Effective Deposits Mobilization Strategy For Commercial Banks In Malaysia With A Special Case Study On Affin Bank

by Amani Aishah Razali


In this study entitled: Effective Deposits Mobilization Strategy for Commercial Banks in Malaysia with a Special Case Study on Affin Bank is aim at identifying a key deposits variables that banks can factor in their deposits mobilization strategies. This is undertaken in recognition of the fact that deposits mobilization is a critical activity for the growth and profitability of commercial banks. Fundamentally banks provide the twin functions of custodians of society’s wealth for savers, on the one hand, and provider of funds to borrowers (i.e. credit creation) on the other. Researchers recognized the modern day banking have added numerous other services including mediator of funds, provider of capital, delivery of monies, facilitator of international trade to smoothen the commercial and economic activities of modern days society. Nevertheless, deposits are critical resource for banks to fund their business growth and profitability. The variables that have been identified and factored by researchers to attract deposits to commercial banks include exogenous and endogenous factors. The exogenous factors include among others the country’s economic social factors, interest rate and etc. Namely these are factors that are beyond the control of the bank. On the other hand the endogenous factors are within the control of the banks which include the bank’s location/ accessibility, service, premises, convenience and etc. In line with the study and focusing on the case of Affin Bank Berhad the researcher had conducted surveys to test the validity of certain deposits mobilization factors affecting Malaysian Banks such as advertisement effectiveness, initiative effectiveness, interest rate and product features. Using 66 respondents from among Affin Bank branches and application statistical methodology (such as ANOVA, AMOS, regression analysis and descriptive analysis), the researcher have recorded the following findings: 

  1. While interest rate is recognized as a key competitive factor for the attraction of deposits to bank, it is only effective if the factor is applied in tandem with initiative effectiveness managed by the banks Head Office officers complemented by the branch managers and officers. 
  2. ii. In addition, point-of-service accessibilities and service excellence must be in place to be ahead of competitors on sustainable basis i.e. to enable banks not only to attract new customers/ depositors but also to maintain and built the existing ones. 
  3. iii. In the age of new technology, bank management could not blindly transplant technology with personalized, traditional banking with a smile. This is because bank’s customers prefer human orientation as against machine orientation way of transacting business especially for the bank’s depositors. 

Although the researcher noted most studies recognized deposits mobilization as a key activity for bank’s growth and profitability, competitive challenges in the future demands that bank management need to look beyond deposits mobilization towards income optimization as depositors keep searching to maximize their investment possibilities with their savings. Thus, is essential that studies in respect of investment maximization to complement deposits mobilization be among the future focus of research to benefit commercial banks in terms of eir growth and profitability in the future.

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