there is an overlap of job tasks of bank personnel, it may create insufficient man power during peak hour. For example, if there are only 3 RO in a branch office, they may have to serve both customers who wish to register new account and withdraw money. They will not be able to attend to all the customers and this may affect the processing time. Although there is an overlap of job responsibilities, but the jobs cannot be performed simultaneously. It also restricts SCO and RO from developing specialized skills within a specific job task, as it has diversified job responsibilities.

On top of that, overlap of job responsibilities may also create exhaustion among the officers. This is because their workload is heavier than others as they are in charged of more than one task. Moreover, it may also cause the officers to make more mistakes at times. This is due to confusion of the unclear job scope. For example, the RO may make a mistake in identifying the customers who wish to register an account or withdraw money during the rushing hour.

It also involves a higher training cost of officers. This is because more training is necessary to ensure that the officers are well equipped with skills to multitask and reduced operation error.

(2.2) Diagram of facility layout and its description

(1) Front-office layout

To Lift

(Access Card

Only)

SOFA

SOFA

Entrance

Security

Sales

Force

Personal

Banker

RO

SCO

SCO

Bench

Bench

Bench

Bank

Teller

Operation

Office

Bank

Assets

Security

The front office layout is the facility layout of operation process for new bank account registration and cash withdrawal. Both of the activities take place in this facility layout. Based on our observation, we have identified that the type of facility layout used is a process focused layout.

As we enter the head quarter of UOB, there are sofas provided in the lobby area for customers who are waiting to be served by the officers. It is located approximately 7 metres from the entrance. At the northwest direction from the entrance is the location of the SCO, RO, personal banker and the sales force desk. In this area, customers who wish to register new bank account or withdraw large amount of money are served here.

In approximately 20 metres north from the entrance, it is an alley that direct to the lift which is only accessible with access card only. The alley is guarded by 2 securities officer. Right side to the alley is a room where the bank assets are kept. In this room, documents, files and other materials are stored. Left side of the alley is the operation room where the operation manager works. In this room, the application of new account, withdrawal and other transaction is reviewed, processed and approved.

Besides operation room is the bank tellers’ front desk. This is the area where the bank tellers work. Simple transaction such as withdrawal of money less than RM10, 000 is processed here. Opposite to the bank tellers’ desk is the bench area where customers are seated to wait for their turn to be served.

This layout is a process focused layout because the operation processes are not fixed and it varies with the need of customers. For example, if a customers need to register a new account, they first visit the SCO desk, followed by tellers’ desk, and the application form is then passed to operation room. But, if the customers were to withdraw money they visit the tellers’ desk first, followed by SCO desk if the sum of money withdrawn is large. Otherwise, the process ends at the tellers’ desk.

(2.4) Strength and weaknesses of the facility layout

The strength of the front office layout is that it can increase productivity. As certain processes may not necessarily go through certain processes of operation, it may skip the process and proceed directly to the necessary department. For example, if customers wish to withdraw a RM5, 000 they can do it directly at the teller’s desk without needing to visit the SCO desk from the first place.

Besides that, in the context of bank services, customers need and requirements may vary by individuals. In that point, the facility layout must be flexible enough to be able to cater to the different needs of customers. In this facility layout, flexibility is achieved as different departments can perform the specific task that is catering to specific service such as money withdrawal or account registration.

In this process layout, the fixed cost involved is low. This is a result of full utilization of man power. As more than one job task are being performed, it generally reduced the needs of more man power and thus reducing the amount of salary paid.

The weakness of front office layout is it may create confusions among the customers. This is because the different departments are separated away and this does not give a clear direction to customers where to visit when they needed a particular service. For example, if the customers need to withdraw money, he or she should visit the teller’s desk. But the first thing customer saw as they enter the front office is the officer’s desk, thus they might visit the officer to inquire and from the officer’s desk they are redirected to the teller’s desk.

Unlike product focused, there is no fixed operation processes in the process focused facility layout. Therefore, it is difficult to identify if mistakes or error had occurred in between any of the stages of the processes. In fact, there is also a possibility that different managers performed repetitive job on the same customers. It is also hard to supervise facility layout like this because you cannot doubt the tasks that is being performed by the employees since they are responsible for multiple tasks.

