BRANCHES +REMOTE BANKING = MIXEDAPPROACH@Kozlov_SergeyNadra Bank Board MemberDirector of Retail BusinessPhD in EconomicsJu...
MOVIE: ASSAULT ON WALL STREETA security guard for an armored truck,Jim is a blue-collar New Yorker whoworks hard to earn a...
FINANCIAL CRISIS: BANKING VS. CASH1. Raise your hand who wants tolose all your life savings due tosome financial instituti...
20 YEARS AND 3 CHANCES TO LOSE ALL LIFE SAVINGSDate Consequences of Financial Crisis in Ukraine and Russia1990-1992- Fall ...
LIFE FINANCE HIERARCHYLifeFinanceRemoteBankingBranch BankingMoney ExchangeNatural ExchangeExperienceServiceUtilitySurvival...
LIFE FINANCE DEFINITIONLife Finance (personal finance) refers to the financialdecisions which an individual or a family un...
LIFE FINANCE HIERARCHY PRINCIPALS!  5 levels of Life Finance are ranked, according tothe order in which they influence hum...
LIFE FINANCE HIERARCHY BY COUNTRIESLevel	  GDP	  per	  capita	  (current	  US$)*	  Countries	  Remote	  Banking	  >	  30	 ...
The more you know about financial institutions andbanks the less TRUST you haveCountry	   TRUST	   Level	  Rwanda	   91%	 ...
M-PESA CASE: FROM NATURAL EXCHANGETO MONEY EXCHANGEUTILITY
A CENTURY AGO: FROM MONEY EXCHANGETO BRANCH BANKINGSERVICE
15 YEARS FROM NOW: FROM BRANCH BANKINGTO REMOTE BANKINGE X P E R I E N C E
THE FUTURE IS HERE: FROM REMOTE BANKINGTO LIFE FINANCEPersonal
VALUE CHAIN: EVOLUTION OR REVOLUTION?Level Value Extractor CommodityLife Finance Life Finance Providers(Internet Start-ups...
UKRAINE: INTERNET AND MOBILE REVOLUTIONTechnology drives the speed of changebut does not determine the system0%10%20%30%40...
TECHNOLOGY DOES NOT REPLACE THE TRUSTM2 to M1 Money Supply Ratio0%100%200%300%400%500%600%2005 2006 2007 2008 2009 2010 20...
BACK FROM BRANCH BANKING TO MONEY EXCHANGE120001300014000150001600017000180001900020000210002005 2006 2007 2008 2009 2010 ...
UKRAINE: SELL BRANCH BANKINGBEFORE YOU SELL REMOTE BANKING!   BACK TO CASH: Due to 2008-2009 economic crisisdecrease in th...
@Kozlov_Sergey@Kozlov_SergeyNadra Bank Board MemberDirector of Retail BusinessPhD in EconomicsTHANK YOU! QUESTIONS?www.fac...
P.S. WHO IS THIS MAN?
P.S. LEV GUMILEV: ANCIENT RUS’ AND GREAT VALLEYAberration ofProximity -significantexaggeration ofrecent events incompariso...
P.S. КВIТКАПРОСТОТАКРАСАПРИВАБЛИВІСТЬГНУЧКІСТЬКЛІЄНТИ МЕРЕЖАПРОДУКТИ ТЕХНОЛОГІЇ
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Branches + Remote Banking = Mixed Approach

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Sergey Kozlov, Deputy Chairman, Head of Retail Business, Nadra Bank, Ukraine

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Branches + Remote Banking = Mixed Approach

  1. 1. BRANCHES +REMOTE BANKING = MIXEDAPPROACH@Kozlov_SergeyNadra Bank Board MemberDirector of Retail BusinessPhD in EconomicsJune 3, 2013
  2. 2. MOVIE: ASSAULT ON WALL STREETA security guard for an armored truck,Jim is a blue-collar New Yorker whoworks hard to earn a living. His wagessupport himself and his wife Rosie,who is on the upswing recovering froma near-fatal illness. Yet things start tofall apart after Rosies healthinsurance stops covering hertreatment and Jims life savings arelost via a disastrous investment hisstockbroker had advised him to make.As a row of professional and personaldominoes falls, Jim is confronted bythe realization that, after beingabused and exploited by financialinstitutions for far too long, he hasonly one choice: to strike back.http://youtu.be/8Y-NqShTj5w
  3. 3. FINANCIAL CRISIS: BANKING VS. CASH1. Raise your hand who wants tolose all your life savings due tosome financial institution?3. Raise your hand who do carewhether it was remote (mobile) orbranch banking when you have realthreat of loosing all your life savings?“This is not a game for me. This is my LIFE!”Jim “ASSAULT ON WALL STREET”2. Raise your hand who prefer bankingvs. cash in circumstances of severefinancial crisis?
