Thu, May 15, 2003 - Page 11 News List

Survey finds few know of holding companies

FINANCIAL SECTOR A poll by `Business Weekly' found that three mega-banks dominate the market but many people don't know much about the industry

By Joyce Huang  /  STAFF REPORTER

Cathay Financial Holding Co (國泰金控), Fubon Financial Holding Co (富邦金控) and Chinatrust Financial Holdings Co (中信金控) are the three best-recognized mega-banking institutions in the nation, according to a survey released yesterday.

The survey, conducted by the Chinese-language Business Weekly between March 27 and April 6, also found that the corporate image of these three top the other 11 financial holding companies, the magazine's deputy editor-in-chief Cabula Chang (張毅君) said yesterday at a press conference in Taipei.

But over 56 percent of 860 respondents said they are unaware of any financial services provided the 14 financial holding companies since 2001, while another 37 percent could not name a single financial holding company.

In November 2001, the government allowed banks, securities houses and insurance companies to combine into financial holding companies in order to cross sell various financial products.

"An institution's branding takes years and many efforts to succeed," Tung Cheng-cheng (董成城), president of Cathay Financial told the press conference.

Tung said corporate values have to be first developed and recognized by employees before they can be sold to the public.

Victor Kung (龔天行), senior executive vice president of Fubon Financial, echoed that view, saying that if subsidiaries of the holding company are well known, it is easier for the parent company to penetrate the market and boost its name.

Therefore, Kung said, his company is still mulling the idea of renaming one of its subsidiaries -- TaipeiBank (台北銀行) -- which has become well known to Taipei's residents.

The nation's financial holding companies are already putting substantial pressure on many of the smaller independent banks, insurers and securities companies, Standard & Poor's said yesterday in a report.

However, the nation can only support as many as 10 financial holding companies, the central bank said in a research report published in February.

To survive in the competitive market, all mega banks should invent innovative financial services in order to expand their market shares, said Lu Hsin-chang (盧信昌), head of finances at the Consumer's Foundation (消基會).

But Lu also warned that the various segments of holding companies shouldn't take advantage of bank clients' personal information, including credit history, to cross-sell products, saying that such a move would violate consumer-protection laws.

Lu made the comment in response to the survey's finding that nearly 10 percent of respondents were worried that their personal information might be exploited or abused by the mega banks' salespeople, since those banks are allowed to sell various financial products such as insurance and securities.

Over 56 percent of respondents, however, said they weren't aware such leaks could occur.

Defending the sharing of information, Charles Lo (羅聯福), president of Chinatrust Financial, said that mega banks are able to provide better services to their clients if the clients' credit information can be used by their various service segments.

"The data can help us develop tailor-made products that satisfy each customer's needs," Lo said.

In a win-win situation, the banks can create synergies as well as generate profits, Lo added.

This story has been viewed 2529 times.
TOP top