In this process layout, the variable cost involved is high. This is because doing multiple tasks at the same time is more prone to human error and mistakes. As a result, more corrections need to be made and increase the variable cost.

3.0 Study Area’s Literature Review & Contributions

3.1 Journal Article Review 1:

Quality management and organization, Innovation in Canada

Quality through the result based management: Discussion

Creation and innovation may improve the quality of management; by this point we would like to discuss the question for new changes.

Rationality, are these new arrangements rational? Can they be? At what cost? Rationality requires clear and stable objectives and measuring system. As Kenneth Arrow pointed out, "if the assumption of transitivity is relaxed, then a general welfare function is impossibility…if a problem has more than two dimensions, it would be unlikely that a solution would be satisfactory to all parties" (Halachmi and Montgomery 2000, 393)

UOB understands the new changes, new arrangements or new goals that the upper management had set and evaluates it with rationality. Like all the new changes, arrangement or goals, UOB’s goals are possible to be achieved too and it does not affected by other external uncertainties. Once the goals are set and does not change for constantly for a longer period, it makes the employee feels that their effort was to achieve the company goals. Thus, UOB manages the good quality of all employees. Examples, approved business loan that have quality proposal even the individual without basic income. If this is the case, it requires all experienced business or market analytical banker to strictly evaluate the quality of business proposal.

3.2 Journal Article Review 2:

Service Quality Improvement in the Retail Banking Industry

Service quality of an company will affects the daily performance. It has been proven and supported by some data and research that included in the journal. If UOB does not provide a good quality services to their customers, UOB’s image and reputation will definitely damage. Besides, a research based on a US bank showed that before the improvement on quality management, the bank often paid the cost of failures and corrections. After some improvement of quality management had been carried out, the return on assets (ROA) and return on equity of UOB had increased due to profit margins and earnings had increased.

Moreover, dissatisfied quality management in banking service can lead to dissatisfied consumers’ complains. From a research of Zairi (2000), he claimed that satisfied customers possibly share their experience with five or six people while dissatisfied clients might inform another ten. Through this, UOB must focus more on how to improve their service quality, so that it can lead them to the success.

3.3 Journal Article Review 3:

Total Quality Management Practices in Banks

Different banks in different countries carried out different types of quality management. From this journal, we found out that there is a phenomenal change in Indian Banking sector. The liberalization policy that announced by India Government had allowed private sector into banking sector. Those private sectors have provided a good service to customers compared to those public sectors. In Malaysia, UOB is a private commercial bank; therefore, we can claim that they provide better customer’s service than these public bank. Thus this had created a great threat to public sector. As a private commercial bank, UOB always focus on consumers’ needs and requirements by providing a wide range of financial services.

In conclusion, no matter in which country, quality management plays an important role in banking sector. If the bank able to provide a good and nice service to the customers, it sure will become a successful leader in this sector.

3.4 Journal Article Review 4:

Impact of Total Quality Management and Service Quality in the Banking Sector

To carry out a good quality management, bank has to figure out which factor affects the success most. In this journal, we able to detect which factor play the roles in quality management.

For an example, a recent study published in 2009 presents the important total quality service factors in Indian commercial banks and examines the level of implementation of TQM practices in three groups of Indian banks. The study reveals that the important TQM factors are:

Top-management commitment.

Human resource management.

Technical and important systems.

Customer focus.

Employee satisfaction.

Service culture.

Social responsibility.

Servicesacpe

In our opinion, UOB can use the TQM factors from the study to help them in contributing success in the future. For example, commitment between top-management plays an important role. They must be assertive when making critical decisions which might be lead the bank to success in future.

3.5 Journal Article Review 5:

Current health of quality management practices in service sector SME: this case is discussing current quality management practices is service sector.

