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“For us, the question is not where customers are greater, but where is more convenient for them.”
Georgy Gorshkov, First Deputy Chairman of the Board of Mail Bank, on the development of business in the Far East
The Far East is a region with special economic and geographical conditions that affect any business operating here, including banking. Due to the partnership with the Post of Russia, which makes it possible to penetrate where no other bank can reach, Pochta Bank sets itself the task of creating the largest banking network in the macroregion. Georgy Gorshkov, First Deputy President-Chairman of the Management Board of Pochta Bank, on the role of modern technologies in the development of banking in the Far East.
DOUBLE ON PLAN
- In our last meeting, you said that Pochta Bank plans to double its branch network in the Far East. Happened?
- Of course, this task is completed. In the whole country, the network grew by more than 30%. The number of our points of presence in Russia has reached 18 thousands, and these are, of course, as close as possible to the customers in the post offices. It turns out that we work in almost every second post office. In the Far East, new points have also appeared, the management team has been strengthened, the infrastructure for issuing and receiving cash has been created, even in small towns and villages.
- How to withdraw cash? In your ATMs?
- Almost in all post offices in the country we have installed POS-terminals - the same are used in stores for receiving payments by bank cards. Where they are, the client, having a card of any payment system, be it “World”, Visa or Mastercard, can insert it or attach it to the terminal, enter the PIN-code and get cash from the cash office mail. Also with the help of terminals you can pay for postal services and goods.
- No commission?
- Commission question is a question for the card issuer. For Mail Bank and VTB clients, there is no commission when withdrawing own funds, and if this is money that is withdrawn against the credit limit, it may be charged. Commissions of other banks are determined by individual rates.
- Returning to the Far East, what are your plans for developing the network on 2019?
- We are announcing them soon. True, this will not be such a significant increase: we have already entered most of the settlements.
- Nevertheless, in the Far East there remain “problem points” in the sense of banking presence. As a rule, these are small settlements, where sometimes there is no connection. Can something be done with this?
- Now we are implementing a pilot project with the Central Bank of the Russian Federation to increase the availability of financial services in the Far East. We are creating the largest banking network in the region and, at the request of the Central Bank, we enter small towns. So far, the project involves 10 post offices in small villages with a population of 700 people, including in Bezverkhovo, Korsakovka, Surazhevka and others.
Most of them were not provided with Internet. Therefore, another project partner, Rostelecom, built high-speed Internet to these villages, and we opened bank windows there.
- What kind of task do you decide for yourself as a bank by participating in a project?
- Under an agreement with the Central Bank, we will check whether there is a demand for basic financial services in these small settlements: opening an account, a deposit, receiving wages, pensions or social payments to a savings account. If there is demand, it means that we will expand this project - both in the Far East and in the whole country.
- How do you define the boundary between “there is demand” and “there is no demand”?
- In the central part of the country and in Siberia, we are present in the settlements where 100 residents live, 260. We are the only bank there. If there are pensioners living in this territory who receive regular income, pay utility bills, or have at least one microenterprise, we are interested in the presence. Our investments are limited to installing a POS terminal there and paying remuneration to mail employees who are our agents - they have been trained and can provide basic financial services.
- But is there also a question of the economic expediency of such investments?
“Within the framework of a pilot project in the Far East, we are looking not so much at economic feasibility as at the tasks of Post Bank as a bank with a social function. We with Rostelecom ensure technical accessibility, and on the bank side, as I said, we determine demand.
- However, it still remains a business?
- It’s probably easier for us to participate in such projects, because our products are socially oriented. As you know, since this year, for example, for salary and pension clients, housing and utility services are paid without a fee, the savings account is opened for free, moreover, the bank charges interest on the balance. Such products are easy to manage, absolutely not burdensome financially, and, moreover, almost every client can find a way to get the benefit.
- Will the groups of clients eligible for services without commissions expand?
- This is a question of the market. If a person “from the street” enters any bank, not his client, and wants to pay some bill in cash through the cashier, the bank will take a commission from him. This is due to the cost of the operation - the time the employee or ATM works with cash, the cost of sending a message via communication channels. Moreover, the bank cannot determine the payment behavior of such a client: will it use the services of this bank for a long time or is it a one-time operation. Salary clients or retired clients have regular income and demand for utility bills, and they can set up a template for paying utility bills in the bank’s mobile application. Thus, bank costs are minimized, and the service becomes free.
PRESENCE FORMAT - QUESTION OF COMFORT
- Now the bank is holding a “pilot” with Pyaterochka - you open 50 outlets in stores where people go more often than to mail. Are there prospects for such cooperation with retailers in the Far East?
- You know, we have a choice of a place of contact with a client tied to the wishes of the client. You can become a Mail Bank client simply by downloading our application on a smartphone or tablet and releasing a virtual card. It can be used without coming to the bank in principle. Our second format is post offices. But we are ready to expand the formats - both to retail chains and multifunctional centers (MFC) for obtaining public services. In the latter, we already have more than 100 representative offices across the country, and by the end of 2019, there will be about 300. Thus, the question for us is not where customers are greater, but where it is more convenient for them to receive banking services. Of course, when we think about everyday services, such as utility payments, money transfers, this is digital space, so we invest a lot in the development of our mobile application.
- And in the development of biometrics, allowing remote identification in the Internet bank?
- We use biometrics in our business processes and in the customer service system from 2015: we could make a digital impression of the customer’s face before connecting to the Unified biometric system. The latter involves the collection of a biometric template that includes a face cast plus a digital voice cast. To date, the share of customers who are identified through our internal biometric system, we are approaching 100%. Now Mail Bank is one of the main suppliers of biometric templates to the Unified biometric system. Based on this pattern, as you know, the client can then work with any bank that supports the technology, without going to the branch in principle.
- And how many such advanced customers are in absolute values?
- It is too early to sum up any results, but the flow of customers who want to pass such a pattern is constant. As with any technological innovation, the demand for this service will certainly increase.
WITH FAR EASTERN PERSPECTIVE
- What has shown your joint project with the Far East Development Fund to provide loans to recipients of the “Far Eastern hectare”? Is there increasing demand?
- FRDV gave us a loan for the implementation of the program in the amount of 3 billion rubles. We wanted to test the provision of preferential loan products to citizens who want to actively develop their “Far Eastern hectare”. They did not see much demand, so the FRDV loan was returned. But at the same time we agreed that we will continue to provide loans at attractive expense terms, including those who want to develop the “Far Eastern hectare” at the expense of our own portfolio. We have retained the technology of the market, where the consumer can choose products that are suitable for the development of "Far Eastern hectare." That is, the program continues, but already on the balance sheet of the bank.
- How do you see Mail Bank by 2020 year?
- You know, it is difficult to dream after the Post Bank by the results of 2018 of the year was chosen as the “Bank of the Year”. Of course, I would be happy if Mail Bank becomes the “Bank of the Universe”. But we will work to keep the title already won.