The Ukrainian division of German-based international banking group ProCredit Bank is taking the concept of retail banking to a new level with the launch of innovative Service Points in a number of Kyiv’s biggest shopping malls. This initiative was developed during 2020, with the first Service Points unveiled in the Ukrainian capital during the early months of 2021.
Each Service Point offers a range of banking options including payment and cash withdrawal facilities along with pickup points for banking cards. Unlike traditional bank branches, they are not staffed, but offer the opportunity for existing and potential customers to sit down and engage with client advisors in real time via video link.
The Service Point format was developed specifically for the Ukrainian market. Viktor Ponomarenko, the General Manager of ProCredit Bank in Ukraine, sees the new Service Points as the face of the bank in the digital age. He explains that the goal of the initiative is to support ProCredit Bank’s growing emphasis on digital banking services while also maintaining a physical presence and creating efficient points of contact with the public, including both current clients and those who might be interested in learning more about what the bank has to offer.
“Our customers do not really depend on bank branches as they can do virtually everything online,” says Ponomarenko. “But of course, there are still instances where customers rely on a physical presence from their bank. This includes things like cash withdrawals and cash payments. And ultimately, people still need to see that the bank exists. They need to see our brand. These new Service Points provide clients with convenient access to our digital services and transmit the image of our bank.”
The choice of location was determined following brainstorming sessions and research by bank executives in Kyiv. “We felt that the traditional high street branch model was no longer the right answer to the need for a continued physical presence. At the same time, we wanted to be more accessible to customers and potential clients,” offers Ponomarenko. “We are now confident that big shopping malls are the best solution to this challenge. These are places that large numbers of people regularly visit with a view to accessing convenient services.”
The recent launch of ProCredit Bank’s first Service Points is part of a long-term shift towards digital services that has been underway for a number of years. This transition was further boosted by the new market realities of the COVID crisis, which has driven sharp growth in all forms of digitization throughout the Ukrainian economy.
Ponomarenko says that despite the many challenges facing all businesses in Ukraine last year, ProCredit Bank enjoyed an encouraging twelve months. The bank’s loan portfolio to businesses grew, as did customer deposits and overall client numbers. “While the world continues to face pandemic-related problems, from the business development standpoint, we were quite successful in 2020. We continued to develop and grow in all the business areas where we focus.”
This development has included the introduction of new digital offers and services aimed at personal banking clients. “The COVID crisis has accelerated the digitization process but we are still moving in broadly the same direction we have been pursuing for a number of years,” offers Ponomarenko.
The most striking aspect of ProCredit Bank’s expanding service portfolio for private individuals is the bank’s entry into the personal loans market, with the launch in late 2020 of mortgage services along with auto loans and general investment loans. Ponomarenko says this development reflects the changing market conditions and points to unfavorable prior circumstances including high interest rates and economic instability. The situation is now more favorable, he notes.
Ponomarenko is scathing of what he terms as the impenetrable terms and conditions that can often lead to hidden costs for banking clients when taking out loans. He vows to build up ProCredit Bank’s personal loan service portfolio in Ukraine based on the core value of transparency. “This is our competitive advantage,” he comments. “Typically, banks cheat their clients by manipulating them in terms of things like hidden costs and changing interest rates. We prefer transparency. This is the same principle that we have applied to our private bank accounts, which come with clear and easily identified monthly fees.”
ProCredit Bank’s new Service Points will help to promote the bank’s entry into the personal loan segment along with other digital offers. “It’s not enough to offer great service. People also need to see this. That’s why we cannot give up completely on a physical presence. Instead, we want to offer a more sophisticated solution that suits the Ukrainian market,” say Ponomarenko. “This is why we are developing a Service Point presence to complement our digital business model. We already offer efficient digital banking services. The Service Points complement these services.”
About the interviewee: Viktor Ponomarenko is the General Manager of ProCredit Bank in Ukraine (Photo by Natalya Kravchuk)