I&M to focus on advisory services to reduce non-performing loans
What you need to know:
- According to Mr Sam Ntulume, I&M Bank wants to ensure that clients are equipped with enough information while making decisions to acquire different loan products
I&M Bank has said it will increasingly focus on advisory services to clients as a way of helping them to understand banking services in order to make the right investment decision.
Speaking at the launch of its offshore banking account services that seek to meet the needs of those in the diaspora, Mr Sam Ntulume, the I&M Bank executive director, said banking has changed over the past years and requires new ways of meeting client’s needs.
Therefore, he said: “As we give loans, we shall focus more on the advisory services to clients to help them make the right decisions and take the right products. It will also help the bank guard against the increase in non-performing loans”.
Mr Ntulume also noted that the changing nature of the banking calls into question the revenue- generating ability of banks’ relationship - oriented business model employed in their advisory service function - to save clients from taking the wrong products, which turns out to be too costly and impact negatively on both banking and clients’ businesses.
Banking, even though has demonstrated a lot of resilience, amid a number of challenges, remains a fragile sector, threatened by mostly an upsurge in non-performing loans.
Therefore, Mr Ntulume said I&M shall use its expertise to correct clients from making mistakes such as getting loans to invest or acquire products whose returns do not match repayments schedules.
Many clients, he said, have drawn products such as overdrafts yet many do not understand that they are really acquiring loans.
An overdraft requires banks to impose additional fees or penalties if an account is overdrawn and, Mr Ntulume said, exposes a client because it allows them to draw an amount of money, which is more than what they hold in their accounts.
Mr Ntulume also indicated that since taking over Orient Bank, I&M has enhanced its investment in Information Technology infrastructure to improve banking services and digital innovations.
“We are providing customers with a range of digitally based service solutions, because banking has changed a lot and for us to remain relevant, we have to focus on the digital perspectives,” he said.
Mr Ntulume also indicated that I&M Bank had formed a partnership with MTN to provide backup systems, further indicating that the bank was also in the final stages of another partnership for data centre service to enhance mobile and internet banking.