Vladimir Padanin, Deputy Chairman of the Management Board of Bank ZENIT, on the development of Private Banking and the start of reorganisation of ZENIT Banking Group’s business in Tatarstan.
ZENIT Banking Group has recently announced the reorganisation of its business in Tatarstan. This move will have an effect on the Group’s two subsidiaries in Tatarstan – Bank ZENIT’s branch and Devon-Credit, a subsidiary bank headquartered in the city of Almetyevsk. What is behind this move?
Some history can better explain the background of what we are now doing. Bank ZENIT, where Tatneft is a major shareholder, has actively operated in the Republic of Tatarstan since the second half of the 1990s. In the mid-2000s, we realised that there was a need to broaden our regional presence, including by way of acquiring successful local banks, which would enable us to develop our business in Tatarstan and across Russia. In pursuing this goal, in 2005, we acquired Bank Devon-Credit. Actually, that deal was the beginning of the Banking Group. Today, ZENIT has its banking subsidiaries in the cities of Sochi, Tula and Lipetsk, while Tatarstan is now the only region where ZENIT’s branches compete internally with the subsidiary bank. Bank ZENIT and Bank Devon-Credit are universal banks and they offer largely the same range of banking services in Tatarstan. The time has come for us to eliminate unnecessary competition within the Group.
The reasons for taking these steps are easy to understand. But how do you see the reorganisation in particular?
We identified the strengths of each bank before we began reorganisation, and have focused on these areas in particular. As a result of this reorganisation, Bank ZENIT’s Banking Centre TATARSTAN will focus on corporate and private banking segments. Bank Devon-Credit’s priority areas will include mass retail and SMBs. Accordingly, Bank Devon-Credit will receive the portfolios of Bank ZENIT’s retail and SMB clients in Tatarstan.
Why did you choose this arrangement?
The reason is quite simple. On the one hand, Bank ZENIT is a large federal bank with significant capital and assets. Bank ZENIT is able to extend large loans to corporate clients, where necessary, and has extensive experience in offering services to large businesses. In addition, ZENIT has traditionally occupied a leading position in Private Banking. Suffice to say that The Banker and Professional Wealth Management magazines have named Bank ZENIT the best Private Bank in Russia in 2012.
On the other hand, Devon–Credit has experience in the retail and SMB segments. The bank has an extensive network in Tatarstan, which is needed to offer services to retail clients and SMBs and this network will grow even further as a result of the reorganisation. In order to consolidate its position on the retail market, we have decided to transfer the necessary banking infrastructure to Devon-Credit, including several offices and most of Bank ZENIT’s POS-terminals in Tatarstan. When viewed in the light of its brand, infrastructure and technologies, Devon-Credit is better positioned for operations in the retail and SMB markets in Tatarstan.
As a result, Devon-Credit will have a portion of Bank ZENIT’s customer base. And what does Bank ZENIT receive in return?
It is very important to be aware that we are a single Banking Group and the decision-making process is a part of the common corporate strategy, in other words, we assess the results of the reorganisation for the entire Group. In this case, according to our estimates, we will be able to raise the effectiveness of business and reduce expenses. In addition, we will eliminate internal competition, which in turn, will enable Bank ZENIT to capitalise on the development of sectors, where it has traditionally occupied strong positions, i.e. attracting and offering services to major corporate clients with an annual turnover of over two billion rubles, and Private Banking.
But how mature is Private Banking in Tatarstan? Why have you made it a priority? What are the future trends in Private Banking in Tatarstan?
Firstly, I would say that the Republic of Tatarstan has always been and still is one of the richest Russian regions. For this reason, Private Banking in Tatarstan has actively developed over the course of at least last decade. Bank ZENIT was among the largest Russian banks, which began to offer private banking services in Tatarstan at a professional level.
Today, we have quite a developed market for private banking services in Tatarstan and high activity of the largest Russian banks in this sector is another indication of this. In particular, services for high net-worth clients are in most demand in the capital of Tatarstan and in its biggest business centres.
I would say that a shift from Private Banking for individual clients to a more comprehensive servicing of affluent families will be the main trend in the near future. At the Bank, we have also set a goal of launching in Tatarstan the most comprehensive line of banking products and services, which have been so far only available on the international markets.
What can the clients expect from these changes? How would they benefit from this reorganisation?
