Galyna Zhukova, Deputy CEO of Credit Agricole Bank, about the latest and hottest trends in Ukrainian retail banking, innovative concept of service in new model branches and the role of agile methods in digital transformation of the bank.
– What is the current situation in Ukrainian banking sector?
– Over the few last years, Ukrainian banking system has undergone significant positive changes. First and foremost, it is a wide-scale clean-up initiated by the NBU. It resulted in reduction of the number of financial institutions, which facilitated the entire system turnaround and recovery of confidence of the population and businesses in banks. Moreover, currency market liberalization is on and it is positively perceived by both banks and customers. Changes are supported by toughening of compliance control applied by banks for deeper understanding of customers and their activities for compliance with Ukrainian financial legislation. And though such practice is still unusual for some clients and creates some lack of comfort for them, this is the standard under which the global banking industry operates.
– What other trends are relevant for today’s retail banking?
– To begin with, the process of Ukrainian banking system clean-up allowed many banks to become truly profitable. However, it is obvious that is will become more and more difficult to earn as the margin starts decreasing gradually. Such trend is especially visible in the corporate segment but for retail it will come soon as well. Therefore, the main sources of profit generation for banks today are transaction business, loans and deposits. But it is not that easy to earn as customers are now more demanding: they seek fast and high-quality online services. This means new challenge for Ukrainian banks that makes them to actively improve their Internet-banking systems and expend mobile application functionalities. Demand for the so called “simple solutions” in all types of online-services and products is growing as well. However, it is harder for banks to create such “simplicity” than it may seem. It requires huge efforts: both financial and human. Thus, today the competition for customers among the bank is moving towards the enhancement of technological level.
– How does Credit Agricole Bank manage to meet permanently growing expectations of its customers?
– This is rather difficult since we are not the largest, not the most technological and not the most aggressive in terms of business development bank in Ukrainian market. Nevertheless, we are among the Ukrainian banking sector leaders. I think, the secret is that such values conveyed by our bank as reliability, stability, transparency and integrity are relevant and clear for our partners and customers. In Credit Agricole, all fees are disclosed and before making decision on cooperation, our clients can see where we earn.
– Which bank’s products are the most demanded in retail?
– One of the most popular products today are cash loans for renovation, purchase of home appliances and other needs. Consumer lending in points of sale also remains in demand. Loan for purchase of cars is another interesting niche where Credit Agricole stays No 1 in Ukrainian market. Over 12 years of work in this area, we built good relations with importers and dealers and now we can offer interesting lending programs and fast decision making process to our customers.
– How do you plan to attract new customers?
– Mainly thanks to investments in digitalization of the bank, improvement of processes and remote services. We know which areas have room for development and we are focused on upgrading of our mobile application and updating of client-bank system. Our strength is in ongoing development but we do not promise our clients that changes will happen instantly. Innovations will be implemented gradually in full correspondence with the bank’s concept: “100% digital and 100% human”.
– What is the idea of this concept?
– It arose in Credit Agricole Group about three years ago on the background of some experts’ opinions that banking sector would soon face serious changes since customers do not want to visit branches and talk to client managers, and are ready to fully switch to digital channels. Having stated that our bank is “100% digital and 100% human”, we expressed our vision of the future. It is human nature that when everything works smoothly, “digital” is more than enough. But as soon as any issue or question arises, customers want to get expert advice instead of communicating with a chat-bot. The customer needs emotional reaction that can be only provided by a human. Moreover, there is a number of banking products such as investments, complex insurance, mortgages, car loans that can be properly sold only by a professional.
– How do you implement this concept?
