Table of Contents

1.

Introduction.............................................................................................................2

1.2 Vision.......................................................................................................................2
1.3 Mission....................................................................................................................2
2.1 Framework 1 - Porter 5 forces analysis...................................................................3
2.2 Framework 2 Fishbone Chart...............................................................................8
2.3 Framework 3 SWOT Analysis...........................................................................11
3.

Propose of enterprise system................................................................................14

4.

Challenges.............................................................................................................16

5.

Conclusion............................................................................................................18

6.

References.............................................................................................................19

7.

Work Break Structure...........................................................................................23

1. Introduction
Hong Leong Bank Berhad is a public listed bank in Malaysia. It is a member of the
Hong Leong Group Malaysia. Today, Hong Leong Bank possesses 300 above
branches in South-east Asia, and the Headquarter in Malaysia is located in Kuala
Lumpur, Malaysia. The businesses of Hong Leong Bank includes personal financial
services, wholesale banking, Islamic financial services and regional franchises and it
also has electronic channels including Hong Leong Mobile Banking, Hong Leong
Online, Hong Leong Call Centre and self-service terminals (Hong Leong Bank
Berhad, 2014).

1.2 Vision

(Hong Leong annual report, 2009).

1.3 Mission
Hong Leong Banks mission is to help clients to generate superior returns through the
provision of top-quality service, in-depth investment insights and prudent risk
management advices (Hong Leong Bank Berhad, 2014).

2.1 Framework 1 - Porter 5 forces analysis

A) Threat of new entrants (Low)
Banking industry in Malaysia is regulated by the central bank of Malaysia, which is
the BNM- Bank Negara Malaysia. The principal of BNM under the Central Bank of
Malaysia Act 2009 is to promote monetary stability and financial stability conducive
to the sustainable growth of the Malaysian economy (Bank Negara Malaysia, 2012).
In the Law of Malaysia, Act 372- Banking and Financial Institution Act 1989 is an act
that for licensing and regulation of institutions for banking, or other finance relating
companies connected therewith Bank Negara Malaysia. All the banking institutions in
Malaysia are required to hold a valid license granted by the Minister (Lawyerment,
2014). There are 16 sections and 131 rules and regulations for applying license under
Banking and Financial Institution Acts 1989. Licensing requirement is a barrier for
the new entrance to startup a banking industry in Malaysia.
Therefore, threat of new entrants for Hong Leong Bank is low.
B) Threat of substitute products or services (high)
Threats of Hong Leong Bank is not only from the competitors, but it also comes from
the insurance agencies, investing and loan companies. Some insurance companies do
offer insurance plans that covered illness saving plans with high interest rates. Great
Eastern offers a plan that is called Great Ideal Living which covers 36 different
kinds of critical illness, Total and Permanent Disability (TPD), death and added
advantages with Deferred Whole Life (DWL) as shown in Table 2.1.1.

Table 2.1.1 is the calculation of DWL from Great Eastern. (Great Eastern, 2013)

Figure 2.1.1 example of Great Ideal Living Plan from Great Eastern. (Great Eastern, 2013)

Therefore, the threat of substitute products or services for Hong Leong Bank is high.
C) Bargaining power of customers (high)
Customers of Hong Leong Bank are the account holders who using Hong Leong Bank
services. There are 27 commercial banks in Malaysia which included foreign and
local owns (Bank Negara Malaysia, 2014), whereas Hong Leong Bank is not the only
option for customers to save money. Hong Leong Bank customers has large number
of alternatives that offer the similar services. Spilt banking occurred when people
employed two or more bankers to handle their personal financial affairs (Denton &
Chan, 1991). From a customer perspective, multiple banking account enable a
customer to get a wider range of financial services, also accessing to wider range of
ATM. Therefore, the bargaining power of customers is high.
D) Bargaining power of suppliers (low)
Hong Leong Bank unlike those manufacturing industry need suppliers for supplying
the raw materials, whereas the supplier plays an important role in the product
processing. But for Hong Leong Bank as in service industry, the suppliers are the
supporting facilities, such as furniture, cheque books, statement papers, ATM machine

