OCBC revamps mortgage process

Source : Business Times – 17 Jun 2009

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.