  4. 4. 20 YEARS AND 3 CHANCES TO LOSE ALL LIFE SAVINGSDate Consequences of Financial Crisis in Ukraine and Russia1990-1992- Fall of Soviet Union to 15 independent states including Ukraine andRussia- Frozen savings in Sberbank of USSR- Hyperinflation of more then 1000 timesResult: total loss of life savings by majority of former USSRpopulation1997-1998- Collapse on stock exchanges- Local currencies devaluation (2-3 times for Hryvnia and Ruble)- States defaults- Massive bank bankruptcies in RussiaResult: partial loss of life savings due to devaluation anddeposits lost in banks which went bankrupt2008-2009- Collapse on stock exchanges- Hryvnia devaluation from 5 to 8 hryvnias per dollar- Banks bankruptcies with deposits compensated by Deposit InsurancesystemsResult: partial loss of life savings due to devaluation and delaysin deposit repayments
  5. 5. LIFE FINANCE HIERARCHYLifeFinanceRemoteBankingBranch BankingMoney ExchangeNatural ExchangeExperienceServiceUtilitySurvivalPersonal DataChannelLocationTransactionNeed FocusFoodIncomepercapitaFinanceComplexity
  6. 6. LIFE FINANCE DEFINITIONLife Finance (personal finance) refers to the financialdecisions which an individual or a family unit is required tomake to obtain, budget, save, and spend monetary resourcesover time, taking into account various financial risks andfuture life events. When planning Life Finances the individualwould consider the suitability to his or her needs of a range ofbanking products (checking, savings accounts, credit cardsand consumer loans) or investment (stock market, bonds,mutual funds) and insurance (life insurance, health insurance,disability insurance) products or participation and monitoringof individual- or employer-sponsored retirement plans, socialsecurity benefits, and income tax management.Source: http://en.wikipedia.org/wiki/Personal_finance
  7. 7. LIFE FINANCE HIERARCHY PRINCIPALS!  5 levels of Life Finance are ranked, according tothe order in which they influence humanfinancial behavior, in hierarchical fashion.!  So long as lower levels are not covered, theyexist as a driving or motivating force forfinancial behavior.!  Jump from Natural Exchange or MoneyExchange levels to Life Finance is not possibleunless there is a relevant shift in per capitaincome level.
  8. 8. LIFE FINANCE HIERARCHY BY COUNTRIESLevel  GDP  per  capita  (current  US$)*  Countries  Remote  Banking  >  30  000  30  countries:  Norway,  Switzerland,  USA,  Japan,  Germany,  France,  UK  Branch  Banking  >  10  000  and    <  30  000  33  countries:  Greece,  Estonia,  Lithuania,  Latvia,  Poland,  Russia,  Brazil,  Kazakhstan  Money  Exchange  >  1  000  and    <  10  000  85  countries:  Azerbaijan,  Belarus,  Turkmenistan,  China,  Ukraine,  Armenia,  Georgia,  Moldova,  Uzbekistan,  India,  Kyrgyzstan  Natural  Exchange  <  1  000  31  country:  Tajikistan,  Cambodia,  Nepal,  Bangladesh,  Rwanda  * World Bank national accounts data, and OECD National Accounts data files for 2011
