The FINANCIAL - “Digitalization is the future of banks"

“Digitalization is the future of banks"

“Digitalization is the future of banks"

The FINANCIAL -- Interview with Natia Tkhilashvili, Director of ProCredit Bank Georgia

In her interview, Natia Tkhilaishvili, Director of ProCredit Bank Georgia, described the Bank’s main achievements and challenges in 2017. The year was a veritable turning point for them, as a new strategy was offered to private individual clients. Considering how ProCredit Bank is known to be a bank for small and medium businesses, this was quite a novelty for the banking sector.

Natia Tkhilashvili: “Due to the fact that the Georgian banking sector is very well developed, we decided to offer our private individuals a form of banking which is completely modern from the market – that is, Direct Banking. It means that the client can carry out all of the transactions and banking operations themselves, independently of bank branches.”

Q. What have been the main achievements for ProCredit Bank so far in 2018?

A. I would say that we are continuing with the implementation of our strategy in 2018 and our main achievement will still be direct banking. First, what was needed was to make a simple product for customers. We started implementation of the strategy and within the sphere of direct banking we started to offer our customers combined packages and products, with competitive prices compared to the market.

Q. What are the main trends of SME financing at ProCredit Bank?

A. As we are a bank for small and medium enterprises, we are constantly reviewing our conditions and our products that are on offer to them. Together with ProCredit Bank Germany we are co-financing our target businesses 50/50 and the product we offer the market is, I would say, exclusive. German Bank is providing funding for our clients the same as we do, and if we combine these two interest rates, we will receive much lower interest rates than those that are currently available.

Q. How successful are the results of ProCredit Bank Georgia’s operations compared to other group members?

A. Actually, ProCredit bank Georgia is mainly present in the Eastern European market and the majority of the banks are profitable. I would say that we are taking quite a solid part of that profitability.

Q. What are the main problems associated with SME funding?

A. There are no big problems. The Georgian banking market is very well developed and we are in line with the requirements. We are still trying to attract those businesses which are in line with the legislation and are doing their businesses in a transparent way. I would say that one issue (but not necessarily ‘problem’) that we sometimes face is when businesses don’t pay a great deal of attention to environmental conditions. However, this happens to be one of our main standards, so we would like in future to have more organizations that really care about environmental topics.

Q. What are the main challenges that ProCredit Bank is facing at present?

A. Again I would go with digitalization. Many people still like to visit a branch in person, and have face-to-face negotiations with banking staff. Therefore we would like to increase their awareness and knowledge of digital banking services, which is know-how on the market. This is the first challenge we would like to support– to motivate customers to use digital channels.

Q. What has ProCredit Bank done towards improving the financial literacy of Georgian customers? How are they adapting to the novelties?

A. I think that we have done a lot in terms of understanding the clients’ needs and also explaining our products and ensuring the security of the channels. The second thing that we would like to have and to motivate regarding financial literacy is a culture of savings. Such a culture is still decidedly foreign for the Georgian market, therefore we would like to increase people’s awareness about savings. This is the main idea of banking, to somehow motivate clients to save more, and thereby to plan their future.

The first time we started to explain and offer innovative services, quite a large number of customers were happy with it, because of the ease of such banking procedures. But there was also a second group of clients, who are somehow not adapted to such channels but we did and are still doing quite a lot, with our employees, to recommend this group how to use different services.

Q. It seems like the development of internet technologies and the accessibility of the internet in Georgia’s regions has rendered physical banking service centres a bit useless. However, demand for ATM machines is rising, therefore what is the current situation of ProCredit Bank Georgia’s ATMs?

A. This is another approach that we would like to offer customers. First, that through our efforts we will manage somehow to increase the amount of transactions in POS terminals. And second, what we have also decided to offer to clients, is withdrawal from ATMs, meaning that for our customer each and every ATM is ‘theirs’ essentially. So they can take their card and withdraw from different ATMs and should have very few fixed amounts to pay for this.

Q. How do you ensure that your clients all receive the best service?

A. We are always working on our quality. There might be some complaints especially to do with strategic changes, but we take them all on board and discuss them. We have complaints, which is natural, but we must always take each and every complaint into consideration and think about whether there really is something that we need to change or whether there could be something we should be explaining to customers additionally.

Q. A few years ago, online banking was considered the future of banking. But today, that milestone has already passed. So what do you consider the future of banking now?

A. Again – online banking. Digitalization is the future of banks. This is definitely the future of the Georgian banking sector. We have to somehow ensure clients that it is safe, fast and convenient. This is the main message from our side.