Banks get up close and personal

In recent years, lenders have started to try to get closer their customers, in order to better preempt their needs.

Although this trend has been visible for years, the downturn has seen the Romanian banking market take a different approach. Lenders were initially focused on opening “friendly” branches, in order to counteract their austere image in the eyes of the public.

This process was then refined, with customized products adapted to the economic conditions being launched on the market.

With 2009 being the first full year of the economic crisis in Romania, lenders have had to find ways to help their customers through this difficult period. Banca Transilvania (BT), Banca Comerciala Romana (BCR), GarantiBank, OTP, RBS and others have chosen to adopt such a strategy, and have tried to be innovative in doing so. The reason behind it?

“In modern times companies need to come up with new products. Indeed it is about a trend, but in particular it is proof of their adaptation to the new market conditions,” says Anca Rarau, marketing and communication manager at BT.

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Good knowledge and readjusting to meet the needs of customers is a key factor in the success of any business. RBS Romania representatives say that these new offers come in response to consumers’ increasing need for financial services. “The economy must work; hence the companies must survive. By today even those banks that were reluctant to accept the economic circumstances are more helpful,” says Laszlo Diosi, CEO at OTP, of the current trend.

In many cases, products and services launched by lenders in this period were not exclusively created for the time of crisis.

This means that lenders could harvest the results of their present investments in the years to come, too, free of the adverse economic conditions.

From Google to grace periods…

The way that each lender is attempting to adapt to its customers’ needs depends on its specific strategy. BT, for example, has launched in conjunction with Google the marketing project Google Friend (Prietenul Google) – a first on the local market.

Its main purpose is to encourage an online presence and promote SMEs, using the great potential of the web.

“It is dedicated both to the BT customers who use the Banking Subscription IMM (Abonamentul Bancar IMM) and to entrepreneurs who intend to build or promote their website,” says Rarau.

In her opinion, the program is not tailored only to the crisis, but is also a way to save resources and promote a business more cost-efficiently.

“It is about coming up with a useful product, suited to entrepreneurs, despite the situation that both the local economy and their business are facing,” says Rarau. Through the program BT offers its customers the opportunity to test a promotional channel and the support to grow their business. “We estimate that at least 3,000 customers will use the BT-Google program by the end of this year,” says the lender’s representative.

Meanwhile, OTP has decided to offer consultancy services to its corporate customers in this period, to help them to face the crisis. “One of banks’ major tasks is to be a kind of personalized adviser for their customers. With companies we usually help them structure their business in order to grow in a healthy way,” says Diosi.

In his opinion, during these troubled times it is even more important for bankers to be in almost daily contact with their customers and help them restructure and adapt to the changing environment. “It is in banks’ interest to help keep their customers’ businesses alive,” says Diosi.

Lenders’ banking products are also reflecting the straitened circumstances in which many find themselves.

GarantiBank launched in September a campaign to promote its three-month grace period (“3 luni perioada de gratie”) for borrowers who take out a loan by the end of the year. It takes the form of a repayment holiday which borrowers can take within the first three years of taking out the loan.

“Because we know that unpredictable expenses can occur, we wanted to offer to customers the option of choosing three months during which they can forget about their loan repayments and concentrate on other expenses,” says Okan Yurtsever, retail banking & banc assurance manager at Garanti. No extra interest is payable, and no interest or fees will accrue during the three months.

“We have had positive feedback from our customers in the short time since we launched this offer. We noticed an increase in the number of unsecured personal loans, especially in the local currency,” adds Yurtsever.

The lender has also launched this year other campaigns targeting different market segments. “The most important one this year was for public sector employees,” says Yurtsever. Garanti drew on the expertise of its mother bank for this campaign, which it says reflects the good credit records of public-sector workers.

Elsewhere, RBS representatives say that the lender has launched alternative solutions to facilitate loan repayments, because alternative channels have been its focus since its entry on the Romanian retail banking market (at which time it was active under the ABN Amro name).

“Our strategy for distributing our services has never been based on the development of a massive network of branches, but on a mobile and effective sales team, a carefully selected alternative channel network and a wide range of solutions for remote banking services,” say RBS representatives.

These solutions were part of the lender’s plans before the crisis kicked in. “It is a similar situation for the insurance attached to our products, meant to prevent our customers getting into unpleasant situations. The market was a stable, growing one when we developed these products,” they add.

Banks cozy up to customers

According to Diosi, in previous years, customer-bank relations were neglected. The crisis has helped establish longer and better relationships between the two parties. “Lenders and customers were not really loyal to each other, and instead of long-term, trust-based relationships there was a rush for cheaper and riskier loans. The crisis has made many believe that this relationship must be more trust-based, and not be abandoned for a 0.5 percent gain,” says Diosi. Relations between a bank and its customers can also be influenced by the product or service provided. For example, BT’s promotion Friend Google gives its customers benefits such as: lower operational costs through the Banking Subscription and a voucher required to promote the business through Google AdWords. They may also find new customers and control their promotional costs, with the advertising being viewed only by the target. Banking products and services have developed a lot in recent years, reflecting constant changes in customer demands on a maturing market.

Lenders now plan to offer not only the traditional products which they are familiar with, but also customized solutions, innovative offers that bring them tangible benefits in a specific economic context. As for the future, specialists expect to see a larger diversification in banks’ range of products and services. But one thing is for sure: it will all be done according to risk management procedures.