We believe that a more targeted approach will allow for a better quality of banking services. In addition, we have identified a way of transferring the retail portfolio from Bank ZENIT to Bank Devon-Credit that would be the most comfortable for our clients. Every individual client of the bank, as well as every SMB client, will be offered to be serviced by Devon-Credit Bank. Overall, the terms of service and costs of lending will remain unchanged; however, the servicing/lending bank will be different. We will discuss the terms and conditions with each individual or corporate depositor, and of course, on the most advantageous terms for our clients.
Can you give an example of a bank or a non-financial organisation, which has optimised their business in a similar way? Or has ZENIT Banking Group pioneered the market with this reorganisation?
We did not mean to reinvent the wheel. A segmentation in large financial and non-financial organisations, which is based on targeting various customer groups is not unusual. I would give the example of VTB Group, where VTB Bank focuses on offering banking services to major corporate clients, while VTB24 prioritises the retail segment. A most recent example is the planned merger of NOMOS-BANK with OTKRITIE Bank, where based on media reports, each credit organisation will have its priority area. Therefore, in carrying out this reorganisation, we are a part of the mainstream.
Did you have consultations with the management of the National Bank of the Republic of Tatarstan about the planned changes? What is their view?
Indeed, any important decision has to be a subject of consultations with the regulator. I can say that the National Bank of Tatarstan has approved our project.
The market for banking services in Tatarstan is now quite mature. Do you expect any new strong market players coming (banks which operate on federal level or subsidiaries of international companies)?
The banking market in Tatarstan is highly competitive. There are branches of federal banks, local banks with federal reach, and relatively small local banks. However, some biggest federal banks have no presence in Tatarstan so far, including banks with foreign investments. The increasing competition may urge them to enter the banking market in Tatarstan. I think they may choose to enter the market by acquiring a local bank.
Q&A with Clare George-Hilley, co-founder, Centropy PR
Clare George-Hilley is the co-founder of Centropy PR
Global Banking and Finance Magazine recently caught up with Clare George-Hilley, co-founder of fintech and financial services specialist PR agency Centropy, as the company toasts to three years of trading. We asked Clare about what life is like running an agency in the city, the trends she is seeing in the financial services space and what the future holds following the Covid-19 outbreak.
Why did you decide to set up Centropy PR?
I was looking for an opportunity to launch my own agency, both my husband and I had been in the public affairs and public relations industry for over a decade and we thought the time was right to go out on our own.
We could see that the financial services industry was surging, with challenger brands and new technology transforming traditional banks and setting new standards of customer service. There was a huge market opportunity to create and launch a PR agency that could provider first class comms support, alongside a deep understanding of complex regulations such as AML, KYC, and the GDPR. Likewise, many traditional technology firms are diversifying their offerings, to tap into the growing market opportunity posed by the fintech boom.
So, we worked on a business plan, designed a strategy for winning clients and officially launched in September 2017. Within a few months we had a growing portfolio of clients and a thriving business, since that point, we have never looked back!
How is Centropy doing now and what are you plans for growth?
The last three years have flown by and our client portfolio has grown and diversified quickly. We now manage PR campaigns for clients on everything from cryptocurrency, wealth management to payments and trading software.
We’ve also hosted parliamentary debates with key industry figures, including Members of Parliament (MPs) on topics such as the future of the financial services industry and the impact of challenger banks on traditional providers. The team is expanding quickly and we’re investing heavily in the latest training and support to ensure our team members are equipped to reach their full potential.
How do you see the next 12 months?
The Covid-19 outbreak has crippled the economy, forcing millions of people to work from home due to the very serious health risks. The knock-on effect of this crisis will lead to companies cutting costs where possible to save jobs, so tech will play a vital role in ensuring many businesses stay afloat.
We are already working with contactless payments specialists and other fintech companies that offer solutions to help companies survive and thrive despite the inevitable challenges ahead.
We aim to continue building our portfolio of expertise, testing ourselves with new challenges and delivering the best possible service to clients
This is a Sponsored Feature.
Lessons from past recessions and advice for business owners during the coronavirus pandemic
By Neil Davis, managing director and co-founder of Sterling Networks
What is Sterling Networks?
“Sterling Networks is a professional organisation founded in 2014 which facilitates networking events for businesses across the Midlands, Oxfordshire, Wiltshire and the South West. Over 300 members attend our fortnightly breakfast and lunchtime meetings.”
What is your background prior to establishing Sterling Networks?