and etc. The impact of these in Hong Leong Bank is not much significant since they
are not raw materials (UKESSAYS.COM, 2009).
Depositors is another suppliers of Hong Leong Bank. Depositors refers to the people
who deposits the money into the bank. Depositor has no bargaining power whatever
in reality (Ackerman, 2008). A fixed interest rate will be paid for the depositors in
Hong Leong Bank. Although the more money depositor deposits into Hong Leong
Bank, he/she will get paid based on the fixed interest rate for the amount of money
deposited.
Therefore, the bargain power of suppliers for Hong Leong Bank is low.
E) Intensity of competitive rivalry (high)
Although is hard for new entrants to get the banking license in Malaysia, yet Hong
Leong Bank still facing the challenges from another 26 commercial banks in
Malaysia. Overnight Policy Rate (OPR) referring to the interest rate for housing loan
from Bank Negara Malaysia for banks as references for banks in BLR adjustments,
but there might differ from bank to others bank. (BLR.MY, 2011) OPR was fixed by
government is 3% and the range of BLR adjustment is based on the bank themselves
after the calculation based on the formula that involved the costs of the loan (Bank
Negara Malaysia, 2014). The strategies to promote the services are almost the same
among these banks. There is no identical service that provided by Hong Leong Bank,
whereas all of them are controlled by government, the only making differences among
the banks is the BLR adjustment (Refer to table 2.1.2 for the comparison table of BLR
among the commercial banks in Malaysia). Therefore, the degree of intensity of
competitive rivalry of Hong Leong Bank is high.
Table 2.1.2 is the table of comparison BLR that offers by Malaysia Commercial
Banks (RmValues, 2011)
There are many financial companies that offer private loans with lower interest rate
compared to Hong Leong Bank.
Comparing Hong Leong Bank to MBSB, that loans out the same amount of money
which is RM10 000 and with the same repayment period, the interest rate of Hong
Leong Bank is slightly higher compared to MBSB.

Table 2.1.3 Loan Repayment Tables. (Left table is the repayment table of MBSB and
right table is the repayment table of Hong Leong Bank.)

2 .2 Framework 2 Fishbone Chart

Facilities

Procedure

2
Less CDM in

3
Messy

the branches

Inconvenience to

Bad Communication

customers

between Departments

Less Employee service

Hong Leong
Poor Service

customers in a specific time

Affect employee
working

Certain Impolite staff Call

Irrational Deployment
performance

Centre (Back Stage)

Staff
Facilities Equipment

Figure 2.2.1 (daryl.k, 2008)

The Cash Deposit Machine (CDM) is a problem that facing by the customer. In
Figure 2.2.1, the customer complaints that there is no enough Cash Deposit Machines
(CDM) in the branch of Hong Leong Bank. Occasionally, the CDM will faults or too
many customers using in one CDM and this cause the customer inconvenience.

Procedure

Figure 2.2.2 (Wong, 2014)

The problem of Hong Leong Bank is their messy process due to they do not have a
better communication between the departments. Because of this problem, the
customer feel confuse about the information procedure that giving by the employee
and customer feel disappointed with their services. In the Figure 2.2.2 above, the
customer has been complaint due to this problem.

Staff
Front Stage Problem
One of the problems is occurring in the front stage. When during the lunch time, the
customer is waiting the front stage employee for service, but there are only few
employees are working due to they cannot arrange their working time well and cannot
find the people to replace their working position and this occurred in some of the
Hong Leong Bank branches.

Back Stage Problem

Figure 2.2.3 (Chong, 2013)

Another problem is about the back desk staff. The back stage staff is referring to the
employee of Hong Leong bank call center. The problem about call center is the Hong
Leong Bank cannot ensure all employees in call center are speaking friendly and
politely to the customer. This attitude of employee will affect their impression to the
customer and the customers will think they are not trained and not professional
enough. In Figure 2.2.3 above, the customer complaints the sound of employee is
unfriendly and impolite when the customer calling to the call center.

Irrational Deployment
The internal problem of Hong Leong bank has been affected the morale and working
performance of the employee. Because of this problem, the employee would not
provide a good service to the customer due to Hong Leong Bank irrational to deploy
their employee without any reason. Hong Leong Bank branches are distributed
throughout Malaysia. They may deploy their staff when necessary. They deploy their
employee from their original work place to a distant branch. For example, the
employee deploy from the branch of Kuala Lumpur to branch of Penang.

2.3

Framework 3 SWOT Analysis

Strength:

Top 20 public company listed in Forbes Global 2000 year 2013

According to Forbess report in Forbes Global 2000, Hong Leong Bank was
listed in the list and there is only 20 Malaysia companies in the list. This
ranking is based on criteria namely companys Sales, Profit, Assets and
Market Value. (Forbes Global, 2013)

The low interest rate for repaying to credit card, high balance transfer
According to the comparison of ringgitplus, Hong Leong bank is the lowest
cost to be paid in annual compare with other commercial bank in Malaysia.
The Hong Leong Wise card is 15% interest rate, 10% cashback and free of
balance transfer and annual fee. Then Hong Leong bank provide high balance
transfer which is minimum balance transfer rm3000 in the maximum duration
of 6 months. (ringgitplus, 2014)

Low interest rate for housing loan

According to the comparison of ringgitplus, the interest rate for housing loan
that offered by Hong Leong bank is lower, which is only 4.20% per annual.
And the competitors such as OCBC bank, Maybank offer the interest rate for
housing loan is 4.30% and 4.50%. This comparison show that this is strength
of Hong Leong bank, it will generate more profit for them. (ringgitplus, 2014)

Weakness:

Bad credit card & banking service.

