After running its course, the original Call for Leaders – 3Q was completed successfully, achieving its intended purpose of bringing a positive, insightful, or otherwise constructive view of the Romanian business scene in the context of the current crisis. Now, Business Review followed up with some of Romania’s top professionals and entrepreneurs for #Call4Leaders part II – Back in Business, to see how they mapped out the long-awaited return to normality.
Current conversation: Henk Paardekooper, CEO First Bank Romania
How do you define the new normal that everyone should submit to?
First of all, I don’t like this term “new normal”, but I do know that it is a popular phrase. Because what is normal and what is new? I think a pandemic is rather abnormal. I am a pragmatic and I think that the path to overcome this period is about responsibility and focus. In my opinion, after this period of relative blur and uncertainty, we should all concentrate on getting things done. We see that for about four months already, despite attempts which were sometimes very radical, we cannot stop the pandemic just by staying home.
The months of total or relative lock-down generated some economic effects which will only start to be really visible after all the support measures would have been stopped: when payment delays are gone, when unemployment support and technical leave is gone, when companies will have to deal with the decrease in demand and the increase in operational costs.
There are many theories about whether there is or it will be a new normal but I think that our attention should be focused on keeping the economy going while keeping a discipline in health-related matters.
It also seems logical to me that the pandemic cannot be fought with economic measures but with health-related measures. Yes, we do have to keep distancing, to wear the mask, to avoid crowds, disinfect surfaces and wash hands often but we also have to continue to keep the engine of the economy going. The virus is here to stay until a vaccine will be available and until it will be produced and implemented in relevant percentages. This may mean a period of maybe 2-3 years which is way too long for any economic balance to be kept in equilibrium. If we do not regain this relative stable mind-set the demand will decrease even further, the money will not circulate in the economy and many people and business will suffer. This is why my bet is directed towards individual responsibility on the health side coupled with proper tracing and control and with development-economic functioning on the business side.
Has this crisis altered your optimism or hopes for your business plans in this calendar year?
First Bank started this period in a somehow privileged position: we had our plans quite clear, our intention to build a mixed digital and human touch organization was actually on its way and also responding quite well to the various needs resulted from the distancing rules. Our video banking platform, for example, which allows a direct video conversation with the bank without a visit to the physical branch, got a significant increase in usage. The same goes for savings products, for example, which in March were made in person in a 90% quantum, while in April 60% of them were done via digital services.
We also had a tense period as the pandemic caught us in the middle of the migration and integration of Leumi Bank. As you may know, such processes cannot be stopped once started so we had to do this with teams working from 2 separate locations and from home. It was a very intense and tough work but we succeed as planned.
We also finalized a credit solution which reduces the operational time with 80% and it is able to offer a response in 24h.
We launched a new mobile application, built from the scratch in the past one year, finalized during these times. Behind the interface which we think is really fresh and user-friendly, there are automation of processes and changes and robots that we designed in the past one year and implemented also during these times. I choose to see that we can stay on course – maybe with a bit more stress- but it is possible to continue the work needed by our clients.
I also think that in comparison with other previous troubled periods the banks are now better prepared to serve their clients, more solid, with a significantly stronger buffer.
I am optimistic about the fact that we can work to reach our objective in becoming a better partner for our clients -with simple and easy to reach services and products. However, I am not that optimistic about the chain effects that may be generated if we do not mobilize the economy.
What’s next for the industry you are currently representing?
Firstly, I expect to see the banks’ involvement in supporting their clients’ plans and the economy at large. Some of the companies will need investment money to re-settle their business plans while being confronted with decrease in demand and less available resources. We will see the banks trying to keep a balance, encouraging those with a development mind-set and realistic plans while discouraging those that expose themselves to future difficulties. Risk evaluation will be important as well as thoughtful advice and guidance. I am a banker and of course I think that banking is an essential service but I guess that in the coming months the knowledge and capabilities of the banks will actually sustain viable companies to develop for the benefit of the whole economic engine.
The digitalization will continue and more and more services will be added, I am sure not only for the banking but for the whole economy. It will be a period of focus on efficiency.
Consolidation of banks, a process that is expected to happen for some time on the local market, may be also a direction to witness. Some players may opt to join forces for a higher efficiency or due to complementarity in their offers and portfolios, some others may re-orient regarding their markets.
In our specific case, we will continue with the transformation started one year and a half ago. We already are part of IMM Invest and we also discuss with our clients aside this project with the same aim: identifying projects that will allow further developments, will keep jobs and the economy going.
I conclude repeating what I think may be a winning combination: responsibility (with all its faces, individual and social) and focus on economy. So, nothing new and very normal!