“During the 1990s, I worked in the corporate team for Halifax. My wife, Tracey, and I went onto own a manufacturing business, which was also called Sterling, and produced a range of gifts, merchandise and promotional items.
“We soon realised tradeshows were a great way to meet distributors and clients. From there, the business grew exponentially, and we managed to build a network of around 500 distributors. Eventually, we became ground down by the manufacturing business – in part because the local manufacturing sector was being devastated by competition from China – and took the decision to sell the business and relocate to Spain.
“After spending several years living abroad, we moved back to the UK to set up Sterling Integrity (EXPO’S) & Sterling Networks (Networking) We were inspired by a desire to help businesses make meaningful connections with one another, and we haven’t looked back since.”
The UK has recently entered a recession, brought about by the coronavirus pandemic. What have you learned from past recessions and how are these experiences helping you to navigate the current crisis?
“I’ve lived through a number of recessions and have seen the pain that insolvency causes companies on a large scale. It’s taught me that there are those who win and sadly those who lose, and that businesses must adapt to a rise in demand for certain products or services at a time of financial crisis.
“Given the nature of what Sterling Networks offers [an opportunity for business owners to connect and grow together] I decided we could build upon the brand due to the demand for new business during the pandemic. We therefore moved our networking events from face-to-face to virtual via tools like Zoom and have gained a steady stream of new members in recent months, reaching an overall total of well over 300.
“On top of that, we’ve taken new staff on during the crisis and have launched a number of new regional groups across the country. I was determined that Sterling should come out of the pandemic with a head start, so my attitude to the recession has been much more positive than those who are forecasting nothing but doom and gloom.
“We can’t pretend high street retail wasn’t suffering long before the pandemic came along, and thousands of new businesses are sure to start up to meet the demand for the products and services that people require at a time such as this. In order to develop and grow businesses need to focus on where changes need to be made to meet this demand.”
Sterling Networks has been providing emotional support to its members throughout the pandemic. What advice have you been giving to members that could be useful to other business owners?
“I try not to be too opinionated and respect other people’s views when giving advice to members, as there are always two sides to every circumstance. I’ve been careful not to say to people that they should be doing one thing or another, as I don’t know their business and its needs quite like they do. The only thing that I have been telling members is the importance of setting up one-to-ones with one another. By doing so, they can listen to the needs and concerns of other, like-minded business owners and work out ways that they might be able to help one another.
“The pandemic has meant we all have a bit more time on our hands, so the advice I would give to people is to use this extra time wisely. Not having to travel physically from one meeting to another means there is a greater opportunity to connect with more people. It’s important to remember that individuals outside of your business can be just as valuable as those within it.”
What makes you hopeful for the future and are there any words of encouragement you can give to budding entrepreneurs?
“The key events that have happened to this country during my lifetime – whether wars, recessions, or the pandemic – have enabled me to take stock of things. While these experiences are certainly challenging, we all become stronger for living through them, and it gives me great confidence that the world will ultimately improve as a result of the pandemic.
“The whole world is effectively rebooting right now, as is the business community. I like to think entrepreneurs will recognise this opportunity to take better care of their peers, and this translates to greater collaboration between organisations. Speak to as many people as you can, ask all the questions that you need to and do your homework. This might well be a difficult time for us all but planning for the future must start now if it is to become as prosperous as I know it can be.”
Exclusive Interview with Ugo Loser, CEO of ARCA Fondi SGR
Arca Fondi SGR is a mid-sized Italian active asset management company. Founded in 1983 by a consortium made up of 12 regional banks, the company has grown in time, expanding its network of distributors and its client base. Nowadays Arca manages Mutual Funds, Pension Funds and Institutional Accounts with total AUM exceeding 30 € bln, reaching more than 100 banks and financial institutions and serving more than 800,000 final clients.
What are the key contributors to ARCA Fondi SGR’s success over the past 35 years?
Arca has always put clients and distributors first. That is to say we have always privileged fair pricing for funds and developing high quality products and services for our customers. This requires constant innovation as an objective and looking for people’s talent to be free to produce its effect
Why are people the founding element of ARCA Fondi SGR and how have you sustained this vision over the years?
We work in small teams, people are young and motivated and can perform duties with a high level of autonomy and responsibility. Innovation is asked to everyone, everyday
What makes Arca Fondi SGR different from other asset management firms in Italy?
