We made a digital leap that saved us two to three years

50 Leading Ukrainian Banks May 2021

Interview with the CEO of Credit Agricole Bank Carlos de Cordoue within the "50 leading banks of Ukraine" project. 

- Carlos, you arrived in Ukraine last year just before the all-Ukrainian lockdown. If you knew about further developments, would you change your decision to take the lead on a Ukrainian bank?

- Even if I had known everything in advance, I still would not change my mind. The current situation is a global issue. No matter which destination you choose, you will still feel the effects of the corona crisis. Nevertheless, it seems to me that everything in Ukraine went much “smoother” compared to Western Europe. In fact, the lockdown was painful for the first two months – March-April 2020. Then there were another few waves of lockdown, but Ukrainian economy is showing resilience and flexibility to adapt to the situation.

- How do you assess the work of the banking system last year?

- Banks proved to be much stronger during this crisis compared to the previous one: this is the result of the banking system clean up carried out after 2014. I was a member of the Supervisory Board of Credit Agricole Bank in 2012-2016, so I can say that the banking environment has significantly improved. We still have some challenges in front of us but I believe banks have become stronger and much more solid during the past five years. The first wave of pandemic in March-April 2020 had very negative impact on the activities of banks and the economy as a whole, but then everything gradually began to recover faster than expected. The last quarter of the year was quite successful for us – our activity returned to the level of the 4th quarter of 2019.

- What is the main change in the work of banks, in your opinion?

- The most important change is the transformation in customer behaviour. The restrictions that were introduced last year and are still in place have forced Ukrainians to change their habits. This primarily applies to remote service provision. We, as a bank, intensified our efforts related to the development of digital transactions and payments, and last June we launched a new banking application. Now it is one of the TOP three banking applications in the Ukrainian market according to user ratings. Ukraine enjoys a rather high level of digital opportunities; the population is very active in using mobile phones in their everyday life: for making payments, shopping, leisure, ordering and paying for a taxi. That is why Credit Agricole Ukraine invests a lot in digitalization. Our goal is to achieve excellence in our digital services.

- These days more and more banks offer mobile solutions not only for individuals but also for legal entities. Are you planning to develop similar solutions for business customers?

- We started working on a new internet banking solution, which will include mobile application for small businesses and private entrepreneurs. The launch is scheduled for September-October this year. As you probably know, all product development is done in-house. It took one year to complete the work on the mobile application for private individuals. As a result, we will have two applications, but they will be interconnected: customers will be able to switch easily from one to another.

- What else has changed in the bank because of the corona crisis? 

- I believe that the key decision was not to change, but to uphold our policy and support the economy, even in difficult times. We increased our loan portfolio by more than 20% in a year. At the Group level, the decision was taken that all Group entities should help businesses get through the pandemic, move on and continue to grow. During this period, we worked hard on social responsibility: we protected our employees as much as possible, implemented the largest charitable initiative in the history of the bank presence in Ukraine, and supported 10 hospitals. Last year we had the largest budget for charity – 11.2 million UAH. We consider it is our task to provide support to those who need it. The pandemic has accelerated the development of corporate social responsibility in our bank and in the country in general.

- What segments did you focus on in 2020? 

- First of all, it is the Agri/ Agro sector. We strive to be leader in this area, which Credit Agricole Bank began to develop 10 years ago. We invest a lot in the development of agri segment: our project "Agro School" is recognized as the best program for the development of leaders by the HR-Brand Ukraine 2020 Award. There are still very few field-specific specialists with agricultural and financial expertise in Ukraine. So, our project will develop the agro-sphere in general.

We have land reform ahead, and we are already beginning to think about how we will work in this direction. The reform will provide an opportunity to interact more actively with private farms.  

- Will the emphasis be the same in 2021? 

- This year we place additional emphasis on leasing, which was launched last summer. At the moment, this product is intended for corporate and small businesses – we offer leasing of agricultural machinery, as well as cars, vans, light trucks and more.

In the retail business, we will focus on working with the middle class segment, which is growing fast in Ukraine. We will continue to adapt our products offer to the need of these potential clients. Therefore, beside our key product car financing, we will also develop mortgage loans in 2021.

- Last year, the world faced a new reality for which no one was ready. What qualities of leaders, in your opinion, helped to successfully adapt to new conditions?

- We need to be able to compensate somehow for this difficult period. We were quite demanding: all of 150 branches and our on-site specialists continued to work all the time. We had to give people a positive signal.We saved jobs and wages, ensured social protection to everybody. Yet, communication within the bank was mostly online, and it is very important for people to be able to communicate in person. Computers and mobile phone screens are just not enough. When the lockdown was relaxed, live meetings with employees were held at the initiative of the management; we visited regions and talked to people on-site. We have implemented the concept of flexible office in the Bank’s head office – now we are completely rebuilding the premises, organizing an open space, changing the organization of work. According to our plans, about 20% of the head office staff will work from home on a rotating basis.

- Did this idea come up due to lockdown?

- Not at all. The idea of a flexible office had been discussed before the pandemic, but we launched a pilot project in early 2020. The lockdown pushed us to concrete action. To organize such a project, you need to trust the people you work with. Our managers will be free to organize and experiment different solutions

- How to motivate staff to work effectively in such conditions?

- I believe that this is about comprehensive teamwork. Last year we had a special incentives to support people who worked in the branches. Such employees needed to be encouraged. The bank also has a program to support employees who receive the lowest salaries. We met our commitments to the team, which the Group announced since the beginning of the corona crisis: we did not dismiss people, did not cut wages, and enhanced social protection. In addition, we introduced a new program to give more responsibilities to our managers. We also adhere to a transparent communications policy and speak honestly with employees, give them maximum information. By the results of 2020, Credit Agricole Bank entered the TOP-50 best employers according to Forbes.

- When you were going to Ukraine, you probably had certain plans, goals, and objectives. What of these did you manage to achieve, despite the lockdown?

- The slowdown of the Ukrainian economy have of course affected our level of activities in 2020. Nevertheless, I believe Credit Agricole get stronger during this period. We have built a solid liquidity and equity position that will allow us to rebound in parallel with economy. Our main challenge for the future will be to improve the efficiency of the business. To do that, we need to review all our processes and make them simpler and more efficient.

In that perspective, COVID has made a revolution: Ukrainians who have switched to mobile banking are quite unlikely to return to branches to pay their bills or withdraw cash. The lockdown accelerated the transformation of our bank. We made a digital leap that saved us two to three years. This is precisely why our strategy for this year will consists in the development of mobile applications and a mobile-centric approach.

- When, in your opinion, will the world return to the pre-COVID level and will it return at all?

- I do hope that in May-June the lockdown regime will be over and we will return to normal life. For sure, the global economy will quickly recover as soon as people realize the pandemic is stopped. I strongly believe that Ukraine has solid grounds to take full advantage of the economic recovery.