Serving SMEs in Turkey: TEB
Hakan Yurtseven, Head of SME Banking Marketing & Business Development, talks about how his bank is capitalizing on digital trends to deliver top notch services to its SME customers.
Small and medium-sized businesses make up an integral part of the Turkish economy. As the needs of these businesses evolve, financial institutions are working to provide their customers with the digital tools that any modern businessowner needs to succeed. With all of the excellent work going on in Turkey, we wanted to speak with SME bankers about the current landscape in the country and their strategy, key projects, and views on the future of the segment. We will publish a series of interviews over the coming weeks, culminating in a Voice of the Members report that will be published in April. We are sure you will enjoy this deep dive into the SME banking scene in the dynamic country of Turkey.
How integral are SME clients to your institution’s overall strategy? And how would you define key aspects/features of your SME banking strategy?
TEB has always focused on SMEs due to their important role in Turkey’s economic growth.
Turkey has an estimated 3.2 million active SMEs, representing 99.8% of all registered entities in the country. The SMEs in Turkey contribute 44 % of value added, 36.6 % of exports, and 72.4 % of its workforce.
TEB carries out its SME Banking activities under its “consultant banking” approach since 2005.
Benefitting from the worldwide organization and expertise of the BNP Paribas Group, TEB offers exclusive, tailor-made financial and non-financial products and services to small and medium-sized enterprises, agribusinesses and start-ups by acting as a consultant bank rather than applying classical banking.
Focusing on efficiency, value creation, and excellence in customer experience, TEB constantly improves the products and services it offers to SMEs within the scope of SME Banking activities and assists them with diverse solutions introduced in various areas such as growth and competition that represent the biggest challenges for SMEs.
In the field of SME Banking, TEB is organized to cover separate business lines to offer specialized service to its customers that require different products and services of a different scale. In addition to SME and Agricultural Banking, TEB provides solutions to its customers with specialized structures in Start-up, Gold, and Municipality Banking and supports them with information, training, and network opportunities in non-financial areas.
TEB looks beyond the limits of traditional banking and understands the digital future which is being accelerated by the Covid-19 pandemic. The accelerated digital transformation shapes tomorrow’s banking sector and clients’ demands and expectations. Data analytics, the perfection of forecasting models are necessary elements for the improvement of the business model. Developing more effective and comprehensive digital tools and offerings are TEB’s top priority and its digital transformation department is structured under SME Banking.
Another area where TEB leads and differentiates is with its Start-up Business Banking structure in Turkey. TEB has re-designed its financial and non-financial SME products and services for technology start-ups and scaleups specifically. Customer representatives have been specially trained to better understand and service the needs of start-ups and scaleups.
Can you briefly describe your sales and service model of the whole SME Banking business?
TEB SME Banking service model is structured to suit the changing and diversified needs of small and medium-sized companies. SME Banking segmentation provides the right level of service to the right segment. Our TEB SME Banking service aims to offer a wide range of boutique products ranging from foreign trade, project financing and derivative products to supplier financing for companies seeking specialized services and within the scope of its segmentation activities. Customer representatives were supported with specific trainings suitable for their segments on cash management, foreign trade, and financial markets. TEB SME Banking serves with dedicated RMs and aims to increase its contribution by providing advisory services for SMEs with its expert staff who is equipped with digital tools which provide more penetration into the business life of the clients,usage of analytics, prediction tools.
The digital service model has been re-established with the aim of enabling smallscale companies to perform daily banking services more rapidly and including automated credit processes which enable quick response to clients demands. As such, we aim to both increase the number of TEB SME Banking customers and also increase customer satisfaction.
Could you highlight three key projects your institution has delivered to SME costumers within the last 2-3 years? Have all of these projects been digitally-based?
Our multi award winning mobile application, CEPTETEB İŞTE, which provides fast and easy financial transactions for our SME, Corporate and Business customers, was launched in the last quarter of 2019. With CEPTETEB İŞTE, customers can easily perform day-to-day banking, cash management, and investment transactions through digital channels without having to visit the branch office.
TEB is one of the leading banks to support the startup ecosystem in Turkey with “Start-up Houses” concept. The purpose of establishing Start-Up Houses is to contribute to the development of the Turkish start-up ecosystem in technology and exports.
At TEB we launched a new digital program for startups called “Startup2Corporate”. This program differentiates itself from the other startup programs in terms of the content of the programs and its cooperation model. It is a customized program that serves as a bridge between SMEs and Start-ups. The Start-up to Corporate (S2C) program enabled SMEs to follow technological trends and reach new technology products and services while start-ups had the opportunity to reach target customers.
TEB also enables unique services serving financial needs for their technology-based customers in 8 branches with 12 expert RMs.
Effective use of data analytics is one of TEB SME Banking’s strategic goals. In this sense, an automated credit evaluation tool which enables E2E automated credit application assessment for SME clients, efficiency on processes and improving customer experience was developed.
What were the immediate first steps your SME Department took internally to cope with the pandemic crisis and respond quicker to clients? How have you been helping your SME customers face the impact of the Covid-19 crisis?
TEB SME Banking had the fruits of already investing to turn IT into a digital organization and digital-ready workforce. During the lockdowns, maintaining partial presence in offices, on-site and branches, RMs and HQ employees worked from home to ensure business continuity.
TEB has continued its support for SMEs who have difficulties in this pandemic period, particularly in reaching financial products.
The loans of demanding customers were restructured according to their cash flows. Overdraft, business cards, and checkbook limits of existing customers were increased automatically so that their daily banking transactions would not be interrupted.
TEB became one of the leading private banks which intermediates in CGF (Credit Guarantee Fund) credits. With CGF credits, opportunities were provided for SMEs to access long-term credits with favorable interest rates without guarantees.
From your point of view, what will the future bring for the SME Segment? What will SME banking look like five years from now?
In the banking industry, where competition is increasing and the rules of the game are constantly being rewritten, innovation and digitalization are integrated as part of wider mega trends and market determinants are transient in many places. Digitalization, which is closely related to banking and is an indispensable part of our modern service delivery formats, will not only change the rules of the game but will continue to be one of the main determinants of our customers' preferences.
Digitalization and the rise of the platform economy are rapidly changing the way in which firms do business. A strong business ecosystem is necessary to manage this change. The banks that can make use of these developments to better serve SMEs will have a competitive advantage. In order to adapt to this new world, the ability to use data analytics effectively is required.
TEB SME Banking is focused on digitalization, a field that requires innovation, creativity and, above all, application in its business processes. We consider fintechs, which are key players in the digital transformation of the financial sector, as our medium and long-term business partners.
We work with Fintechs, and start-ups in particular, on digital transformation projects which require high software competence and in the development of new financial products and services that demand creativity. TEB's start up business partners are participating as stakeholders in a significant number of these transformation projects.
This interview will appear in our upcoming report "SME Banking in Turkey: customer first". Pre-order your copy now!