  9. 9. The more you know about financial institutions andbanks the less TRUST you haveCountry   TRUST   Level  Rwanda   91%   Natural  Exchange  Cambodia   87%   Natural  Exchange  Nepal   81%   Natural  Exchange  Bangladesh   81%   Natural  Exchange  Norway   73%   Remote  Banking  China   72%   Money  Exchange  India   70%   Money  Exchange  Uzbekistan   66%   Money  Exchange  Tajikistan   66%   Natural  Exchange  Japan   63%   Remote  Banking  Georgia   62%   Money  Exchange  Kazakhstan   57%   Branch  Banking  Estonia   55%   Branch  Banking  Armenia   54%   Money  Exchange  Kyrgyzstan   52%   Money  Exchange  Country   TRUST   Level  Azerbaijan   50%   Money  Exchange  Poland   50%   Branch  Banking  Switzerland   47%   Remote  Banking  Belarus   47%   Money  Exchange  Brazil   45%   Branch  Banking  Germany   38%   Remote  Banking  USA   37%   Remote  Banking  Moldova   37%   Money  Exchange  Russia   33%   Branch  Banking  France   32%   Remote  Banking  Latvia   32%   Branch  Banking  Lithuania   29%   Branch  Banking  Ukraine   28%   Money  Exchange  UK   27%   Remote  Banking  Greece   13%   Branch  Banking  Source: GALLUP World 2012 http://www.gallup.com/poll/162602/european-countries-lead-world-distrust-banks.aspx#2
  10. 10. M-PESA CASE: FROM NATURAL EXCHANGETO MONEY EXCHANGEUTILITY
  11. 11. A CENTURY AGO: FROM MONEY EXCHANGETO BRANCH BANKINGSERVICE
  12. 12. 15 YEARS FROM NOW: FROM BRANCH BANKINGTO REMOTE BANKINGE X P E R I E N C E
  13. 13. THE FUTURE IS HERE: FROM REMOTE BANKINGTO LIFE FINANCEPersonal
  14. 14. VALUE CHAIN: EVOLUTION OR REVOLUTION?Level Value Extractor CommodityLife Finance Life Finance Providers(Internet Start-ups,Social Networks,Telecoms, etc.)BankingServicesRemote Banking Banks Non-cash MoneyBranch Banking Banks Physical Money(cash, gold, etc.)Money Exchange Merchant GoodsNatural Exchange Seller and Buyer ItemLoss of TRUST in existing financial institutions andbanks leads to raise of new Life Finance Providers
  15. 15. UKRAINE: INTERNET AND MOBILE REVOLUTIONTechnology drives the speed of changebut does not determine the system0%10%20%30%40%50%60%70%80%90%2004 2005 2006 2007 2008 2009 2010 2011 2012Internet Users, % of populationUkraine USA
  16. 16. TECHNOLOGY DOES NOT REPLACE THE TRUSTM2 to M1 Money Supply Ratio0%100%200%300%400%500%600%2005 2006 2007 2008 2009 2010 2011Ukraine + Foreign Currency Cash Ukraine USA
  17. 17. BACK FROM BRANCH BANKING TO MONEY EXCHANGE120001300014000150001600017000180001900020000210002005 2006 2007 2008 2009 2010 2011 2012Ukraine: Decreasing Number of Branches
  18. 18. UKRAINE: SELL BRANCH BANKINGBEFORE YOU SELL REMOTE BANKING!   BACK TO CASH: Due to 2008-2009 economic crisisdecrease in the number of branches connected with theswitching of customers from Branch Banking to MoneyExchange rather then development of Remote Banking.!   TARGETING BRANCH BANKING: According to proposedLife Finance Hierarchy Ukraine is on Money Exchangelevel. Further advance to Branch Banking will lead toincrease in the number of branches.!   MIXED APPROACH: The key challenge for UkrainianBanking System today is to restore TRUST and confidence.Branches play key role in this process as well as in theprocess of advancing customers further from BranchBanking to Remote Banking levels.
  19. 19. @Kozlov_Sergey@Kozlov_SergeyNadra Bank Board MemberDirector of Retail BusinessPhD in EconomicsTHANK YOU! QUESTIONS?www.facebook.com/sergey.a.kozlovua.linkedin.com/in/kozlovsergey
  20. 20. P.S. WHO IS THIS MAN?
  21. 21. P.S. LEV GUMILEV: ANCIENT RUS’ AND GREAT VALLEYAberration ofProximity -significantexaggeration ofrecent events incomparison withearlier
  22. 22. P.S. КВIТКАПРОСТОТАКРАСАПРИВАБЛИВІСТЬГНУЧКІСТЬКЛІЄНТИ МЕРЕЖАПРОДУКТИ ТЕХНОЛОГІЇ

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