ForteBank Joint Stock Company, headquartered in Astana, Kazakhstan, was established in 2015 as a result of the merger of Alliance Bank, Temirbank and ForteBank Joint Stock Company (prior to 2015, it was known as Alliance Bank JSC). Serving both retail and commercial customers, the bank is represented in all regions and cities of the country by 19 branches and more than 100 outlets, as well as an extensive terminal and acquiring network with more than 850 automated teller machines and about 9,000 point-of-sale terminals in trade and service enterprises. It is also committed to expanding its reach through continuous development of mobile and internet solutions. The bank employs more than 3,500 professionals. ForteBank is a commercial second-tier bank and among the top five largest banks in Kazakhstan, a country known as Central Asia’s economic growth engine, accounting for more than half of the region’s gross domestic product. ForteBank’s profits are dramatically up, a result of the bank exploiting technological innovation to satisfy the needs of its expanding customer base through a variety of increasingly efficient channels.
We are pleased to have with us today Mr. Guram Andronikashvili, chief executive officer of ForteBank.
Mr. Andronikashvili, welcome….
In 2018, ForteBank significantly increased its net profit. If I’m not mistaken, the net profit for the six months ended June 30, 2018, was 80 percent higher than for the same period in 2017. What factors allowed you to achieve such brilliant results last year?
If we compare the preliminary results of the year, we are 45 to 50 percent higher than we were the previous year. There are two components—active work to attract new customers, both in the retail business and in SME (small and medium-sized enterprise). At the same time, the high quality of service and turbulence in the banking market has encouraged customers to contact our bank. This gives us a significant increase in commission income and free liquidity. In addition, we have restarted retail lending, focusing on unsecured lending; we also continue to develop the ForteX online currency platform and have significantly increased revenues from non-cash conversion of corporate customers.
How would you describe the banking industry in Kazakhstan? Can you say that there are too many banks, and/or do you think the sector is too competitive?
The market is highly competitive, and almost all market players are universal banks. We expect that there will be a subsequent reduction in the number of players in the market. Large banks and niche players will survive, i.e., those banks that specialize in a particular customer group or product.
Some of the key goals of the retail-banking segment, in accordance with the recent investor presentation, include:
- Transfer all standard products, including lending, from outlets to remote channels,
- Keep the branch network, but proceed from product policy to the quality of customer service,
- Develop omnichannel.
Have any or all of these goals been achieved? If not, what is the current situation toward moving in those directions?
We have achieved a lot, and we continue to develop in these directions.
- Regarding the transfer of products to remote channels, all standard products such as opening accounts, deposits, cards, making transfers and payments are now available in our mobile application. At the end of 2018, we launched online lending for our customers, and now it is enough to apply from the mobile application in a few clicks, and the loan or a credit card will be delivered to the specified address.
- If we talk about the transformation of the product approach to the service one, first of all, we have restructured our processes so that now customers visit our outlets less. We transfer customers to online service as well as rearrange the processes so that the customer can get all of the necessary banking products with home delivery, with no wasting time re-visiting the bank outlets. In terms of ergonomics of our outlets, we have created new, modern self-service areas, wherein we are additionally creating a new video-banking service. Also, we are moving away from paper applications; we already have all applications from customers accepted in electronic form, and we have completely moved away from paper PIN codes for cards. A significant part of the operations has been transferred to self-service devices. In addition, modern tools have been introduced to manage the quality of service in the outlets, so that we can withstand the growing demands. And all of this allows us to make the service fast, comfortable and convenient.
- As to the development of the service through the prism of omnichannel, most of our products are now presented in many channels. For example, now you can apply for a loan or a credit card in several ways: at the outlet, through the mobile application, website, ATM and also our partners.
What have been ForteBank’s main ways of transformation into a digital bank?
The basis of the digital bank is the ability to collect, store and process data. For this end, the bank, together with one of the world’s technology companies, is implementing a project to create an infrastructure for working with data. The purpose of the project is to make the data an asset of the bank—that is, to make it available for analysis at any time in accordance with the role of the employee. This should reduce the search and processing time by 50 to 70 percent of the current level. This will also improve the quality and accuracy of analytical reviews and, as a result, increase the speed and quality of resolutions adopted at the bank.
We also understand how important it is for our customers to have convenience and availability of banking services anywhere and at any time, so one of the main directions is the development of the mobile application that allows you to get service on all of the standard products of the bank. We also strive to ensure that our outlets provide a full range of services without the physical presence of our team in the outlet.
Can you give examples to demonstrate that ForteBank is one of the most innovative banks in Kazakhstan?
ForteBank is committed to creating the best innovative services for customers. We have developed an application that can be used by customers of any bank, and we became the first bank to introduce augmented-reality technology into its applications. This past year, our customers made twice as many payments and three times as many transfers in the mobile application compared to the previous year, and the number of installed applications of the bank exceeded 1,000,000.
“Talk in” has been added to the bank’s mobile app—it is a virtual assistant that will answer questions related to banking products. Also, users can communicate with their relatives and friends in the application even with zero balance and no internet traffic, regardless of whether they are in Kazakhstan or abroad. The “cash by code” service allows you to withdraw money from an ATM without the physical presence of the card, if the customer or the recipient of the money happens to not have the card at hand.
Recently, we presented our ForteMarket marketplace, an online platform that presents the products and services of our partners.
Are you currently satisfied with the range of products offered by ForteBank to retail and business customers? If there is any product or offer you would like to see in the future at ForteBank that is not currently provided, what would it be?
In terms of providing banking products, we have achieved significant success and are proud of what we have already been able to do for our customers, but we are not going to stop there and want to do even more. We understand that the needs of our customers do not end with financial services, and it is necessary to develop an affiliate network and be available online.
Now we have about 3,000 partners from whom our customers can purchase goods and services in installments or participate in the bonus program. We understand that it is important for customers to have more ways to make purchases online—for example, you can pay immediately or purchase goods in installments or on credit. But we must move forward, and in the future we see the creation of a digital ecosystem that will cover all of the needs of our customers’ lives.
ForteBank certainly has a rewarding future ahead of it. Thank you very much for talking with us today.