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Nikolay Spasov for Banker.bg: We are focused on providing even more online solutions

How do we combine providing increased security to a bank and innovative solutions inherent to a fintech company? Our Chief Operating Officer – Nikolay Spasov, was invited by Banker.bg to share more on the topic. Read the full interview below:

tbi bank challenges the established banking model. Does this limit the circle of your customers or vice versa?

In recent years, our team has been working on the so-called phygital model – a combination of physical and digital channels through which we serve the daily banking needs of our customers. I believe that through this transformation we have not limited the circle of customers, but on the contrary – we have been able to reach more people by responding to their specific needs. As we have customers who prefer to still visit our offices and consult our experts in person, we are seeing an increase in customers who prefer online channels and use our digital solutions such as the mobile application, online lending platform, etc. . I dare say that our success is due to this flexibility – we are here to provide convenience to our customers regardless of their needs.

To whom are tbi bank’s services actually aimed – the younger or the more innovative?

Our services are aimed at everyone who wants quality, fast and reliable service to their needs – regardless of their age. Of course, our online solutions such as the tbi buy shopping ecosystem naturally attract more interest from younger and active online users, but other solutions such as our Buy Now Pay Later financing solutions are used by all type of customers.

It is noteworthy that you introduce structured digital products. Which one is the most preferred?

The digital products we offer are of different nature and meet different type of needs, I could not compare them and single out one as the most preferred. We are definitely seeing strong interest in Buy Now Pay Later – our product financing solution in equal installments, with no interest or extra fees. The product allows our customers to shop from companies in a variety of industries as the entire application, approval and payment process is completely online and takes minutes. We offer the same solution in Romania, and now also in Greece, as in both countries the number of merchants who have implemented the service, as well as the customers who use it, is increasing at a high rate.

You are one of the few executive directors of banks who openly raised the issue of some metrification (unification) of digital products given their comparability and recognition? Did we understand you correctly?

The topic I touched on was a unified market-wide approach to performing the customer identification process, or better known as Know Your Customer (KYC). At the moment, there is no unified system for a similar type of service to banks in Bulgaria. On the other hand, the regulator in the person of the BNB has clear requirements and periodicity for the implementation of this process. That is why I believe that creating a single system would greatly facilitate both the end users in terms of time they would spend in a bank office or through a digital channel, and the banks themselves – reducing the costs of carrying out this process.

Is it actually possible for this to happen at this stage and what needs to be done to achieve such a goal?

I am of the opinion that a similar type of service can only be provided through the cooperation of the banks together with the regulator, and I consider the implementation possible through the services currently provided by BORICA. Taking into account the technological level of development and the high degree of digitization of financial services in Bulgaria, a similar type of innovative service can be implemented in a relatively acceptable time frame.

Fintech companies and traditional banks – will they complement each other or compete? What is your prediction?

I believe that traditional banks will go through a significant transformation given the tone set by fintech companies – customers expect everything to happen much faster and easier than before. More and more banks will offer digital solutions and go down the path of streamlining established processes in order to meet the needs of their customers and be able to give them what so strongly attracts their interest in fintech. We can hardly talk about competition between the two at the moment, since a banking institution offers a much larger portfolio of services, as well as increased security due to the regulatory requirements that it is obliged to follow strictly. With the introduction of instant payments through the Blink platform, which we first started offering at the end of last year, even everyday transactions to friends, relatives, colleagues or any other user are now completely possible through bank, which will greatly affect interest in fintech companies, which most often attract customers with this feature.

At tbi bank you emphasize the implementation of new technologies and innovations How do you develop new products – through your own team or do you use external contractors?

A large part of the solutions we develop are entirely the work of our in-house team. So is our online merchant onboarding portal, which has reduced registration time by more than 15x and increased our partner satisfaction by over 70%. For others, we work with big international names in the fintech sector such as Onfido, FintechOS, Provenir, etc.

Will traditional banking or mobile solutions be your priority?

