ProCredit Bank moves up digitalization schedule in wake of pandemic
ProCredit Bank in Ukraine has successfully adapted to the challenges presented by the coronavirus pandemic by accelerating its intense program of digitalization and expanding its online banking platform, with the result that clients not only have easier, faster and more reliable access to banking services, but also at a lower price. "The market is prepared to go digital," ProCredit Bank in Ukraine General Manager Viktor Ponomarenko says. "We see this in the statistics. For example, the number of online transactions has grown significantly since the start of the lockdown," he explains.
Despite the push forward, none of this is new to the bank. Having long seen that the future of banking services is digital, the Germany-based international banking group launched transition programs well ahead of the pandemic, stage by stage, so that customers would have the time and support to adjust and learn. "What the coronavirus did was to force us to be faster in that transition," Mr. Ponomarenko says. "We have already changed a lot and plan to change even more to become more efficient and digital," he adds.
And that speedy transition is already paying off. While businesses and individuals in Ukraine have been hit hard by Covid-19, both the private and corporate portfolios of ProCredit Bank have expanded this year. "We are growing in all areas, despite the disruptions, from coronavirus to economic troubles to converting to digital formats. We feel that the more the market gets used to it, the greater the results we will see as early as next year. I have a lot of optimism," Mr. Ponomarenko says.
ProCredit Bank is making sure that its customers feel confident and secure, considering the many changes in the economic environment and within the bank itself. "The situation has affected our core customers, and there is much more uncertainty about the future," Mr. Ponomarenko explains. "We must maintain a solid, reliable bank, of course, while at the same time support the demands of our clients."
Growth in the time of coronavirus
Customer demand during this difficult time dovetails nicely into the bank's core principles - transparency and reliability - and rapid digital expansion. "Our advantage is the transparency we offer in our service package, cost of package and the business model itself, which allows us to be more competitive on this market," Mr. Ponomarenko he says.
The ProCredit Bank brand enjoys the kind of associations with security that few Ukrainian banks can match. As a result, numerous rating agencies consider ProCredit to be one of the most reliable banks on the market.
The main business line of ProCredit Bank is providing loans to small and medium enterprises, and so far this year, indicators show that the overall demand for investment and expansion in Ukraine has declined. Yet, despite the economic difficulties and distancing requirements, the bank has seen not only strong growth in the number of SME customers, but in the volume of loans as well. "The growth is not as heady as it was last year," Mr. Ponomarenko admits, "but that was to be expected. The main thing is that we are weathering the storm rather well. The bank has more challenges. We remain positive, so long as we adapt and learn from this how to do business in the future."
And this applies to the bank's other major business - servicing of private individuals - too. The attraction for them is comfort and cost. "Even though we are moving further and further into the digital way of doing business and reducing our physical infrastructure, which is a very strong step in terms of efficiency and innovation, we managed to grow in deposit volumes and number of customers even more than last year," according to Mr. Ponomarenko.
Migrating to digital makes sense
The bank has seen that people are becoming more enthusiastic about moving to online banking, especially since the start of the pandemic. Nevertheless, it is still not
established practice, except among young people. "Doing digital reform in the past was a challenge, but the pandemic situation is helping us to become more innovative, efficient and cost-effective right now. People are more comfortable with it now," Mr. Ponomarenko says.
That does not mean that the bank is willing to wait for change to come to it. ProCredit Bank has been encouraging its clientele in this direction because the switch to digital has a great many advantages over the traditional ways of banking. "Functionality is key," Mr. Ponomarenko explains. "Customers can easily and reliably perform most banking operations via e-instruments, such as web-based e-banking and via mobile applications. By now, our bank is able to process most transactions and needs of our customers online."
While ProCredit Bank has been rapidly expanding its digital presence, it has been shrinking its physical footprint on the banking landscape. This is all to the advantage of customers, says Mr. Ponomarenko, because the cost-savings from reducing the number of bricks-and-mortar banks and staff means lower fees and better service. "We still have a few physical branches, where our customers can perform their services. But we don't need them. We can service our customers online without any need for them to come to our branches," the general manager says. "We believe that the future is cashless and doing transactions online."
