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Wealthy Brunei’s ‘crappy’ banking system

July 28, 2013

Brunei banks need a 'massive overhaul' and decision makers must look at the true meaning of 'customer service'.


By Abdul Malik Omar

BANDAR SERI BEGAWAN: While many new-and up-to-date banking services have been rolled out to enhance consumer experience here, financial institutions in Brunei however have their faults and inefficiencies particularly in the areas decision and policy-making, both in the public and private sectors.

Having studied outside the country for over a year, I have gathered insight to help compare how banks in the United Kingdom (UK) and in Brunei perform.

Let me first state that my criticism is intended to improve existing services in Brunei banking and eventually help protect the consumer from going into the bottomless pit of debt, as well as guide businessmen into improving their efficiency.

Firstly, bank queues in Brunei are so long that they make Ayamku (Brunei’s answer to KFC) staff look professional.

I have nothing against those sitting behind the counter, but I do gripe when someone wastes 30 minutes of my life.

Now, if the whole place is packed with people then I would understand, but that was not the case in this annecdote of mine – there were only four people waiting in line and I waited 30 minutes.

In UK’s Lloyds or TSB bank the average depositing or withdrawing or over-the-counter banking transaction period is less than that of Ayamku serving you Nasi Ayam Chicken Spring.

Anyway eventually I get to the counter and the lady says: “Sir, I see you do not have a debit card.”

“How much is it (cost of card)?” I asked.

“BND$20 per year,” she says.

I cringe and let the BND$20 a year sink in…that amount is so massive that it alone would destroy the accumulated annual interest gained. In Brunei it is two percent on the over BND$1,000 worth of my capital deposited in the bank.

Exploited by banks

The advantage of having that debit card, they said is that I can withdraw in their ATM machines.

But why should I pay for this service?

In the UK they give the debit cards for free and I can withdraw in any ATM machine in the country.

But in Brunei, they not only charge me on a per year basis but I can only withdraw from my bank’s network of ATMs.

For instance if I have a Baiduri Bank debit card the only ATM machine which will accept my card is Baiduri. Not HSBC, not Taib Bank, not Standard Chartered whatever.

Shouldn’t there be a banking association between the leading banks to work together for the consumers betterment?

In the UK market, where there is financial maturity and wide-ranging options of banks, to ‘corner’ the market would lead to economic suicide.

Thirdly, we let our government employees get exploited into debt. Humans are subjected to whims and desires that economists call unlimited wants.

With a mature outlook in finance one can utilise this access of credit for good use. However, that cannot be said for over 60 per cent (or more) of the employees.

They misuse and misplace their finances into purchasing things they cannot afford.

Massive overhaul needed

I thank the former minister of finance for curbing the credit fiasco that happened in the mid-2000s instigated by banks which were just too happy to exploit government employees ‘unlimited wants.’

What happens then to a family drowning in deep debt if it does not lead to broken relationships, low self-esteem for the family head, and eventually poor education and upbringing for a child?

Where do government employees get the permanent salary if not from the source of it all – oil and gas?

The banks through loans and interest have largely absorbed this trickle-down wealth.

Finally, internet banking here is so bad that it spills onto the students ability to get allowances on time.

Why? For instance Bruneian students in UK never have to face such frequent disruption which students here suffer.

Mind you, Brunei Hall, which is the main administrative body in UK overlooking over 1,000 students has less than 50 administrative employees.

This efficiency is thanks to the UK internet banking system! An administrator only has to input a yearly standing order once or twice a year for a student to receive his or her monthly allowance, and when it is confirmed you can be dead sure it will be transferred every month.

Can the same be said to the banks and their internet banking here?

There are a lot of things banks in Brunei have to offer.

But services that they should look to improve include shortening bank queues, charge-free debit cards, ethics in lending money to those who can afford it, and a massive overhaul in internet banking.

The problems mentioned, if studied by bankers and decision makers, can be an opportunity to get that next ‘banking excellence award’ banks proudly post in their promotional ads.

Because isn’t excellence all about improving customer service?

The writer is the founder and editor of AMO Times, Brunei’s Online media publication start-up. This is an excerpt of an article which first appeared in http://www.investvine.com


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