– We implement it, first and foremost, in our new model branches opened in Kyiv, Dnipro, Kharkiv Odesa and Lviv. On the basis of a special research of customer needs and expectations, we developed a new approach to servicing thanks to peculiarities of internal zoning and space organization in the branches, as well as to innovations related to both the proposed services and organization of the work process. Right at the entrance the clients find themselves in a fully equipped self-service zone where they can withdraw cash, replenish accounts and deposits, repay loans, make transfers between accounts, change PIN-code and many other things in 24/7 mode. At the same time, employees of the bank are ready to help customers. In case there is a need to get advice, a separate zone or one of confidential negotiation rooms are available. All employees of the outlet are universal specialists that can provide consultancy on all products and services. There are also coffee zones with comfortable armchairs. In other words, each outlet designed in the manner that makes customer’s interaction with the bank as comfortable as possible. The new model branch concept demonstrated positive results and good feedback of customers and therefore, by the end of 2022 we intend to transform 40% of the retail network.
– How does new digital strategy of the bank work in practice? What is the mechanism of decision making on launch of new digital services?
– Indeed, we have a detailed digital strategy. It is evolving according to the wishes of our clients, development of new technologies and banking market as such. These are key factors for decision making on launching new digital projects. In practice, the process looks as follows. First, we analyze the novelty in terms of its uniqueness and potential competitive advantages it may give to the bank. Then we define its potential in terms of our customers and assess new opportunities they may get. And finally, we weight gains, level of potential risks and the amount of required investments. We always check whether similar solutions exist in Credit Agricole Group as it operates globally and has a lot of flexibility to adapt to the latest needs of markets. If the proposal is exclusive and requires strategic investments, the decision on its development and implementation is made by the special unit of the Group in Paris. Decisions are never made instantly, they are always weighted and well-thought and, respectively, they are eventually implemented in full.
– Your bank acts as an exclusive financial sponsor of the international technology conference IT Arena that brings together experts, startup, developers and anyone interested in the newest technologies. What is the relation between Credit Agricole and IT?
– We understand that IT sector is true generator of innovative solutions and technology products. We are witnesses of how the result of IT-activities change the world and create the future: more convenient, technological and user-friendly. We want to facilitate creation of innovations and to be a strategic partner to IT-business and leading IT-companies are already customers of our bank. At the same time, we are pleased that not only large IT-companies but also startups actively develop in Ukraine, and we want to be a part of the growing startup ecosystem. Sponsorship of IT Arena conference is the possibility to maintain development of innovations as the most relevant IT-trends will be presented on this platform. Moreover, our bank will be represented in the final jury of Startup Competition that will be held as part of the conference. One of the winners will get a special prize from Credit Agricole: a mentor session in the startup incubator chain Le Village by CA.
– What is the percentage of sales made via digital channels and what are the top products?
– First of all, cash loans for which clients apply on the website of the bank where they can easily calculate the amount of monthly payment. Having processed the application within a short time, the bank notifies of its decision. The loan is disbursed in an outlet. Any bank card can be ordered via online channels. But as for identification and verification, physical presence of a customer in the bank is still required by law. But it is no longer required for current clients for placing an online deposit via mobile application, connection of GSM banking, ordering any bank certificates and documents. Generally speaking, the share of digital sales in the bank is about 7-8% but it will grow with introduction of electronic identification system in the country.
– What is the vector of the bank’s development in the nearest future?
– We divided all new projects into two parts: those that can be implemented by agile method and those for which agile methods are not applicable for technological or operational reasons. Currently we are trying to actively stimulate the first part, and we see the first results. For example, we connected Apple Pay service much faster than we used to connect Google Pay. We made a conclusion that the more agile projects are at the implementation stage, the more motivated the staff is. And this is true not only for digital technologies but also for general modernization of the bank, introduction of innovative thinking and creative approach to work.
This is why we see the future of our bank in the balanced development of Digital and Human. To make the digital component meeting all expectations of customers, people – all specialists of the bank from IT and marketing specialists to call center operators – shall work on it. Thus, we let our customers to choose the way of interaction with us: via innovative digital tools and services or by communicating with our experts. Credit Agricole is a modern high-tech bank with a human face.
Interviewed by Natalia Kirianova