ProCredit Bank moves up dig­i­tal­iza­tion sched­ule in wake of pan­demic

Kyiv Post - - BUSINESS -

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

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