Teledirect: Media Clippings

REGIONAL outsourcing contact centre Teledirect Telecommerce Sdn Bhd aims to enhance its services by providing strategic advice to clients through its consultancy unit Teledirect Consulting.

The unit, which started in October 2007, is not your typical consultancy as it focuses on delivering results for its financial services clientele, said Teledirect Telecommerce chief executive officer Laurent Junique.

"We are not those consultancy companies that (only) deliver reports. For us, it's about strategic input to deliver money at the end of the day for our clients," he told Business Times in an interview.

Teledirect Consulting business director Jeffrey Manuel said banks are earning less gross margins due to intense competition.

"Banks need to look at other sources of fee income and this could be from the distribution of third party financial products such as insurance products and unit trusts," said Manuel.

He added that traditional life insurance distribution channel had shrunk by nine per cent from 82,500 agents in 2004 to 75,000 in 2006.

"According to Bank Negara Malaysia reports, premium income growth for the Malaysian insurance industry has declined since 2004 from 4.9 per cent of GNP (gross national product) to 4.5 per cent in 2006," he said.

Manuel added that while the local insurance industry has remained stagnant, it still has room for growth.

"Life insurance penetration here is only 40 per cent compared with 100 per cent in Singapore," he added.

He said that the annualised compounded growth rate for the insurance industry over the next 10 years is expected to be 10 per cent.

Meanwhile, Teledirect Consulting will help financial institutions grow via alternative distribution such as telemarketing and direct mail.

Junique said the company has successfully sold high amounts of life and general policies through telemarketing.

The target market would be the emerging affluent group with disposal incomes who are looking for a cost-effective channel, but faces time contraints.

"If you were to purchase insurance through an agent, the commission can go up to 170 per cent while the maximum commission a bank can make is 70 per cent," said Manuel.

He said banks that are successful in distributing insurance through telemarketing could make a profit of RM60 per customer.

"However, most banks here have not reached that level; they either do not telemarket their insurance products and at the very best, make RM20 to RM25 per customer," he said.

Apart from focusing on insurance, Teledirect Consulting will provide advisory services on banking products such as credit cards, usage programmes such as balance transfers and appointment settings for home loans as well as mutual funds.

It will also provide basic financial planning services to ensure income protection.

"We believe that it should be for the man on the street. Telemarketing will deliver that vision to bring financial planning to the masses," he said.

Junique added that telemarketing has a further reach where a telemarketer can attend to 50 customers a day, compared with relationship managers who meet eight customers a day.

"Since traditional agents waste a lot of time travelling, they focus on high network individuals who can give them higher revenue. We, on the other hand, can start offering more structured products and bring financial planning to the masses," he said. - By Jeeva Arulampalam