The President of Sberbank talks about the future of banking retail, mortgages and deposits, inflation and loans, new technologies and the individual psychotype of an employee

The banking services market is changing before our eyes. You can now open a deposit without coming to a bank office; the share of using remote service channels is growing rapidly. Even Sberbank began to better serve its clients, completely changing the appearance of its branches. Sberbank President German Gref spoke about how banks intend to develop retail in an interview with Forbes. The conversation with German Gref opens a series of interviews with famous Russian bankers on the topic “Big Retail: The Future of Banking Retail.”

— What will a retail bank look like in the future?

“We can only guess in which direction banking will move. Obviously, it will move towards remote channels - that is, work via the Internet. First of all, this is access to services through smartphones, tablets and other mobile devices. All mass and standardized banking products will migrate to users' mobile phones. This includes payments at points of sale using NFC technologies (Near Field Communication - a technology for exchanging data between devices at a distance of about 10 cm - Forbes ), this includes access to all client accounts and services through mobile offers, and geolocation of the nearest branches and ATMs from your phone and automation of regular payments. It is obvious that high technology will become the core of banking.

— You say that the future of the bank will be determined by technology. And what will bankers bet on - using phones for payments, remote opening of deposits, instant calculation of an individual loan rate?

— Everything you listed will be the main focus. The entire product line must be both mobile and stationary. For example, we have an online bank - Sberbank Online. In the middle of last year, we provided clients with the opportunity to open deposits remotely. By the end of this year, according to our forecasts, every fourth deposit in Sberbank will be opened remotely. Further. We have launched a service such as automatic payment for mobile communications. What it is? You don't have to go anywhere, you don't have to do anything. The bank receives an invoice for you, transfers a certain amount for you, automatically maintaining the balance on your mobile phone at the required level. This year we should launch automatic payments for housing and communal services.

— Why, in this case, do bankers continue to build networks of branches throughout the country?

— In the next 10-15 years, inpatient departments will have enough work. The demand for them will gradually decrease: the number of people visiting branches will decrease. The needs of clients who come to the bank will change. What does the visitor need now? Two types of services: cash withdrawals and transactions. In the future, the most popular service will be consultations. People will come to chat, solve problems, listen to the opinion of a specialist, or choose a banking product.

— Let's talk about crowdsourcing. Your bank was the first to launch this type of work in the fall. Please tell us what are the results of such joint work over six months?

— Crowdsourcing has many faces. We only use a few of its forms for now. This is sourcing ideas and sourcing people. On the first platform we collect ideas - so far only within the team. But this year we plan to start communicating in this form with all our clients. Our production system provides such a crowdsourcing platform. All people are included in the idea generation process. We have a so-called exchange where all people can send their proposals: what can be improved, what service does not suit them, how they want to reorganize this or that process. The system for implementing these innovations has brought us a total of more than 10 billion rubles in net profit over two years.

The second platform is people sourcing. Here we conduct a so-called assessment - an assessment of professional and personal qualities in remote access mode. This way we can assess a person’s individual psychotype, his managerial abilities, professional knowledge and propensity to commit crimes. An employee logs into the system, answers questions in real time for two to three hours, the program closes, and the data goes to the assessment center. And we get a complete snapshot of a person’s potential. Currently, 20,000 managers have undergone this procedure without fail. This year we will open it to 100% of the staff. Any bank employee who wants to can say: I want to become a great back office manager. He will open an assessment program corresponding to this specialty, take the test, and if, according to the results, he falls into the “green zone,” we will accept him and drag him out for deeper study. Next year we want to make this platform available to everyone.

— Sberbank has a functioning “office of the future.” Will all banks, including private ones, be forced to switch to such service formats in order to attract customers?

— Banking is becoming an increasingly expensive process. In the long term, bank margins will fall. And the number of banks will decrease, because it will be difficult to withstand competition. First of all, regulatory requirements are seriously increasing. Basel II is very serious and complex requirements for all banking systems and employee qualifications, which not all banks are able to fulfill. And secondly, large investments are needed. Banks will be forced to invest money in modern systems and technologies. This is an inevitable trend for everyone.