By concentrating fewer personnel, customer service staff can receive better and more frequent training, experience can be more readily exchanged, and response times to client needs are quicker. "I would also like to say that, by offering this format of banking services, we are able to provide a much higher quality of services. For example, with a large network of physical branches, it is a significant challenge to be able to offer qualified personnel everywhere of the same high level of service to customers. With a centralized, highly trained team of client advisors, we can offer much better and more consistent quality of service. This makes training and selftraining easier. The learning outcome is significantly stronger than with a scattered network with a few people in each branch."
According to Mr. Ponomarenko, ProCredit Bank wants to stay ahead of the curve in banking services no matter what the obstacles. However, he noted that the transition to digital banking is taking place faster than some customers and the bank can handle. This is why the bank is careful to provide comprehensive online support. "This is a step forward. We, of course, adapt our support depending on our customers' responses and concerns about shifting to e-banking. This is a positive – just the reality of the situation. This allows us to improve the satisfaction of our customers, and we are happy with that."
For ProCredit Bank, the migration to online banking does not simply mean replicating those services that were available at the old bricks-and-mortar branches. Rather, the shift requires a new approach to ensure that customers can get the most of the services offered in the most efficient way possible. This means simplification. "We took a bold step by reducing the options to do banking to exclusively the online format," Mr. Ponomarenko explains. "No client advisor is needed now.
We feel that this is much more transparent and comfortable for our customers, as they now have one clear, viable option without suffering confusion about where to go. It's straightforward, simple, transparent, and reliable."
And while banking is simplified, nothing is lost along the road to full digitalization. In fact, the level of access is broadened. "Digitalization definitely allows us to offer more to our customers in terms of variety of services as well as in the quality of services," Mr. Ponomarenko explains. "When we talk about the scope of services, our customers have access to private banking on the web and also install mobile apps on their phones, and with that they have access to pretty much all banking services that are available in Ukraine: card-tocard payments, utility payments, opening deposit accounts, foreign exchange transactions, international payments… everything."
And no more queuing!
With the rapid digital expansion, the only banking reason to leave your home is if you need cash. And even then, ProCredit Bank has stepped up its game, as the bank now provides fee-free access to all ATMs in Ukraine. "This is part of our plan for offering transparent and easy-to-understand packages. Pay the fee and receive all the services to satisfy your banking needs," Mr. Ponomarenko says.
Greater efficiency means lower fees
One clear benefit to clients in the headlong race towards web-based banking can be found in the fee structure. The operating costs for a bank in maintaining a network of physical banks are reflected in the fee structure, but the more digital the bank becomes, the more the costs drop, and these savings are then passed on to the consumer. "In this new format of doing business, we can offer a very transparent and attractive, from an economic standpoint, fee structure for our customers," Mr. Ponomarenko says. "We can talk all day about the advantages these new instruments bring, but the bottom line is the cost. The outcome of this model is quality service at a low price."
Unlike most banks on the Ukrainian market, ProCredit Bank charges a flat monthly fee, which opens the door to the full range of the bank's services, for private and business clients. "We charge a moderate flat fee, and so you are not confused about how much this or that service – transaction, payment, etc. – might cost. This is very important because of the need for transparency. All the more so on this market because so many people still face the unfortunate prospect of hidden fees. That is where we stand out," Mr. Ponomarenko explains.
Many Ukrainian consumers face a problem when transferring or paying a large sum, whereby a commission is charged for the transfer or even crediting of funds. ProCredit Bank offers free transfer of funds within Ukraine from card to card without commission. "You can even exchange currency online without additional payments. Everything is done with a few clicks using the mobile application. It's fast and safe," according to Mr. Ponomarenko.
Cost effectiveness is not the only benefit of going digital. ProCredit Bank's online services support and enhance the bank's guiding principle of transparency. Less paperwork means simplified procedures, and everything is laid out on the screen in a user-friendly interface.
To ensure impeccable security and comply with regulatory environments, the ProCredit Bank group maintains its own IT company that provides services to the group around the world. "This permits us to build instruments and software that are in demand from our customers, while at the same time it allows us to maintain security standards at a high international level," the general manager says.
Viktor Ponomarenko, General Manager ProCredit Bank