One of the ways to improve the health of quality management is through IT. Nowadays, internet make our life become more efficiency and effectively. To be successful in banking sector, UOB can implement some new technologies or soft wares for their system. UOB can conduct an IT department to focus on bank daily operation program. Not only that, though IT, UOB can make research though Delphi research. Delphi research is defined as a structured communication technique, a research method from forecasting through internet. Besides that, bank can create CRM (customer relationship management

) to build a good relationship with their customer. They can conduct their through interview and e-mail survey to keep updating what customer currently needed. Not only that, they have to make sure the quality of the e-mail and interview is good enough too.

3.6 Journal Article Review 6 :

Job satisfaction and quality management: an empirical analysis

According to the case, a better quality management can improve employee participation and involvement against with company goal. One of the factors to improve quality management is the potential impact of employee job satisfaction. To make employees become more commitment in their work, UOB can organize some programs to motivate employees and also have more interaction between the employees. Employees become high performance and also will improve the productivity to the bank. Employee is delighted with their job that can lead bank to make a better service to their customer with good manner.

Furthermore, leadership is one of the factors to improve the quality management. Top level management in UOB such as CEO, COO, and CFO has to continue to improve themselves in planning and strategic management. Top level management has to continue commit to achieve company goal and goal setting. When top level management involve their self in a particular work, those employee will put more afford in doing their own job. Top level management also have to concern with operation management , information management to make sure the quality of process as well as customer and market focus aimed at implementing the required is standardized.

3.7 Journal Article Review 7 :

Quality management initiatives in the banking industry: a Meta analysis of Hong Kong and the UK.

In the international financial arena, Hong Kong banking industry was playing a significant role. As we all know, Hong Kong banks has improved to maintain their bank’s quality and performance. Therefore, in Malaysia, UOB must improve the quality and efficiency of their operations in order to maintain profitability too. So that, our bank can maintain the profitability by tightly control cost and improve the quality and efficiency operations. Next, if want to survive and prosper in this situation, UOB should improve the quality of services that they provide to their customers such as;

Avoid launching too many quality programs at the same time.

Continue the practices that were confirmed effective.

Increase the training of management.

Create and keep up the employee-ownership culture.

Evaluate the risk of each quality improvement project.

3.8 Journal Article Review 8 :

Quality management in banking services: An approach to employee and customer perceptions.

Employee affective responses and their perception about the service quality are related to working environment. Besides, organizational behavior and consumer behavior offer contributions that may be made from one to the other is suggest by the customers and employees in services organizations. Employees in UOB should have the customer perceptions, attitudes and intentions that affected by employees experiences and attitudes. In the other hands, they should not just focus on showing a direct relationship between the factors that determine the climate and the services quality provided, but it is rather on showing an indirect relationship which related to employees. Next, UOB bank should encourage their customer’s participations in the performance and concerned about their customers perceptions of the climate in which employees perform their work. This is given that services are something moderately intangible if compared with the products.

3.9 Journal Article Review 9:

Implementation of Quality Management Practices in Malaysian Automotive Industries: A Review

From the journal, we know that the automotive industry in several countries around the world is in different stages of their quality movements, this also occur in banking and finance companies. An abstract model using Structural Equation Modeling (SEM) has been proposed. UOB should practice QM to maintain the performance constantly.. The concept of international serves as the motivation for developing a global QM standard for evaluating QM practices within countries (Rao et al., 1999). The practice of QM also affects from the national level to the international level (Kim and Chang, 1995), which helps UOB bank to compete internationally and gain a competitive advantage in the global market (Liu and Kleiner, 2001). A study conducted by Woon (2004) among Singaporean companies found that the service organizations generally showed a lower level of TQM implementation than the manufacturing organizations in the elements quality information and analysis. Projogo (2005) in his study examines that the significant impact of quality information and analysis of TQM on quality performance. This also support by Lee et al. (2003) showed that from empirical study quality information and analysis have a significant effect on process management. UOB can implement these strategies that found in the study to improve their services.

