By Alexander Jones – firstname.lastname@example.org
Türk Ekonomi Bankası (TEB) is a privately-owned bank in Turkey with deep roots in the region, having been in business for 87 years. A major milestone in TEB’s history was passed when the bank became a strategic partner with BNP Paribas of France in 2005. This partnership played a significant role in TEB’s subsequent ventures into the retail-banking and SME-banking businesses. Until then, TEB had a unique position in the Turkish banking industry through its focus on corporate and commercial banking and by virtue of its having been the first to introduce the concept of private banking in Turkey.
When it launched SME banking in 2005 for small and medium enterprises, TEB set out with the goal of becoming one of the three names that would first come to mind for SME banking in Turkey. Today it is indeed one of three banks in the world that have been identified as models for SME banking in non-financial services by the International Finance Corporation (IFC), a member of the World Bank Group.
Banks were once the institutions that addressed only the financing needs of SMEs, but today they have turned into institutions with which SMEs can “make” business. As this paradigm has changed, TEB has taken action in a pioneering way in the transformation of classical bank-to-SME relations. When TEB began SME-banking operations nine years ago, initially it identified what it could do differently, and what it could do to distinguish itself, and then it analyzed the SMEs.
In its analysis of SME banking, TEB discovered that 80 percent of SMEs failed even to conserve, much less build upon, their assets during their first five years of life, and moreover, that the chief reasons for this failure were their inability to gain access to the information they needed and the consequent difficulties they had making long-term plans. The research showed that financial support alone is not sufficient for SMEs; they need know-how, training and consultancy services in order to expand their businesses.
In this context, TEB reaches SMEs from every channel with its “SME consultant bank” approach, providing information that will make them stronger in competition, free of charge. TEB SME TV, a web-based TV channel with 4.5 million viewers; TEB SME Academy, which travels from city to city and so far has been attended by 22,000 business people; and the 500 TEB SME consultants (bank employees who have been trained in-house to be specialists in this business line) are just a few of the outstanding and innovative projects that TEB has undertaken in SME banking. TEB seeks to provide any and all manner of knowledge and support that will boost the competitive abilities of SMEs and help them grow stronger.
Two years ago, TEB launched Turkey’s most comprehensive startup-business banking venture under its SME-banking service, and while doing so it brought its consultant bank approach to this business line as well. All of the financial and non-financial products and services offered by TEB were completely rethought and redesigned to address the specific needs of entrepreneurs.
When making lending decisions, for example, TEB assesses the potential inherent in a business idea in order to help lessen the burden of collateral. To date, TEB has extended credit lines amounting to TRL $450 million in aggregate to entrepreneurs, nearly 60 percent of which are unsecured.
Through such sectorally innovative practices, TEB goes far beyond what might be expected of it just as a bank. At the TEB Startup House in Istanbul, which is part of its TEB Startup Business Banking program, entrepreneurs have access to an A-to-Z panoply of training, consultancy and support completely free of charge. Every week, participants at TEB Startup House are provided with no-charge training on a host of crucial issues ranging from how to set up a business venture to how to make it a viable concern, and from effective marketing to effectual contract-writing. Although it is based in Istanbul, TEB Startup House reaches out to entrepreneurs in other parts of the country with the support and collaboration of NGOs (non-governmental organizations) and professional institutions. Entrepreneurs are also provided with training at the various techno-cities (technology parks) with which TEB Startup House collaborates. Every entrepreneur coming to TEB Startup House has access to individualized support from a consultant on all matters essential to transforming ideas into viable businesses.
Located within TEB Startup House, TEB Incubation Center provides physical working environments and necessary office equipment for entrepreneurs. Approximately a thousand new business ideas have been brought to TEB Incubation Center so far, of which 41 have been approved and given access to the center’s resources. TEB is now preparing to open other startup houses: one, a joint project with Middle East Technical University, will be located in Silicon Valley, California, in the United States; under a project with the Turkish Exporters’ Assembly (TİM), TİM-TEB Startup Houses will also be opened in 10 of Turkey’s cities.
At its outset, the TEB Startup Banking program set itself the goal of reaching 15,000 entrepreneurs every year. During its first year of life, the program surpassed that target by a wide margin, reaching 31,000 entrepreneurs by as early as August.
TEB also makes an effort to help entrepreneurs find financing for their projects by creating environments in which they can link up with potential investors. TEB launched TEB Özel Angel Investment Platform as a first and unique web-based application in the sector, where entrepreneurs and TEB Private Banking customers have a chance to get together. This gives TEB Private Banking customers who may be interested in putting their assets to work in areas outside customary financial tools the opportunity to invest in such ventures, while entrepreneurs are given a chance to find the capital they require for their innovative ideas. TEB Özel Angel Investment Platform, in other words, seeks to benefit both the bank’s private-banking customers and the national economy as a whole.
