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THE OFFICE OF THE FUTURE CHANGES THE FACE OF BANKING IN RUSSIA

Yaroslav Popov

Moscow-based interactive marketing agency Engage (www.iengage.ru), a member of Digitas network, works with Russia’s Sberbank to modernise everyday banking. Yaroslav Popov, the company’s Managing Director, explains how advanced interactive technology improves customer experience and the perception of the brand.Yaroslav Popov

With 25,000 branches, nearly 300,000 staff and 70 million customers (this equals to half of the Russian population), Sberbank is the biggest bank in Russia and one of the biggest in the world. It’s now also the country’s most popular bank, although this hasn’t always been the case.

Historically, the Russians didn’t trust banks. In the last two decades, we had several banking and financial crises, when people lost their savings every single time. Most, therefore, didn’t keep their money in a bank for any length of time – they would simply go to an ATM as soon as their salary arrived, take the money out and keep it somewhere in their homes. On top of that, even though the Sberbank branches could be found anywhere and everywhere, they were ramshackle, with long queues, rude staff and bureaucratic processes. For most Russians, going to the bank was like going to the doctor – you only went when you had to.

The bank started to modernise in 2008 and, after three years, they reduced the queues by 38%, became the lead card issuer in Europe and invested in new, high-tech branches. Some branches featured 3D face scanning at ATM machines and, in terms of such new technologies, two years ago Sberbank were already way ahead of Europe and perhaps the rest of the world, too. But, although the bank now turns around 80% of all Russian money, the revolution isn’t over and both the bank and the government are continuing to try and position Sberbank as the most modern institution of the Russian economy. To achieve this, further work is required on remodelling the consumer behaviour and improving the customer experience at branch level.

The Office of the Future on Russky Island
By employing the latest in digital technologies, we’ve helped the bank design and create a thoroughly modern branch. Officially called The Office of the Future, it opened in September 2012 on Russky Island in Vladivostok, the largest Russian port on the Pacific Ocean. At the time the city was hosting the 24th Summit of the Asia-Pacific Economic Cooperation (APEC) forum and the heads of the international delegations, including the United States’ Secretary of State Hillary Clinton, visited the branch before it opened to customers.

The whole concept is based around the customer ‘journey’ (how the customer acts and moves within the branch depending on their needs – for example, the ‘steps’ they ‘take’ when they come in to open an account differ from the steps they take when they just want to make a money transfer), and implements interactive technology to make this ‘journey’ easier and better.

At the beginning of their ‘journey’, what the customer sees even before they walk inside the branch, is a high-resolution interactive video wall displaying Russia’s landscapes of lakes, hills and snow-capped mountains, different time zones and the weather. Against this backdrop, infographics present financial information such as the Central Bank’s exchange rate, the MICEX stock prices and the precious metals rate chart, and the customer can get more detailed information by touching on any of the charts.

When they enter the bank, they are greeted by a touch-screen robot assistant. It’s a terminal that looks a bit like Wall-E from the movie Wall-E: it has eyes, it smiles and shows emotions. Customers can do simple internet banking at this terminal or, for more complex transactions, they get allocated a number in an electronic queue and move to the waiting area.

While waiting, they can sit at interactive multi-touch tables, with an Internet browser, access to Sberbank online and specially created games pointing to a catalogue of Sberbank’s products. For example, there’s a game that takes you travelling and, of course, you will need a credit card, card protection and travel insurance – all these products are integrated into the game, which helps facilitate cross-selling.

When the waiting area screen shows it’s their turn, the customer is directed to another terminal, this one with two interlinked screens. On one screen they carry out transactions, on the other they can see a human assistant who helps them by answering their questions or by showing them remotely which buttons to push. This bank clerk can be based in a call centre anywhere in the world. If this terminal doesn’t fulfil the customer’s needs, they can see a bank clerk within the branch, but the emphasis is on meeting most of their needs with clever, yet still user-friendly, technology.

Happy customers and more cross-selling
By implementing these latest interactive technologies, Sberbank has updated its once-conservative and stuffy image, and brought the customer experience well into the 21st century. Its customers now interact with the bank more openly and more frequently, and have fun doing it. They also buy more financial products from Sberbank, which was the second objective of this exercise – when you already have 70 million customers, it’s not so much about attracting new ones but about increasing cross-selling to the existing ones.

We are now discussing with Sberbank how to roll out the technologies implemented on Russky Island on a larger scale across Russia. Obviously, the investment into this showcase branch was considerable and may not be repeated elsewhere, but we can scale the technologies down to serve the same task: encouraging customer interaction and cross-selling.

Finally, are the Russky Island’s customers happy? The bank certainly thinks so. After all, some of the cameras installed measure their happiness levels.

Yaroslav Popov is MD at Engage (www.iengage.ru), an interactive marketing agency. Founded in 2010 in Moscow, Russia, and affiliated with the leading international network Digitas, the agency provides a mixture of digital creative, strategy and technology. Its current clients include Nissan, Sberbank, Bayer, Amway and Sanofi Aventis.

