Asiamoney best bank awards 2017: Best domestic and digital bank-Khan bank

2018-01-05 14:05 GMT+8

Which banks in each country have excelled across a range of core banking activities over the past 12 months? 

Best domestic and digital bank-Khan bank

Khan Bank is an outlier in Mongolia in many ways.

It has a diversified and international – by local standards – investor base that includes Japan-based Sawada Holdings and the IFC, the private-sector arm of the World Bank.

And it is both big and small. Big, in that it has more assets ($2.9 billion) than any of its domestic commercial banking rivals, an impressive digital banking presence, a solid priority banking service that it extends to mass-affluent customers and a growing army of corporate customers, ranging from mining giants to small and medium-sized firms.

It reported returns on its equity and assets of, respectively, 17.5% and 1.99% in the third quarter of 2017, handily beating all of its top-tier peers. It is also regularly more profitable than them, and made a net profit of Tug101 billion ($41.4 million) through the first nine months of 2017, a year-on-year rise of 43%. But Khan Bank is also proud to be small, in that it focuses on the little guy and does it well. Khan has more retail customers – 2.4 million in a country of barely 3 million people – than any of its main rivals.

It reaches them via a growing network of 537 branches and more than 1,000 ATMs. Khan Bank’s customers range from camel herders working alone in some of the harshest terrain on Earth to some of Mongolia’s largest companies. And it strives to treat them all equally.

Best digital bank: Khan Bank Mongolia is a fascinating case study in digital banking. A handful of years back, barely anyone in this frontier market went online to track and pay bills, transfer cash to friends, or pay for goods and services. 

All that has changed – and fast.  Khan Bank chief executive John Bell reckons the share of total retail transactions carried out in-branch at the counter fell to 6% in December 2017, from 60% three years before.  Lenders are falling over themselves to market their digital dynamism to customers; some, such as Trade and Development Bank of Mongolia, Arig Bank, and XacBank, offer a wealth of impressive online services.  But Khan Bank’s vast retail network – no other lender reaches more people, from shepherds to office workers, in more nooks and crannies of this vast country – gives it a healthy head start over the competition.

Khan Bank has grabbed its opportunity with both hands.  It was the first onshore lender to roll out phone banking, an around-the-clock call centre and drive-through ATMs.  It has more digital banking customers than anyone else. Its Qpay service allows customers to pay utility bills and taxes, make customs payments, open a new account and apply for a host of financial services, all via their smartphones.

Fingerprint identification technology, now widespread across the country, allows customers to log in to their accounts instantly and more securely. And in 2017, the bank rolled out its Khan Pay service, which allows customers to send money to their friends online, via Facebook.

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