According to Lowyat.net, some of people complaint that some of the credit
card services are not professional enough and need consume a lot of times to
finish the service. (Lowyat.net, 2012)

High interest rate for personal loan

According to the comparison of ringgitplus (2014), the interest rate for
personal loan provided by Hong Leong bank is 12% in annual. Reversely the
competitors such as Citibank, Maybank just only charge 7.64% and 8% in a

year. So this information show that this is the weakness of Hong Leong bank,
it affects less people to have loan from Hong Leong bank. (ringgitplus, 2014)

Opportunity:

More IT Devices or Software Used.

Nowadays, mobile phone is acting as payment clearing houses or hubs, with
an important portion for us to perform the financial services. The mobile
phones working similar as Mastercards PayPass technology, the monthly bill
will be sent to customers from servicing operator. The scenario shows that the
banks and mobile operators are reconciled to provide the seamless joint
services for customers.
These innovations help banks to build customer trust, managing risk and churn
and encouraging retention and loyalty. (Peppers & Rogers Group, 2014)

New entrants in local are low, low competitive level

According to the Laws of Malaysia, Act 372 Banking and Financial
Institution Act 1989 is an Act to issue the new laws for the licensing and
regulation of institutions carrying on banking, merchant banking, finance
company, money-broking businesses and discount house, for the regulation of
institutions carrying on certain other financial businesses, and for matters
incidental thereto or connected therewith. The licensing of banks are
controlled by Bank Negara Malaysia in Malaysia by BAFIA. After that, the
Minister is the one who can grant the valid license to all the commercial bank
in Malaysia.
So that, the challenge of new entrants for Hong Leong Bank is low, this cause
the market share is maintained.

Multiple- use of cards

The enhancement of E-Business in Malaysia has created an opportunity for
bank to issue more credit or debit cards. In most of the E-Business websites,
customers required making the payment with cards, and this has encouraged
the consumers to apply for a card. Customers can use cards to purchase
cinema tickets, concert ticket or airline ticket in online system. This creates

convenience to customer and banks can gain more profit which interest
charged from cards. (Peppers & Rogers Group, 2014)

Threat:

Facing growing threat from mobile phone technology

Nowadays, bank is depending on the technology very much, example ATM
machine, E-banking and M-banking. To be competitive in the market, Hong
Leong Bank also need to adopt all these technologies. It will increase the
hardware, mobile application and maintenance cost for the Hong Leong Bank.
(Okoth, 2013)

Intensity of competitors
According to the list of Bank Negara Malaysia show that, there are 27
commercial banks, 16 Islamic banks and 13 investment banks existing in
Malaysia.
This information shows that there are many competitors in the local include
Maybank, CitiBank, CIMB Bank, OCBC Bank, HSBC Bank and so on. All of
them are providing the same products and services to the customers. This
would cause high competition for Hong Leong Bank. (Bank Negara Malaysia,
2014)

3. Propose of enterprise system

Based on the analysis reports of Hong Leong Bank above, an Enterprise System
package that able to integrate all the existing information system with Decision
Support System (DSS) and Customer Relations Management features are
recommended to be implemented.
Decision support system (DSS) is an information system designed to help users reach
a decision when a decision-making situation arises. A variety of DSSs exist to help
with a range of decisions. (UNCCHARLOTTE, 2014)
Customer Relationship Management (CRM) in an enterprise wide effort to acquire
and retain profitable customers. It focuses on building long-term and sustainable
customer relationships that add value for both the customer and the company.
New enterprise system for Hong Leong Bank
DSS feature
Statistical report will be prepared by the enterprise system to the HLB executives for
making decision could be a possible solution to solve the issues occurring in the
analysis.
By referring to the porters 5 forces and SWOT analysis above, the problems facing
by Hong Leong Bank are the differences of interest rates among competitors and
service offered to customers. The new enterprise system will uses of internal sources
which including the sales, financial data, inventory data or cash flow data in Hong
Leong Bank and external sources, which including the trends, government policies or
inflation rates to help Hong Leong Banks executive makes decision. Enterprise
System can acts like a DSS for better decision making by using the knowledge to
solve the problem. With the capabilities of DSS in the Enterprise System, statistical
analysis capabilities, spreadsheets, and graphics will be including in DSS, to help in
extract the result for the most suitable interest rates based on the trends from the
analysis reports.
CRM feature

