French bank in Ukraine plans to maintain personal touch as pandemic boosts industry-wide digitization drive

Credit Agricole reports a boom in digital banking but branch network remains crucial to the bank's future plans in Ukraine

French bank in Ukraine plans to maintain personal touch as pandemic boosts industry-wide digitization drive
About the interviewee: Carlos de Cordoue is the CEO and Chairman of the Management Board at Credit Agricole in Ukraine
Business Ukraine magazine
Wednesday, 23 December 2020 14:06

Few members of the Kyiv expat community have experienced an introduction to the Ukrainian capital quite like French banking sector executive Carlos de Cordoue. He touched down in Kyiv in mid-March to take up his post as the new CEO and Chairman of the Management Board at Credit Agricole, arriving at almost the exact moment the country was introducing an unprecedented lockdown of everyday life. The subsequent coronavirus crisis conditions have made for a novel first year, but Cordoue has managed to settle in Kyiv and has also visited many of his bank’s regional branches throughout Ukraine. He is now upbeat about the prospects for 2021 as thoughts turn towards Ukraine’s post-pandemic recovery.


Coronavirus Challenges

No economy in the world has escaped the negative impact of the coronavirus crisis, but Cordoue says he’s been encouraged by the relatively limited scale of the damage in Ukraine. “We currently expect to see an annual GDP decline of 5% to 6%, which is comparatively good by European standards,” he notes. This is partially down to the makeup of Ukraine’s economy and the prominent role played by lockdown-resistant sectors such as agriculture and IT. Indeed, Cordoue notes that high commodity prices have meant 2020 has actually been a good year for many in the Ukrainian agricultural industry, while the IT sector has also managed to expand despite the economic gloom elsewhere. 

He also identifies the health of the Ukrainian banking system as a key factor behind the country’s ability to avoid the worst of the coronavirus crash. Since Ukraine’s 2014 Revolution of Dignity, the country’s banking industry has undergone an extended period of reform and heightened regulation led by the National Bank of Ukraine, with around half of all banks forced to cease operations. Cordoue says this has helped create solid macroeconomic foundations and left Ukraine far better prepared than during previous crises. “Great work has been done in cleaning up the banking system over the past six years. I think the economy is much stronger and more resilient today than it was back in 2014 or in 2008.”


Distance Working

While today’s Ukrainian economy has proven less vulnerable to the shocks of the global coronavirus pandemic than it might have been in previous years, the unprecedented lockdown measures introduced in the country since spring 2020 have nevertheless tested the ingenuity of the Ukrainian business community. For Cordoue, one of the first major issues to address was an intensive transition during a two-week period in late March and early April that saw 80% of the Credit Agricole team in Ukraine (excluding employees of the bank’s branch network) switching to distance working. While he marvels at the organizational and technological achievement of moving to a home working model relatively seamlessly,

Cordoue also notes the longer-term implications of this dramatic shift in employer-employee relations. “We have managed to make things work, but having so many staff members working from home creates a whole new world of management challenges that we are only just beginning to come to grips with. This will require considerable thought and a lot of training in order to learn how best to work with colleagues who are not necessarily always going to be working alongside you in the office. Ultimately, we will need to establish a different kind of relationship with employees based on a contract of trust.”


Banking on Branches

Cordoue does not see the current levels of home-working as sustainable, but believes the trend towards distance working has now established itself as a viable alternative to office-based work and is here to stay. He anticipates that during the post-pandemic period, the percentage of Credit Agricole staff working from home at any given time will decline to around 20%. In anticipation of this long-term shift, the bank is already looking to reduce overall office space and has established flexible work spaces at its Kyiv headquarters. At the same time, he underlines the importance of regular contact between colleagues and stresses that there remains no substitute for face-to-face interaction.

This faith in the value of individual engagement and the personal touch is also evident in Credit Agricole’s continued commitment to a nationwide network numbering 150 branches. While other banks are moving increasingly towards digital banking, Cordoue remains convinced that Credit Agricole’s branch network is fundamental to the bank’s continued success in Ukraine. Branches continued to operate throughout 2020 with no staffing changes, and there are no plans for any cutbacks in the coming year. “We are seeing a new wave of digital banks appearing in Ukraine and there is a battle for market share, but we believe personal relationships with clients are still very important for the banking industry,” says Cordoue. “Ultimately, banking is all about trust. If you cannot establish relationships built on trust, you will become weaker. At some point, you will lose clients. This is why we maintain our branch network in Ukraine, to stay in close contact with our clientele.”


Digital Upgrade

In parallel to this personal approach, Credit Agricole has also spent 2020 upgrading its digital services. By pure good fortune, the bank was already in the process of developing a major new banking services app when the pandemic first began to unfold in the early months of the year. This next generation digital tool was unveiled in June and has proved a big hit among the bank’s customers, with usage and transaction volumes far outpacing previous levels as more and more clients handle their day-to-day financial affairs via their smartphones. 

Cordoue marvels at the adaptability of the Ukrainian market and praises the progressive attitudes of Ukrainians towards new technologies. He argues that this natural Ukrainian appetite for innovation has been amplified by the necessities of the coronavirus crisis, and believes the shifts in user habits within the banking industry over the past year are here to stay. “Digitization has long been a trend throughout the entire banking industry, but the pandemic has accelerated this process. A lot of people who were not previously inclined to favor digital tools have been forced to use them and have grown much more comfortable with the technologies involved. Now that they are accustomed to the added convenience this offers, there is no going back.”


Post-Pandemic Outlook

Looking ahead, Cordoue expects Ukraine to rebound strongly from the coronavirus crisis during the coming year. He speaks enthusiastically about his encounters with Credit Agricole clients across Ukraine, and notes approvingly that many are young entrepreneurs with a strikingly European mindset and globally competitive products. Cordoue sees the production of value-added goods as a particularly interesting focus for financing within the Ukrainian agricultural sector, where Credit Agricole remains among the market leaders.

Meanwhile, the bank plans to continue the current emphasis on developing its digital services portfolio while maintaining an extensive nationwide network of branches. “We want to offer our clients the most advanced digital options, but at the same time we think a physical presence is crucial for the long-term future of the bank in Ukraine. This is the key to competing.”

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