In retail banking, TEB adheres to a responsible banking approach, in keeping with which the bank seeks to foster a sense of thrift among individuals by increasing their financial literacy. In line with the principle “economics begins at home”, TEB Family Academy was launched in October 2012 with the goal of fostering financial literacy and thriftiness. Having transformed its own branches into classrooms and employees into teachers, TEB began conducting the TEB Family Academy program elsewhere in response to strong demand. TEB now provides financial-literacy training to agencies, associations and other organizations that request it on their own premises. TEB Family Academy provides free information to all, whether they are customers or not, on fundamental finance topics under the main headings of budget management, savings, deposits, proper use of credit and credit cards, and investment assessment. To date, TEB Family Academy has succeeded in reaching about 140,000 people all over Turkey.
In order to help educate future generations on how to budget, spend wisely and save, TEB goes into schools and meets with pupils in classroom settings. The TEB Junior website was set up to teach financial concepts and terminology to children in the 6-12 age group in an engaging and entertaining manner. TEB has so far reached 650,000 children through such efforts. A similar undertaking is TEB Children’s Theater; its mission is to inculcate basic financial knowledge in children through kids-oriented, admission-free theatrical performances.
Having made innovation an essential element of its own corporate culture, TEB launched the TEB Innovation Competition six years ago in order to promote the concept of innovation throughout the country. Each year’s contest is centered on a specific theme. As an outcome of this, TEB became one of the first brands associated in people’s minds with the notion of innovation in Turkey.
In the corporate-banking business, TEB provides major national and international firms, corporate groups and holding companies with finances for foreign-trade, business, investments, commodities, projects as well as cash-and-risk-management and standard-and-derivatives treasury products, among other products and services. TEB has deep-rooted experience in foreign-trade finance, and since 2005 it has been leveraging that experience through the strong and extensive global financial-services network of its partner BNP Paribas. TEB operates TEB Trade Centers located in Istanbul, İzmir, Adana, Ankara and Bursa—the five cities through which about 70 percent of Turkey’s total foreign trade currently flows. These centers are directly linked to the network of more than 100 similar trade centers that BNP Paribas operates around the world.
Every TEB Trade Center is staffed with specialists in structured, trade and commodity finance. Through these teams, TEB comes up with solutions that take into account the particular financing needs of the goods and services being sold as well as their associated cash flows. These are customized finance products that go beyond classical financing methods and are often unique in the sector. Through these trade centers, TEB can address customers’ domestic and international-trade finance needs at every stage from input procurements to collections management. Last year TEB became the first bank in Turkey authorized to extend credit against goods stored in its own licensed warehouse after the finalization of the statutory and regulatory framework governing such facilities in early 2013.
In its capacity as a consultant bank, TEB continues to provide exporters with whatever advice and other support they need beyond financial products and services. And that’s not just in Turkey. TEB’s participation in the BNP Paribas global network of trade centers means that it has a presence in almost every country to which Turkish companies may export. Virtually wherever business is being done—from obscure markets in Asia and Africa to the most specialized markets in the developed world—TEB has the ability to provide companies with the streamlined corporate-banking support that they need.
TEB ensures that the Turkish offices of multinational firms and their multinational personnel employed in Turkey have access to exactly the same products and services that are available in every other country in which BNP Paribas has a presence. When its own customers travel abroad, they have no-charge access to the global ATM network of BNP Paribas. The same applies to BNP Paribas customers coming to Turkey from abroad: they have the benefit of Turkey’s ATM network at no extra cost.
TEB’s main objective is to become the first choice of its customers with its customer-focused approach, capability to take action rapidly in response to changing dynamics and needs, ability to provide innovative products and services, constantly developing technological infrastructure, and highly qualified and specialized human resources. Within this context, TEB’s customer-oriented services and products were deemed worthy of many prestigious awards in the international platform, from Stevie Awards to European Business Awards, from European CSR Awards to Financial World Innovation Awards. TEB also achieved a notable success when it was selected by the International Finance Corporation (IFC) as one of the three banks with the best SME-banking practices in the world. This was the first time that the IFC deemed a Turkish bank to be a model for the whole world.
At the same time, know-how, innovations and technological practices flow back and forth between TEB and BNP Paribas. TEB gathers up many awards for innovation that BNP Paribas hands out every year. Many of the products and services that TEB has developed in-house have been recognized as best practices in the BNP Paribas Group and are used by its members. For instance, TEB’s SME-banking practices such as TEB SME Academy were an inspiration to the BNP Paribas Group banks.
With its innovative financial products and services, TEB has succeeded in being presented as a model both by international platforms and BNP Paribas Group.