For the problems of serving customers mentioning in Fishbone chart, CRM is

recommended to be in the enterprise system to solve the issues occurred. CRM is
mainly concentrating in making a better relationship among customer and the
company. From the analysis, some customers were dissatisfied with Hong Leong
Bank services, due to the bad service provided and posted it on the internet. As a
public company with high reputation, a good relationship between employees and
customers is very important, a single mistake might bring down the companys image.
As the implementation of the new enterprise system with the CRM feature, it will
enhance a better relationship between the customers with Hong Leong Bank. As CRM
has provided a platform for the customers to submit feedbacks on their opinions and
suggestions, Hong Leong Bank will be able to adjust their processes in order to serve
the customer in a better or satisfactory manner. CRM can help in better serving the
customer, thus, the complaint from customer can be reduced after the implementation
of enterprise system.
CRM also can help Hong Leong Bank to giving a clear and faster procedure to the
customers. Hong Leong Bank will be able to provide some basic information in CRM
for customers to refer to. After implementing the new enterprise system, there is a
CRM feature that allow the customer to track the bank loan process and many more.
In this platform, employee can update the latest information process and customer can
keep track of all the transactions done (information update etc.) which provides a
better, clearer understanding and latest information of the updates to the customer.
Hong Leong Bank need to provide a customer database system to the employee for
checking and update the information such as the employee can update the latest
process information of the customer. Through this platform, the employee would get
the latest information and messages of the customer. Thus, when the customers
asking, the employee would giving the latest and accurate message to the customer.

4. Challenges
Implementation of enterprise system would bring some advantages for the Hong
Leong Bank, yet there also some limitations and challenges that would occurring after
the implementation.
Garbage in garbage out (GIGO) referring to the concept that the quality of
the output is only as good as the quality of the input (Shelly & Rosenblatt,
2012) . All the data from internal and external sources must be accurate to
get the best decision. Result that from the fact finding might not be
1.

GIGO

accurate. For example, Hong Leong Bank is doing the online survey to get
feedback for a particular issue, participant might not giving out the accurate
information. With the irrelevant information, DSS will come out a result
based on the irrelevant information which is not suitable to use and might
be a threat for Hong Leong Bank.
Business procedures will be affected due to the implementation of
enterprise system. New business practices may introduced to fulfill the

2.

Business

standard of process in the new enterprise system. From the research report

process

by Mano Billi (2014) about the challenges in implementing ERP into

(Reengineering) enterprise, several researchers prove that best application can only meet the
70% need of the company. The modification of business process may lead
to some other challenges that could affect Hong Leong Bank.

3.

Storage

Implementation of enterprise system would lead to storage environment

challenges and

issues. There is a research of Dell enterprise system from Ana Volpi and

maintenance

Doug Chandler from IDC Research Company, for How Dell addresses
enterprise storage challenge, there are 7 issues that are commonly faced by
enterprise system were listed out in this research paper. The same
challenges will be faced by Hong Leong Bank.
Challenges of storage (Ana Volpi and Doug Chandler, 2002):

Business continuity and disaster recovery strategies

Designing for high availability

 Opportunity to consolidate storage

Opportunity to consolidate server
TCO and ROI
The challenge of the heterogeneous storage area network (SAN)
Post implementation support
Training for the new system has to be provided to the employee with the

4.

Enterprise

right job position. Employee has to be trained before using the enterprise

System literacy

system but employees get very attached to their way of doing things, and

versus Resistant

when technologies change, they invariable come up with resistant to that

to change

change (Martin Emerson Low, 2013). As Hong Leong Bank employees

need to attend the training for the new enterprise system, and some may

Duplication of
data of
5.

Information
systems

resists it because of the changes of work processes.

Information duplication might happen after the integration in the existing
information systems. If the same information is inserted twice in the
different information system, and this issue will occur in the new enterprise
system when updating the particular information.

5. Conclusion
Based on the analysis reports of three frameworks, Porter five forces, SWOT analysis
and Fishbone Chart, we encounter that the main issues of Hong Leong Bank are the
customer-relationship, the threats from competitors which offering better services and
lower interest rate for loan and also the isolation of information system. To solve these
issues, an Enterprise System with integrate all the information systems, CRM and
DSS built-in to supports the business in better customer serving and better decisionmaking is recommended to underpin their business future strategy. Yet, there are
some challenges after the implementation of Enterprise System. If Hong Leong Bank
able to deal with the challenges, the implementation of Enterprise System will helps
in support the daily business, growth of business in future and increase the
competitive advantages.

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7. Work Break Structure

Group Members:
1) Chong Yong Dee (TP025657)
2) Joseph Loh Shin Yu (TP031119)
3) Chen Jian Yong (TP026096)
No.

Task / Description / Responsibility

Porter 5 forces
Propose of enterprise System
Challenges
Conclusion

Introduction
SWOT analysis

Fishbone analysis
Propose of Enterprise System

Name & Signature