Arca is a company focused on doing what it can do very well, that is to say mutual and pension funds, services for clients and banks. We never follow short term trends but always look for long lasting impact on the industry, like we’ve done may times in the past
What products/services has ARCA Fondi SGR pioneered?
Arca has been the inventor of “Arca Cedola”, fixed-horizon, coupon paying funds, which have been with no doubt the greatest product innovation of the past 12 years on the Italian market. This type of funds, at first strictly based on bonds and later as a balanced product, has encountered an enormous success both with clients and distributors due to its simple and effective value proposition. Arca is a market leader also in the “PIR” segment of funds, a range of product focused on mid and small sized companies, that have been the best performers in the Italian stock market for the last few years. In services, Arca is a leader in technology applied to asset management. Our website, app and digital services for clients and banks are award winning, state of the art combination of data, technology and channels, and the best is yet to come on this side.
What strategies do you have in place to sustain your market position and withstand professional competition in the country?
As I mentioned, we do not waste resources on projects with dubious results, instead we constantly invest on people, products and services. The high level of profitability that Arca has been able to maintain even in difficult years for the markets of the banking sector is a further testimony that this strategy works very well
How do you use technology to create meaningful experiences for your customers?
First of all, we have created a whole new division, Arca InnovAction Lab, dedicated to technology, data and processes. This ensures projects are delivered quickly and they are free to leave bad past practices behind. Arcaonline.it, Arca’s website, provides distributors with detailed information on clients’ portfolios, asset under management and subscription/redemption requests. It monitors aggregate selling data offering to our partners a suite functions and analytics to track commercial campaigns. And if the banks branches need assistance, they may ask Sara, our digital chatbot. A broad and timely multimedia production, covering exclusive reports, comments, presentations, videos, webinars and newsletters is also available on the website.
Customers, subscribing Arca’s funds through its distributors’ network, may access Arcaclick, a dedicated area on Arcaonline.it. With Arcaclick the client can easily browse through her portfolio of funds, analyze its characteristics, view transactions and historical funds’ performance in customizable views. Arcaclick is also a powerful source of information on Arca product range: Prospectus, KIIDs and other literature is easily accessible along with news, comments and reports. Arcaclick may also be accessed via Arca Fondi App, a free application for mobiles and tables, running on both iOS and Android. Available 24/7 and in mobility, Arcaclick gives clients the opportunity access information, news and details of their personal portfolio anytime and anywhere.
What key trends will drive pension growth in 2020 and beyond?
The Italian market for pension funds is still very small and therefore there is a great opportunity to grow. Arca Fondi manages the biggest open ended Italian pension fund and it’s been constantly at the top of its rankings. As people and workers are looking for yield and to weather short term volatility, the pension fund is very well poised to profit from this trend.
The importance of app-based commerce to hospitality in the new normal
By Jeremy Nicholds CEO, Judopay As society adapts to the rapidly changing “new normal” of working and socialising, many businesses...
The Psychology Behind a Strong Security Culture in the Financial Sector
By Javvad Malik, Security Awareness Advocate at KnowBe4 Banks and financial industries are quite literally where the money is, positioning...
How open banking can drive innovation and growth in a post-COVID world
By Billel Ridelle, CEO at Sweep Times are pretty tough for businesses right now. For SMEs in particular, a global financial...
How to use data to protect and power your business
By Dave Parker, Group Head of Data Governance, Arrow Global Employees need to access data to do their jobs. But...
How business leaders can find the right balance between human and bot when investing in AI
By Andrew White is the ANZ Country Manager of business transformation solutions provider, Signavio The digital world moves quickly. From...
Has lockdown marked the end of cash as we know it?
By James Booth, VP of Payment Partnerships EMEA, PPRO Since the start of the pandemic, businesses around the world have...
Lockdown 2.0 – Here’s how to be the best-looking person in the virtual room
By Jeff Carlson, author of The Photographer’s Guide to Luminar 4 and Take Control of Your Digital Photos suggests “the product you’re creating is...
Banks take note: Customers want to pay with points
By Len Covello, Chief Technology Officer of Engage People ‘Pay with Points’ – that is, integrating the ability to pay...
Are you a fighter or a freezer? The 4 “F’s” of Surviving Danger
By Dr.Roger Firestien, Author of Create In a Flash. The fight, flight, freeze survival response – or FFF for short...
Why the FemTech sector might be the sustainability saviour we have been waiting for
By Kristy Chong, CEO & Founder Modibodi ® Taking single use plastics out of circulation is no easy feat, but...