For us, the two go hand in hand, and quite often they even overlap. Providing even more services than traditional banking through online channels will be a big focus for us, as well as providing even more efficient processes and convenience for the customer.

It is known that tbi has its divisions in Romania and Greece. Are the products you offer in these markets the same or does each division develop its own products and services tailored to the situation in the respective country?

Our activity in Romania and Greece is tailored to the local market, customer needs and our goals. Our work models in both countries are different – while in Romania, where we have been operating for many years, we offer a rich portfolio of products as well as a wide office network, our approach in Greece is quite different – there our focus is on providing more opportunities to finance goods through “Buy now, pay later”, and in just two months we have already partnered with more than 650 partners who have implemented our solution in their online and offline stores.

You offer alternative payment services such as “Buy now, pay later”. How are they perceived by customers?

As I mentioned earlier, our customers are very interested in the product because it is completely online, without markup, and allows them to buy the product they want immediately and pay for it later. We are also seeing great interest from merchants who are using “Buy Now, Pay Later” as a tool to increase sales and attract new consumer segments. We are glad that the service is developing so quickly in all three markets – Bulgaria, Romania and Greece, and we are constantly working on providing the solution in new verticals to meet more customer needs.

It is noteworthy that after years of unattractive deposit rates, you recently advertised a deposit with 2% interest. Do you need to have good cash flow and good credit to take this step with so much slack in the market?

The year 2022 started extremely successfully for our team as we registered high business results. We ended the first three months of the year with a record net profit of EUR 10.2 million – 40% higher than the same period last year. At the end of the period, we had a strong and well-secured position in relation to capital and liquidity – the capital adequacy ratio reached 21.4%, and the liquidity coverage ratio – 433% (more than 4 times above the regulatory limit). Thanks to these results, we were able to diversify our portfolio of services, including deposit products. The truth is that as one of the most profitable banks in the market, providing efficient savings solutions to our customers has always been a high priority and this year was no exception. In addition to high interest rates, our savings solutions also offer additional flexibility because there is no penalty fee if the depositor needs their funds before maturity and chooses early termination.

It is important for all companies to quickly receive their money under purchase/sales contracts and to have them available. You now pay out these amounts 3 times a day instead of 1 or 2 times as is standard in the market. Did the practice dictate it, or did you decide to help the business speed up its work?

For many merchants (especially small and medium-sized enterprises), the speed and frequency with which they receive funds under their installment purchase contracts is of key importance. Their flexibility and the achievement of their business goals depend on it. It is important to note that before we introduced this service, the market standard was to pay out once a day. For this reason, we decided to provide more convenience and efficiency to our partners by increasing the frequency of payouts to them three times in the current day. In the same way, we work with our partners in Greece, and by the end of the year we plan to make payments 3 times a day in Romania as well.

All bankers claim that the client is the most important. But it is noticeable that the attitude towards the customer in the bank branch is not perfect, there are quite a few discrepancies between the expected and the offered attitude. There seems to be an obvious oversight. What will be the outcome?

The attitude of the teams in the branch network, as well as those in the sales outlets of our partners, is of key importance to us. However, no matter how good a product is, if purely human interaction is unpleasant for the customer, he can easily prefer a competing one or even develop a generally negative image of the given bank. Therefore, the selection of personnel at tbi bank is extremely strict – we welcome professionals who share the same values as us and sincerely believe and understand the importance of their function and customer satisfaction for the overall success of the bank. We also frequently organize in-house training to upgrade the skills of our colleagues, and to ensure an even better customer experience, we collect customer feedback, analyze it and take appropriate action.

What is the leading factor for your bank to develop new products and services – the customer experience or being the first to implement innovations?

It doesn’t matter if you’re first if your product isn’t good. It is important to us that what we offer to customers meets our standards and their expectations and needs, and whether we are first depends to a large extent on the speed of our competitors. In many areas, we have proven ourselves as leaders and were the first to provide relevant solutions to the market, but this has never been at the expense of quality, but rather of efficient internal processes and, of course, the great enthusiasm and dedication of our colleagues.

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