 

 

 

 

Banking

It’s all relative: Older generations feel helping out the family financially is more important since the Covid-19 outbreak

It’s all relative: Older generations feel helping out the family financially is more important since the Covid-19 outbreak 1

Before Covid, 23% of people prioritised helping younger generations out financially, that increased to a third as a result of the pandemic

A recent survey* conducted by Hodge has revealed that the Covid pandemic has led to more people wanting to help younger family members financially.

A third (31%)** of those questioned said that since the Covid outbreak giving a financial gift to children or grandchildren is more important to them, compared to 23% who said it was a priority before the pandemic.

The traditional “Bank of Mum and Dad” is still very much open for financial help, with parents being responsible for 72% of the gifts, but the study also revealed that financial gifts can come from all corners of the family – including children (14%) and siblings (14%).

The survey also found that a third of people have received a financial gift from family, with those aged between 25-34 as the most likely to receive

The most popular reason for gifting money to family is for special occasions such as a quarter of gifts were given for weddings and birthdays but 11% of people have received money to help with big purchases such as cars and houses. In addition, 19% of people have received help with day to day finances, with around 14% of those receiving a gift have done so to pay off debt.

Emma Graham, Business Development Director at Hodge, said of the research: “Our study showed that, as a nation, we all want to help our family out when it comes to money. And whilst we all think of the Bank of Mum and Dad or Gran and Grandad as a traditional source, we were surprised to see that 14% of brothers and sisters are also helping out.”

The findings come from a recent intergenerational study conducted by Hodge, who interviewed over 3000 people about their attitudes towards finances and their aspirations for the future. The full research findings can be found at https://hodgebank.co.uk/2020/05/19/money-its-all-relative/.

As part of the study, people were also asked about paying back the gift, with 40% of beneficiaries expecting to pay their parents back, but this dropped to 28% if the gift came from grandparents.

From the gift donor’s perspective, 26% expect the gift to be paid back, however just 15% of grandparents expected the money back.

Hodge has produced a set of guides on how families can navigate the tricky subject of giving financial gifts within a family, as well as the considerations and steps that be families should think about taking before a gift is given, such as is it a loan or a gift and thinking about contingencies if the family member’s circumstances change. The guides can be found here: https://hodgebank.co.uk/news/

Emma continued: “It’s clear that families feel strongly about offering financial support to each other if they are able and this has increased since the Covid pandemic. Before Covid, 23% of people prioritised helping their families out financially in the next five years. Since the Covid-19 outbreak that has increased to a third of people saying helping a family member financially had become more important.

“So, it is clear that the Covid-19 lockdown and subsequent predicted economic downturn, has led to more families looking to share wealth to help younger children or grandchildren during this difficult time. Many people may look to Later Life mortgages, where many products have reduced their rates and have flexible lending criteria, to help out a loved during these difficult times.”

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Banking

New report identifies the factors which will determine SMEs’ chances of a successful COVID recovery

New report identifies the factors which will determine SMEs’ chances of a successful COVID recovery 2

·         Analysis of the performance of over 1,000 UK small and medium-sized businesses by Allica Bank provides roadmap for SMEs 

·         Regular training, an openness to innovation, and a clear vision all contribute heavily to an SMEs’ chances of success  

·         Allica Bank has launched a programme of free workshops to expand on the findings and support business owners 

Business bank, Allica Bank has combined data and insight from over 1,000 UK SMEs with a multiple regression analysis to determine what factors most closely aligned with an SMEs’ chances of success and separated the highest-performing businesses from their peers. These ‘rules for success’ have been compiled from the research data to support British businesses as they look to chart a course to post-Covid recovery.  

The full report identifies six behaviours for small and medium businesses to follow, to maximise their chances of a successful COVID recovery. The six top-line rules emphasised by the data were: 

Rule 1: SMEs should regularly train staff 

Of the top-performing businesses analysed, 47% provided training for employees at least on a quarterly basis, compared to just 32% of other businesses. Regular employee training was linked closely to success by the model.  

Despite this, many small businesses have neglected training and nearly half (46%) of the small businesses analysed only provide training for employees about once a year or less often. This included 15% that never provide employer-funded training. This discrepancy could represent a significant opportunity for small businesses to unlock the potential of their employees and thrive in the post-Covid economy. 

Rule 2: SMEs need to focus on innovation and technology 

Looking again to the best performing businesses, 76% were found to either continually (39%) or often (37%) be considering new opportunities for technology in their business. This is compared to only 51% for businesses considered to be outside of the top ranks, out of which only 27% admitted to continually looking for new technology opportunities. 

Rule 3: Small business must have a formal, long-term vision  

Nearly two thirds (66%) of the most successful businesses in the survey had a formal, long-term vision, compared to just 50% of businesses outside the top 100. Looking to the businesses that scored the lowest on the SME Performance index, only 37% claimed to have a formal, long-term vision. 

Rule 4: SMEs should broaden their customer reach and find new markets 

Of the top-performing businesses, 65% of these have overseas customers compared to just 40% of the worst performing businesses. Among the best performing SMEs, over a third (34%) identified international expansion as one of the top three drivers for their success. 

