The FINANCIAL -- Interview with Thea Lortkipanidze, CEO of Terabank
Q. What have been some of the main challenges recently for Terabank?
A. The modern trends of the banking sector are mainly related to digitalization and the introduction of new technologies. Naturally, these trends are key in our business too. However while developing remote channels and services it is crucial to maintain and improve the Terabank’s competitive advantages. For example direct communication, personalized approach and solutions customized to business needs.
Q. 2017 was successful in terms of Terabank’s financial indicators. What was it that provided for this success?
A. The Bank’s strategy was fundamentally renewed 3 years ago: reorganization was done; rebranding has been accomplished; we changed the name and offered branches with fully redesigned concept to the customers.
2017 was the first year we were able to clearly and tangibly see the results of these changes. I’m glad that the chosen strategy is successful, but we feel that this is only the beginning, the beginning of a bigger success
Q. What results are you expecting to have at the end of 2018?
A. At present, the economic environment and conditions are favorable for business activities in Georgia. The business sector is showing the positive growth dynamics. In addition, very important factor is that various government initiatives are being implemented to support growth of SMEs. SME business is a strategic segments for Terabank. We had a 50% increase in credit portfolio of this segment in 2017. Consequently, we believe that a good economic environment and emphasis on the development of the SME sector by the state will enable us to increase this rate.
Q. What are the major problems in financing small and medium businesses?
A. Today, one of the major problems is the lack of transparency in business, but I think that government’s decision to reduce taxes for small enterprises will have a high positive impact in this regard. Additionally equity financing program, initiated by government, will give SMEs easier access to business financing.
Q. How do you support small and medium businesses?
A. It is very important for us not to be the institution which limits its relationship with customers only with lending. We are their supporters and partners. We help them to solve financial, as well as non-financial problems. We continuously provide different types of consultations.
We are a responsible bank, we study the needs of customers and offer only the best products that are tailored to them.
Q. How reasonable was the concept of the new branches – a cosy atmosphere, with a home-like feel to the branch?
A. The concept of “my financial home” can be said to have surpassed expectations. We believe that it has played a big role in the last year’s success.
The concept has very good feedback from clients. People who visit branches constantly state that this is a different environment, and one in which bank operations are actually pleasant.
Q. Why did you change your target segment to small and medium business?
A. Several factors led to the decision: First of all, it is the potential of small and medium businesses. We believe that this potential can lead to great success. Besides that, this segment plays a significant role in country’s economic development and we as a bank want to link our success to the growth of SME business, to support it and to contribute to the development of the country’s economy.
Q. How do you ensure customer satisfaction?
A. We conduct mystery research, client surveys and competitive analysis in order to measure customer satisfaction. Customer feedback, their complaints, proposals and wishes are discussed at the top management level. This is part of the Terabank strategy – we listen to customers and make appropriate amendments to our work.
And of course, the best measure is increased number of customers and successful financial results that we had last year.
Q. Are you considering removing cash from circulation?
A. It is too early to talk about it today, but the state and banks have made a lot of important and encouraging steps in this regard. I think that with time this effort will further reduce the widespread use of cash.
Q. How do you see the future of Terabank? Is a change planned among its partners?
A. The founders of Terabank have big and long-term plans in Georgia. These plans are, above all, linked to the dynamic development of Terabank as a bank of the future.
Q. What are the main novelties from Terabank in the Georgian banking market?
A. We have offered customers very interesting novelties this year. Over the last two months differentiating products were introduced for the loans and deposits segment – a tourist mortgage and convertible deposit. Besides the fact that both of them are unique for the Georgian banking market, they completely fit the needs of consumers and fully respond to trends and demands on the market.
A new profitable business has emerged in Georgia lately: In parallel of development of touristic zones, people are buying properties and renting them afterwards to tourists. It is quite profitable investment, however not everybody has enough money to buy or renovate an apartment. Our product - Tourist mortgage - created additional opportunities for financing. This product is issued with simplified conditions, which means that during the approval process Terabank considers the future potential income received from rentals. Therefore, customers will have the opportunity to earn additional income and pay their loan paybacks with it.
As for the second product, a convertible deposit, Currency exchange rate fluctuations is an important issue. Therefore, considering current conditions we decided to offer the depositors favorable product - convertible deposit. This is a product with high interest rate and it protects customers from currency exchange rate fluctuations by enabling customers to convert deposited amount to desired currency at any time throughout the deposit term, and therefore deposit funds with more confidence and feel more protected.
Q. What changes are expected in the next 5 years in terms of electronic payments?
A. This is the most dynamic area, because technology develops itself very fast. Traditionally the banking sector is one of the most active users of modern technologies. Therefore banks will continue to offer innovations in terms of electronic payments.
Q. How do you see the future of the Bank in terms of developed internet technologies and online payments, as well as electronic wallets?
A. First of all, Bank of the future is a bank oriented on customers, their interests and needs; a bank which highly grants customers’ wishes and aspirations.
On the one hand bank of the future offers internet and mobile banking together with the advanced technological products and services to those for whom saving time and use of remote channels and services is comfortable. For those who value more human relationship, traditional banking services are maintained, however the barriers are minimized.