Not all private banks will find the money for this. There will be consolidation of the banking sector. I don’t think that this process needs to be precisely managed so that, for example, there are five or fifty banks. But there will definitely not be under a thousand of them.

— How deposits will develop in the future. Will this classic product remain as it is now? And how will deposit rates change in the coming year?

— At its core, the deposit will remain a classic product. Of course, it will become more and more complicated. As financial literacy increases, more complex products will be in demand. For example, a deposit plus borrower insurance. Deposit rates are rising along with rising lending rates. So far, what is happening in the market - I mean the situation with liquidity - is leading to an increase in rates. But I don't think the growth this year will be significant. And if the liquidity situation normalizes after the elections in the second half of the year, then I assume that rates on both deposits and loans will fall. Because inflation in the region of 5-6% should stimulate a fall in market rates. But if the liquidity deficit remains at the same level as now, then we cannot expect a fall in rates even at this level of inflation. I really hope that the liquidity situation will normalize. A new government will be formed, a clear program will be announced, and investor confidence will be restored. And the influx of capital will begin.

— There is a gradual abandonment of targeted loans and their mass replacement with credit cards. What will be the next step, what is the essence of the change in credit products?

— Classic credit will change little. Here we can talk, first of all, about the transformation of methods of providing loans and methods of assessing credit risk. That is, about the individualization of interest rates depending on the credit history of each citizen and his company. Several years ago, we launched a product on the market - UDBO - a universal banking service agreement. Having once signed an agreement with the bank and received a credit card, the client, along with it, also receives access to all types of banking services. Such universalization will probably happen throughout the entire sphere. We are currently building a modern customer relationship management system. There we store history for each client. We already know people’s habits and can promptly suggest some correct steps by offering this or that product. This form of work will develop.

— And in this case, what will happen to loan rates in the longer term - over a five-year horizon?

— It will depend on macroeconomics. It is very difficult to predict what the macroeconomic situation will be. Even if we assume that you and I understand how the government’s macroeconomic policy will develop (and we do not understand this), then we will definitely not be able to predict how the external macroeconomic background will develop. I don’t think that we will be able to overcome inflation and reduce it to 2-4% per year. It seems to me that a very realistic goal is inflation at the level of 5-9% per annum. Accordingly, we will have approximately the same level of interest rates as now. But here, as they say, options are possible.

— Mortgage loans are the only credit product that is likely to remain as is. Or are changes possible in this direction as well? Will the mortgage rate decrease as the government promises?

“I don’t see much change here.” Sberbank is developing credit factory technology. Last year, we began to issue about 90% of mortgages through such factories. As CRM systems develop and the borrower's profile is understood, all these processes will accelerate. The mortgage rate depends on the macroeconomic situation. Reducing it to 2-3% in the next 5 years is an unrealistic task. In a very optimistic scenario, it will be 6-8%.

— Non-state banks began to open deposits and issue loans remotely, using couriers. This is an additional expense item, but the bankers agreed to it. Will this type of customer service become a mass phenomenon or will it remain a service of small retail banks?

— I think this service will be in demand. Of course, it won't be massive. It will be ordered by people who can pay for a manager to come directly to their home and fill out forms. When I talk about clients, I always try to extrapolate my preferences to our services. If it is possible to invite a manager to your place for reasonable money and not have to go to the bank office, I would rather do it. Therefore, we plan to provide such a service for our VIP clients.

— Who will be the engine of progress in retail banking: large state banks or small monoliner banks, like Russian Standard, TKS Bank, Svyaznoy Bank?

Both models will develop. Narrow specialization brings benefits in terms of service speed and efficiency. However, I can't paint a rosy future for monoliners. The market will be in greater demand for universal services. You are not interested in dealing with a company that only provides one service. If you come to Sberbank, we begin a long-term relationship with you. You will be able to receive a full range of all services. And a monoliner... It's like short-term relationships and marriage. One-time contacts are possible and always will be. But in the end everyone gets married and gets married.

German Gref: “There will definitely not be nearly a thousand banks”