Rule 5: SMEs need to develop reinvestment plans 

22% of the best performing SMEs reinvested some of their profits into the business in the past three years with an average 9% of profits being redeployed. Tellingly, this is nearly double what other businesses admit to reinvesting in their business (5%). 

Rule 6: SMEs should engage with local business organisations and networks  

Of the top 100 SMEs, 30% had obtained external credit to expand over the past three years (compared to 24% of other businesses). Meanwhile, only 16% of all other SMEs had engaged with local enterprise partnerships or growth hubs in the past three years (compared to 23% of the top 100 SMEs). 

Chris Weller, Chief Commercial Officer, Allica Bank, said: 

“All small businesses are different, as are all small business owners, but one trait they share is an innovative resilience. Whilst the coming months and years will undoubtedly continue to present extreme challenges, there is no doubt that small and medium sized businesses across the UK will rise to meet them head on.  

“To give them the best chance to succeed, though, they need to be equipped with the right tools. There is certainly no silver bullet or panacea for every small business, but as this study has found, there are a number of common factors found in the most successful businesses that allow small enterprises to thrive and that they can consider individually for their business.  

“This research has identified common ‘rules for success’ that speak to every aspect of running a business, not just the financials. Once we saw these results, we wanted to use them to help small businesses begin to re-build and prosper, by outlining common factors and then examining how best they can be practically applied to businesses in all sectors of the economy.  

“Small business owners and their employees have been hit hard by the crisis, but they have the drive and resourcefulness to breathe new life into the economy and bring energy to post-Covid Britain. Our commitment at Allica Bank is to give them the support they need to do so, every step of the way.”

The full report contains a wealth of additional data and insight into each of these topics. As part of its mission to empower small businesses, Allica Bank is making the findings freely available and running a series of free online workshops with relevant partner organisations for businesses to attend.

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Banking

New research finds that financial wellbeing should be at the heart of banks digital experiences as the UK enters recession

New research finds that financial wellbeing should be at the heart of banks digital experiences as the UK enters recession 3

MullenLowe Profero have today launched a new report focusing on two communities who will be hardest hit by the recession: 18-25 year olds and small businesses. These communities need financial wellbeing support at the core of an increasingly digital relationship. MullenLowe Profero partnered with Censuswide to survey 1,004 18-25-year-olds and 504 small businesses.

Concern around financial shocks is harming individual’s wellbeing

The survey finds the ability to absorb financial shocks being the critical worry affecting wellbeing and 40% of 18-25-year-olds are sometimes afraid to look at their bank account.

They are seeking financial education to relieve worries

With over two-thirds of respondents demanding financial education in order to find peace of mind and 40% of 18-25-year-olds state that thinking about their money has a negative impact on their wellbeing the report highlights the audience are open to more active support from banks. 60% of the audience feel banks should help them have the capacity to absorb a financial shock.

When our bank is in our pocket reminding us of our anxieties, is there now a duty of care to support our wellbeing?

The survey finds that the digital experience is now the number one reason for choosing a bank for 18-25 year olds.

With this shift in digital preference, people are expecting banks to play a bigger role in wellbeing. 58% of those worried about their money want banks to help them take control.

More than half of 18-25 year olds agree that a bank’s role is now to:

  • provide education on money management
  • help them keep on top of financial goals
  • help them save enough money to cope with the ups and downs of life

People are feeling closer to local communities, but there is a gap in how brands should engage communities in a digital world

Half of 18-25 year olds agree that in the last few months the importance of their local community to them has increased. 40% agree they’ve engaged more with their local community in recent months. There’s a tension between how to engage a community as 60% agree they prefer a bank with better digital tools over a bank that offers more local branches. However, 60% feel banks need a branch presence to support local communities.

The importance of Global Wellbeing rises

Over half of 18-25 year olds agree that the events of the last few months have made them seek out brands that do better for the world. The research findings show that what they want most is to be recognised for their positive behaviours. 56% of the audience highlighted that they would find rewards and benefits for purchasing ethically and sustainably most useful.

Banks digital experience today lack empathy

In this time of reset, the survey found a third of customers and small businesses are considering changing banks in the next year as a result of the impact of the pandemic. The report concludes that brands that will win will champion financial wellbeing in the digital experience through empathy and emotional intelligence.

For the full report, get in touch with MullenLowe Profero at [email protected]

Howard Pull, Head of Digital Transformation Strategy at MullenLowe Profero, said: “Our findings are a wake up call for digital innovation in banking relationships.  With digital experience being the number one choice for selecting a bank, there’s a huge opportunity for banks to support individual wellbeing at scale by understanding and responding to our goals and anxieties to build better money habits.”

Methodology

The research was conducted by Censuswide, with 1,004 18-25-year-old current account holders and 504 small businesses with business bank accounts and annual revenues up to £2m between 23.06.2020 and 29.06.2020. Censuswide abides by and employs members of the Market Research Society which is based on the ESOMAR principles.

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