Ildar Abdullin (Ak Bars Bank): Digital services let you do business

Ildar Abdullin, Head of the Transaction Business Department at Ak Bars Bank, told B.O (Bankovskoye Obozrenie magazine) how to improve the Customer Experience when working with companies reliably ensuring their information security in the omnichannel environment.

— What are the main vectors of transactional business development at the bank?

— The bank is undergoing a digital transformation aimed at the growth of a transactional business. The bank optimizes the customer journey by converting traditional products into digital format and expanding the range of online services. At the same time, we maintain a physical network of branches in forty large regions in Russia for customers who prefer service at branches.

We have changed the product creation mechanism by setting up a flexible Scrum product development methodology. Products are developed in two-week sprints, during which the team is continuously creating new functionality or improving the existing functionality of our remote banking platform and internal systems. In October 2019, we are planning to launch a specialized RBS for small business Ak Bars Business Drive. Using this service, entrepreneurs can perform routine operations in a user-friendly interface, easily control accounts, quickly issue payment orders, receive statements, independently manage a corporate card without being tied to an office, and much more.

Competition in terms of finding and retaining customers leads to the strengthening of the transactional business direction and investment of large funds and resources in this area.

The Bank plans to keep investing in remote banking services, develop web and mobile applications, move most of the operations from branches to an online channel thus optimizing the customer journey map, introduce new non-banking services, and focus on selling digital products. For large corporate customers, we are planning further development of cash management products.

— How promising is the development of the RBS for the bank?

— Corporate remote banking service is a priority area of responsibility, and we keep investing in online channels. This is an important part of our general Strategy.

It is believed that the potential of online banking is gradually exhausted. The Client-Bank system appeared relatively long ago, and now I can’t even remember where and when the first transaction was made. Now remote banking services are a must-have.

Banks strive to increase the level of customer experience, and in the digital transformation, remote banking can become a driver in the world of omnichannel. Thus, the growth points of RBS are optimization of application UI and saturating it with modern financial services. Information security is another important element of RBS.

— Speaking of information security, what do you mean first of all?

— A digital bank must learn to create and provide customers with secure digital financial instruments.

The modern environment puts high demands on transaction security, and SMS does not fit these requirements. This security problem can be solved by a digital signature on a user’s mobile device or a cloud-based digital signature. These tools significantly expand the range of customer capabilities in the RBS channel.

This is part of the Customer Experience, while spending on information security is actually an investment, and not an expense.

— How to ensure information security in the omnichannel model?

— Omnichannel is a feature of the IT platform where customers also express their own customer requirements. The bank must ensure the security of operations while maintaining the maximum level of comfort when the customer moves from one channel to another. That is, the customer needs to conveniently issue payment orders in one place, confirm them in another, track the fund transfer in the third one, and receive statements in the fourth one. Security should be high in all channels.

— What information security tools are used in corporate RBS?

— Starting November 2018, bank customers have been using PayControl service developed by SafeTech and integrated into the remote banking system. Through PayControl, while out of the office, customers securely authorize their banking operations in Ak Bars Business Online and Ak Bars Mobile. User sees and verifies the correctness of payment details on the screen of a mobile device: number, amount, date, and recipient’s account. Another advantage of this solution is the ability to perform operations on a smartphone being offline, while a transaction signature can be generated online.

— How do corporate customers evaluate PayControl?

— Customers do not want security requirements to complicate their lives. In fact, PayControl is one of the few solutions that greatly simplifies the interaction with the bank.

— Another important initiative in corporate banking is the transition to escrow accounts. What is the action plan in this direction?

— Ak Bars Bank has the authority to open escrow accounts and has developed loan products, formed resources and competencies to review borrower applications.

It is important to know what the developer values most when receiving financing from the bank. Construction market remains a high-risk sector in terms of loan repayment. The share of a financial institution in this sector depends on the risk appetite of the bank: whether it is ready to invest and reserve for potential losses. We fully participate in this initiative; we have large customers whom we finance.

— How are industry-specific construction risks and work of RBS combined?

— Digital transformation helps mitigate risks in remote service channels. According to The Regulation of the Government of the Russian Federation on the integration of banks with the Unified Housing Information System (UHIS), communications should go digital. This makes the developer’s documents (permissions and project documentation) more transparent. Document management optimizes operations of inspection bodies that do not need to request these documents on paper, etc. So this market itself goes online, and remote banking systems only contribute to this process.

— What is Ak Bars Bank focusing on when developing corporate digital products?

— We focus on three main competitive advantages. The first is content, products, and information about them. The second is improving the quality of customer-bank relationships. This is greatly influenced by the ease of the content use, as well as the way it is provided. And the third is digital platforms that deliver our content to the customer. This also includes remote banking systems.

All these three aspects are focused on the joint creation of a personal value chain for the customer, as well as simplifying the customer journey map: from the need recognition to the moment of purchase and strengthening of loyalty to the bank. The customer’s decision depends on how well this journey has been followed: whether the customer will continue to be a user of the bank, buy our products, and make cross-buys.

I’ll tell about our experiment. Svetofor (Traffic light), our due diligence service, implemented in cooperation with SKB Kontur, indicates risks of cooperation with a specific counterparty. However, the escrow service is perfectly integrated into this chain of relationships. Escrow is widely used abroad and is a sort of a well proven letter of credit.

The experiment proves that digital transformation is closely linked to a change in the culture of the financial institution itself. Conceptually, it’s customer-centric. If you do not train new organizational skills, it is impossible to introduce positive changes. This also assumes a culture of decision-making on the introduction of new services to the market based on an analysis of customer demand. The process can be supported by using open data about the customer and his operating activities within the bank, studying of focus groups, conducting in-depth thematic interviews, and so on. The need must be recognized before the product enters the market. This is a hard-and-fast rule.

— What can the bank offer to people who have not yet become your customers?

— The step-by-step digital transformation of business processes and products is the main focus of corporate business in the bank. We count on customer journeys getting digital across small, medium, and large businesses.

For example, the Personal Account service enables both legal entities and individual entrepreneurs to remotely open a current account with a minimum package of documents on the bank’s website. Thanks to this solution, we save an important resource for the entrepreneur—time.

Another important area is the development of non-banking services. Among them are cloud accounting, online cash desks, legal assistance, a document constructor, Kontur.Declarant, and others. All these services and products help new entrepreneurs to do business without being distracted by other things. In this case, the bank becomes an assistant to the entrepreneur in the development of his business, realizing that the success of the customer is the success of the bank itself.