3.10 Journal Article Review 10:

The Application of Total Quality Management on Service Quality in Banking

America is in the middle of a service crisis and the customer is the casualty. Banks are struggling to improve service and proclaim that they are customer-focused, yet unique, exceptional quality service is still the exception rather than the rule. There are two routes to profit growth in financial organizations, which are cost-efficiency and differentiation. The use of quality in banking focuses on strategy and moves the focus from quality to total quality management. According to Edward Furash, bank management must have three critical characteristics:

1. A style of doing business that makes customers feel the bank is something unique;

2. A management process that is systematic and transferable from region to region, bank to bank, and department to department;

3. A management style that also balances individual and unit freedom, creativity, and incentive with central control of risk, quality, and efficiency.

However, if UOB meet these three critical characteristics, there is a high possibility for them to become successful in this sector. Quality service also comes from inspired leadership, a customer-driven corporate culture, employee involvement, and effective use of systems and technology. Moreover, quality is a process too. Most strategies develop from top-down, but bottom-up works as well. Company like UOB has to implement quality strategies that make sense for them, and it may take years to figure out exactly what works and even more time to get it correct. Quality improvement is not easy to the workload of managers and employees, but the results are good and may be necessary for survival in an increasingly competitive industry.

4.0 Discussion and Conclusion

Based on our analyses, as different customers demand for different services the production process of UOB facilitates the development of essential sustainability factors which is important for the employees to master different skills in order to attend to different customers at all time. This is important to ensure that most customers’ requests are served using the least resources. This eventually creates a pool of diversified talents as well as maximizing resources utilization which increases the performance of the organization.

Besides, as mentioned above that flexibility is important to cater to different customers’ need, the facility layout of UOB front office can pair up with its production processes to create an effective and efficient customer service experience. The facility layout promotes flexibility while at the same time improving productivity by reducing the unnecessary processing time. This is achieve by skipping steps that are not required in certain processes such as cash withdrawal can be completed by visiting directly to the bank tellers.

In order to overcome man power, a cross-functional training can be provided to all employees within the organization to develop the specific skills required to perform a job task. For example, human resource managers or public relation managers can be sent to training to help at the front office during rush hour and continue to their major task after the rush hour. We also encourage that job rotation should be implemented to prevent exhaustion and job boredom from happening.

Besides that, UOB can also provide more directories to the customers who visit their front office to reduce confusion and error. By doing so, putting up more signage will aid customers in locating their specific destination easily without going to the wrong location. In addition, despite there is no fixed processes in this layout, guidelines can be implemented aiming at specific job task to prevent error. For example, a specific guideline can be followed when customer is registering a new account thus mistakes and errors can easily be identified if any part of the guideline is missed out.

Based on our study area’s literature review and contributions, we found that quality service in the line of banking, as the banking line is categories under services. In the sense of servicing, prompt and effective services may influence the satisfaction of a customer. Thus, a good service is a must in UOB bank.

Quality management plays an important role in United Overseas Bank (UOB) in contributing to the success in the future. Based on the journal articles, we found that the main factor to manage the quality is commitment between top management and employees. For instance, top management has to discuss and listen to employees’ opinions when company encounters any problems, but the final decision making is depends on the top management itself. This commitment will lead the company to perform efficient performance and provide good services to the customers. Besides, another way that we found from the journal articles to improve quality management is use of latest technology and software. It is important for UOB to implement the latest software in their system, because it can increase the efficiency and effectiveness of the company. Brand image and reputation of UOB will increase due to the great performance of provided service. Therefore, we think that it is important for a company to have good quality management.

To maintain the good quality management in UOB, top management can organize more interaction activities or programs for the employees. For example, they can organize more company trip for the employees to join, some relaxation classes like meditation class or yoga class for the employees to join after their working hour. Employees can release out their stress that gain from their daily works after they’ve joined these classes. Therefore, employees will perform better in their work and the quality of the service will increase after they joined those programs.

In conclusion, we think that it is important for UOB to have their operation processes and facility layout. To increase the efficiency and effectiveness of the work performance, everyone in the company should understand well the process and layout of each department. This is to ensure there is no any unnecessary incidents happen especially when dealing with their customers. Besides, good quality management also can contribute to UOB to the success in future. Although quality improvement is not easy to the workload of managers and employees, but the results are good and may be necessary for survival in an increasingly competitive industry.