Sberbank: “Our objective is to help businesses regain the ground they lost during the pandemic”

Anna Loevskaya, Director of Sberbank’s Digital Corporate Bank Division, talks to Efma about the bank’s interaction with corporate customers during the coronavirus pandemic and the measures taken to support entrepreneurs. She stressed that the digital availability of financial and non-financial services of Sberbank helped support customers during the lockdown because online banking is becoming a one-stop source for entrepreneurs to access all business processes.

Sberbank: “Our objective is to help businesses regain the ground they lost during the pandemic”

2020 has been an outstanding and significant year in which many financial institutions have shown compassion and provided fast first aid packages to their SME clients who were hit hardest by the pandemic. Through a series of articles in the coming months, Efma is highlighting some best practices from banks in different geographies to show how to support SMEs in a time of crisis. Sberbank is one such example in Russia. In this interview, we spoke with their Director of Digital Corporate Banking about what they have been doing for their SME clients.

Recent reports show that SMEs are considerably weakened by the Covid-19 crisis. What has the situation been like in your country?

The situation in Russia is not unique because the coronavirus pandemic has made life difficult for companies throughout industries. Offline industries — tourism, leisure, entertainment, consumer services, and education that could not migrate online quickly — have been the first to suffer the blow. We see our task as helping businesses regain their lost ground.

What were the immediate first steps that you have taken as a bank internally to cope with the crisis and faster respond to clients?

Countering the pandemic has required mobilization and concerted action. The most important thing was to support entrepreneurs across the country. Not only did we implement all government measures, but we also designed our own. Some of them are aimed at SMEs in general, while others focus on sole proprietors and firms from the most affected industries.

I will name three main programs. Loan restructuring through our proprietary program as well as through state programs. Loans to businesses who seek to resume operations at 2% per annum under the program run by the government of the Russian Federation: companies that will retain at least 90% of their workforce by March 2021 will not need to repay the loan (the principal and interest will be repaid by the state). The government’s paycheck protection program at 0% (there is a six-month grace period when you don’t have to repay the principal). An aggregate of over 220,000 small business enterprises have taken advantage of these support measures at Sberbank.

As for the speed of our reaction and customer service speed in general, the digital service channels that we’ve been developing since 2015 have proved to be of great help. I’m speaking, first of all, about the mobile application and the website of our online banking solution SberBusiness. SberBusiness is now the key channel for interaction with corporate customers who use it for over 99% of their transactions. So, the days when entrepreneurs had to visit our offline branches to perform routine operations are long gone. Amid the pandemic, our task was to move the remaining services online as quickly as possible to minimize the risks of visiting public places, which include bank branches, for our customers.

When I say “the remaining services”, it’s not only about financial services (many of them have been available online for several years now — you can issue cards, manage a payroll project, work with investments and foreign accounts online). It’s more about the non-financial services that various companies in our ecosystem provide. The marketplace inside our online banking has 42 business development services, with the most popular being the contractor verification service, three types of online accounting (Accounting for Sole Proprietors, My Accounting Online, and My Accounting Outsourcing), and electronic document management. Other offerings include legal support for companies, telemedicine, logistics, bulk purchases, and much more.

By the way, speaking of the business support measures, when they were approved SberBusiness already had the option of applying for and receiving loans online and we only had to modify it for the targeted programs. And, of course, amid the lockdown, the digital channel became the key avenue for users seeking soft loans and debt restructuring. For example, as much as 62% of all applications were submitted via SberBusiness under the State Support at 2% program, while under the Paycheck Protection Program the figure reached 87%. Furthermore, we have allowed users to sign loan agreements without visiting the bank in person: the share of online loans amounted to 90% under the State Support at 2% program and reached 80% under the PPP.

I would like to note that the quality of business loans has reached the next level over the past year. Today, customers get automatically-calculated borrowing limits which they can “activate” online at any time. In half of the cases, the decision on such loans is made within two minutes. This has become possible with the introduction of AI models that calculate borrowing limits automatically by analyzing a wide range of parameters. In the small business sector, as much as 84% of clients apply for loans online, and 60% of transactions are made without visiting offline branches (67% and 16% in 2019, respectively).

And we go beyond loans. SberBusiness lets you issue other products, for example, a guarantee to participate in public procurement. Moreover, you can have it on paper or in electronic form, which does not require you to go to an offline branch. The share of digital guarantees in the total volume already stands at 25%. Online you can issue a corporate credit card, take out an overdraft (which allows businesses to make payments even without zero balance), pick up a car for lease or apply for factoring.

How are you helping your SME customers face the impact of the covid-19 crisis?

Now, we need to focus on recovery and we have already provided 143,000 small business customers with loans worth RUB150,000 bn for the resumption of operations at 2% per annum. But purely financial support is not enough here. Knowledge is of great importance, and we try to “nourish” our entrepreneurs with it by applying different formats. For more than a year, SberBusiness has been running short interactive stories where we report important news, offer targeted products and services, and share business development tips. For half a year now, we have regularly been informing users about the measures to combat COVID-19, running free masterclasses on business survival in a lockdown, and anti-crisis webinars with leading experts and famous businesspeople. We’ve recently added the online COVID-19 symptom checker developed by our SberHealth telemedicine service to stories.

To shield businesses from unpleasant surprises, we offer Business Analytics, a service embedded into SberBusiness and helping entities produce a financial forecast and keep management accounting based on current indicators, which lets stakeholders detect upcoming cash gaps or debt pits before encountering them. A built-in contractor verification is yet another useful assistant letting you evaluate a potential partner through due diligence, find out if this partner is facing litigation, and whether or not everything is in order with his business.

