Lenders explore new turf of leaner, meaner banking scene

Newsroom 25/05/2010 | 13:44

Q: The internet, bikes, school. What have they got in common? A: All are weapons in banks’ armory as they contend with the new reality of their world. With lenders trying to adapt their strategies to the current market conditions, the Romanian banking market is seeing changes in the way lenders do business. Business Review surveys some of the most significant trends on the local banking system to have emerged in the last year.

Anda Sebesi


Lenders ramp up online presence

With a growing number of users from month to month, the internet is becoming a priority in the marketing mix of many lenders. Yahoo! Messenger, Twitter, Facebook and Hi5 are part of the online environment, a promotional channel likely to play a greater significance in the years to come.

The evidence for this is that many lenders are paying more attention to it when they are allocating their marketing budgets to promote their products and services. Citibank, (new online platforms and campaigns as part of its future online strategy), Garanti (which has included online in its marketing mix) and BCR (School of Money – Scoala de Bani) are among the banks that have developed different online projects making the internet one of their main communication channels.

Moreover, after many years of fierce competition between lenders to gain new market share and extend their coverage nationwide, a new era on the banking scene is beginning: the fight is now taking place in the virtual world.

BCR is the first bank to have entered Virtual Bucharest, by opening a branch in Second Life. Plus, ING Bank Romania last year used social networks such as Facebook, Twitter and Hi5 as communication channels for the first time.

It also opened up an online dialogue with Hotnews readers, helping them to better understand its banking products and services. Moreover, the campaign for ING Card Cont’ROL that took place in 2009 used different media, with Yahoo! being one of them.


CSR gets on its bike

Corporate social responsibility (CSR) has been one of the priorities for many lenders in the last few years.

With the environment one of most important areas of their CSR strategies, lenders are making efforts to be “greener” even though they are not actually polluters. For example, UniCredit Tiriac Bank in partnership with MaiMultVerde Association launched in 2008 Cicloteque, the first bicycle rental center in Bucharest.

As part of the project, cyclists were also provided with a spot to park their bikes in the main student areas of Bucharest. The lender invested EUR 130,000 in the scheme. Last year, Cicloteque managed to attract about 8,000 users, three times more than in the previous year, with 1,200 of the total being subscribers.

Elsewhere, Raiffeisen Bank and Green Revolution Association launched in the first half of May the largest free bike sharing project in Romania, with three free cycle rental centers opening in Bucharest. “Raiffeisen Bank supports CSR projects in fields like art and culture, education and also the environment and sport as a healthy lifestyle choice. We think we can have a healthier life and a less polluted city if we re-learn to use the bike,” said Steven van Groningen, president of Raiffeisen Bank, in explanation for why the lender chose to support this project.


Lenders bank on promotions

With banks trying to revive lending activity, promotions for some of the credits in their portfolios have become a strong marketing tool meant to give impetus to the local market. UniCredit Tiriac Bank, CEC Bank, Raiffeisen, Garanti and BRD-Groupe Societe Generale are among the banks that have taken this approach to reviving lending.

It is natural that lenders’ battle for customers is fiercer at the moment, as the public’s disposable income has been significantly reduced.

Plus, banks’ offerings are much more reserved than in the last few years. Charging fixed interest, discounts on interest rates, special conditions for some types of loans in lenders’ portfolio and price campaigns that target mortgage-backed borrowing for individuals are some of the many ways used by lenders to attract new customers and to alleviate Romanians’ fear of taking out a loan.


Banks send borrowers back to school

BCR, Raiffeisen Bank, RBS, MasterCard and Visa are among the organizations that have recently launched financial education projects for the public.

These aim to address the fact that many Romanians are less au fait with financial tools than their neighbors in other Central and Eastern European countries.

For example, RBS Romania launched in the first half of May the MoneySense program, to familiarize people – both youngsters and potential and current customers – with financial products.

MoneySense has three components: to freely offer assistance and financial information in RBS Romania’s locations, financial education for young people on the local market and entrepreneurship workshops for future architects and editors.

“Due to the current context, financial education has become an issue of general interest. We all wish to better understand and to manage our budget and personal finances. MoneySense aims to improve the degree of financial education, including a proper understanding of financial-banking specialized terms. It also intends to educate young people so that they know the basic financial-banking concepts,” says Georgeta Bora, sustainable development coordinator of RBS Romania. Elsewhere, BCR is known for its School of Money project, launched in October last year.

“We initiated this project in response to the public agenda: there is a huge potential to talk to people about money in an informal and open manner,” says Eliza Rogalski, managing partner with Rogalski Grigoriu Public Relations, which set up the program.

According to Daniel Pana, executive manager of the marketing division at BCR, School of Money has the potential to help Romanians take a more mature and responsible attitude to their money.

Meanwhile, Raiffeisen Bank has launched ABCdar bancar, a guide to bank terms, products and services with practical applications.


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