Our services help businesses grow even when the rest of the market is knocked out. We have a service to help companies create websites and online stores, promote themselves across social networks, and access electronic trading and auctions. Services that were previously only affordable and accessible for large companies are now available for small businesses. And if we consider the crisis as a window of opportunity, then now is the best time to rethink the very approach to doing business and make it more conscious.

Did Covid-19 have an impact on your SME customers and their shift toward digital banking? Do you have any figures that might demonstrate this?

Yes, of course COVID has spurred digitization for everyone who continued to use banking services in the old-fashioned way. The year 2020 has already broken records for SberBusiness traffic. It’s no wonder as remote banking remained virtually the only way to manage a business during the total lockdown. A real “explosion” of SberBusiness traffic was seen on April 30, 2020, when 2.1 million people visited its home page. In H1 of this year, the average number of users in the system was 1.05 million, and the monthly active users (MAU) metric now reaches 2.3 million.

The mobile application saw its MAU up by 20%, to 972,000 users, year-to-date. The proportion of customers interacting with the bank through the mobile application only jumped from 34% to 46% of the app’s monthly audience. We are constantly expanding the functionality of the application so that our customers can use it without feeling the need to go to the website. For example, there is now a marketplace with 17 non-banking services, including online accounting, a lawyer for the business, a contractor verification service, etc. We have also introduced contactless payments — so you don’t need to have a cash register at a POS and can carry out transactions using a QR code — and an AI-powered voice chat to interact with the bank. We will be developing the distribution capabilities of platforms, integrating more non-financial services into the internet banking solution, introducing voice control, embedding AI in all processes, and expanding the pre-login zone.

How have your relationship managers served SME customers during the pandemic? Did you have to change your way of working and do more remote work? Has it been a smooth transition?

We adjusted the operating patterns promptly as pandemic restrictions were imposed. Some managers worked remotely, but the offices and branches serving the incoming stream worked as usual. During the pandemic, customers mainly sought financing to pay salaries and resume operations, applied for debt restructuring and products that allow you to do business remotely.

More and more banks are launching online tools to help their SME customers to manage their business, transform digitally, and grow. Where do you stand on this point?

Lockdown has accelerated digitization across many verticals and triggered qualitative changes. However, as the digitization leader in the country’s banking sector, Sberbank had a significant advantage of already being digital as the pandemic set in: a solid foundation was laid along with the first floors of a digital building, which we continue to construct.

Sberbank customers can already register a company and open an account without visiting the tax office or the bank. As much as 80% of our banking products are available to corporate customers remotely. The cloud service called My Trade allows an entity to control the work of sellers and register sales; several geographically distant offices, shops, or warehouses can be combined inside one system. An online bookkeeping service calculates advance payments, taxes and fixed payments, and generates tax and personnel reporting automatically. Recently, we have launched logistic solutions for distance selling: SberLogistics offers prompt courier delivery for distance selling. We’ve rolled out SberBot, a chatbot that will help businesses organize technological feedback for their customers online.

Three or four years ago we realized that internet banking should become a one-stop source for all business processes an entity has and we have been moving in this direction since then. We already had solid traditional internet banking for transactional needs with an extensive catalog of services for businesses. But over time, this catalog grew to an alarming size, making it quite difficult to find anything in it, so we decided to reconsider our approach. As a core pillar we embraced the fact that every entity has an individual in it. And everything should be clear and convenient for this person inside online banking, just like it is with e-mails or social networks. Also, the person should be interested in this. This is how we came up with a new online banking solution with a thought-through UX, an improved customer journey, interactive sections, a story feed, widgets, contextual tips, integrated services, an online chat, and a smart store.

Let me tell you more about the smart store. It helps users who “are just browsing” to understand the huge catalog of products. We’ve made two selections. The personal selection speaks to the client in the language of tasks. For example, it selects services for automating a retail point of sale or increasing the average order value. The selection called Popular with Companies Similar to Yours recommends products that have been purchased by users who are similar to the customer profile. To do this, we use a ML model that takes into account more than 150 characteristics from the customer’s profile, searches for users similar to this customer, analyzes what products they use, and selects the most relevant ones.

Moreover, the smart version store includes stories that pop up along with contextual tips when some of the bank’s offerings may be especially relevant to the user. Through stories, the user learns the main things about the service, and if this is not enough, there is a microlending site with answers to FAQs under the story card.

Early this year, we’ve launched a marketplace of services — previously available only on the SberBusiness website — inside the mobile application and applied the same mechanics for switching to services through stories. It turned out that stories with services get four times as many clicks in the mobile application as compared to the website. Now the SberBusiness mobile application accounts for up to 40% of services sold on our marketplace even though only 17 out of the website’s 42 services are available so far, and the website audience is more than twice as big as that of the mobile app. For example, loans sell 25% better through the mobile application than the website. Accounting services sell twice as well, cloud CRM sells 3.5 times better, and sales of the Business Profile payment service are 6.8 times higher even though these services do not have an adaptive design: by subscribing to them via a smartphone, you will use them on your desktop.

Thus, Sberbank is confidently moving from digital to mobile like the corporate banking market in general, with entities following the path that our retail customers have already traveled — the SberBank Online internet banking app is much more popular than the website, which appeared much earlier and was once the only one out there. This is only logical. As I’ve said, most of the business owners who have an account at Sberbank are also our retail customers. After having a positive user experience online as an individual, they safely move to mobile when doing their business, expecting the corporate internet banking solution to be as easy, fast, and convenient for all matters. And we have the resources and competencies to provide it all. This is what we are working on right now.

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Keywords

Digital/Mobile channels Covid-19 Customer service SME/Corporate Bank Products & Services Transformation

Geography

Russian Federation