Olena Gryniuk (SME Banking Club) talked to István Fetter, Head of the Small Business Division at CIB Bank (Hungary), about competition on the Hungarian market and how they are servicing SME customers at CIB Bank.
Olena Gryniuk: What is your segmentation of small business customers in the bank, and how many small business customers do you have in your portfolio?
István Fetter: Small entrepreneur customers include individual businesses, business associations or small-scale agricultural producers with less than EUR 1M net annual revenue, managed within the Retail Division of CIB Bank. In certain cases, we also manage in this segment clients with higher net sales. We have almost 55,000 small business clients, which represents more than 10% of the Hungarian market. We have a different segment for companies with net sales amounting to between EUR 1M and EUR 50M; they are managed under the Corporate Division.
OG: What are the main channels of acquisition of small business customers at CIB Bank at the moment?
IF: We have an omnichannel acquisition strategy, so we use advanced CRM, IT and other models to acquire new small business clients. However, the most powerful way to get new clients is still based on personal contact and recommendations, i.e. word of mouth remains a key driver. CIB Bank has 64 branches with more than 85 small business banking advisors. Besides having branches all over the country, we have set up an Acquisition Team to contact prospective clients instantly, to serve them and to provide them with a flexible, tailor-made service even at the client’s premises. We analyze all available data on our potential clients, which enables us to offer them pre-filtered loans, suitable account packages or POS offers. We have a dedicated Small Business Team at our Call Center (CIB24), which is also responsible for acquiring clients via cold calls besides our small business advisors. One of our strategic goals in 2019 was strengthening and deepening cooperation with third parties (mortgage and insurance partners) to further broaden our sales team, just as we had already successfully done in our Consumer Segment. Thanks to these efforts, now there are more than 20 contracted partners’ agents, which is like having several thousand more colleagues to acquire new clients. It is increasingly important to customers to have the option to consider various options and to have a trusted aggregator or advisor to find them the best deal. We put a great deal of emphasis on acquiring new customers through digital channels as well. We use Google AdWords and aggregator sites to make CIB Bank more visible on the market. We have a unique online platform (Small Business Loan Offer Generator), where small businesses can calculate themselves the best deal based on their given data and chosen product features, and receive a non-binding indicative loan offer. We also use our award-winning mobile app to sell products for our clients.
OG: Which digital solutions do you have right now for your small business customers?
IF: We have a wide range of digital solutions for small businesses, such as the CIB Mobile Application, CIB Bank Online, CIB Internet Bank, Business Terminal, eBroker and CIB Mobilbank. Our responsive CIB Mobile Application can be used both on iOS and Android, and all relevant banking functions are available within the app (e.g. free notifications about transactions, balance queries, current account(s) and transaction overview, transfers, savings handling, etc.). Our internet banking platforms are also easy to use and are available almost on every device (PC, tablet, mobile). A web browser is all that’s required to arrange for the most important banking operations. Our recent analysis shows that 87% of our clients have been using at least one digital channel, of which 77% do so on a regular basis. 68% of our customers use the CIB Mobile Application, of which 75% use it frequently. Basically, all payments are done online in the small business segment, and CIB Internet Bank is the strongest channel in terms of online payments. We also have a state-of-the-art treasury platform, through which small business customers can immediately receive the quotes they require.
OG: What are the main challenges banks are experiencing on the Hungarian market in the area of services for small businesses? Do you feel the competition from Fintechs?
IF: The most important and challenging question is how to ensure better service quality in the small business segment. The name of the game is who is going to own the client relationship, whose digital platforms are going to be used and who gets the clients’ most important assets, namely their time and attention. It is by far not only being the cheapest and fastest, but sending that message in clear language, after having completely understood your client’s needs, and keeping your word both in terms of quality and deadlines. There is strong competition among banks on the Hungarian market, in which you must have a clear vision on how to reach clients, earn their trust and fulfill their expectations. Fintechs do not provide more advanced solutions to clients; however, they are able to provide certain services faster or at a lower price. These are important considerations, but not enough in the long run, where a trusting, strong relationship makes all the difference. However, banks have a lot to learn from Fintechs and should further decrease margins and complicity in all areas, including products, processes and communication.
OG: What is the main advantage of CIB Bank on the market? Why are small business customers choosing to open an account with you?
IF: CIB Bank has a stable, international background thanks to our Italian parent company, Intesa Sanpaolo, which is one of the largest banks in Europe in terms of market capitalization. A lot of great initiatives and ideas are originated by them, which can be easily implemented generally by sharing best practices and working together with other subsidiaries. CIB Bank has branches all over Hungary, so we’re easily accessible to clients throughout the country. In 2018 we introduced a new client service model in our branches, which enables us to transform the process of opening an account into a pleasant journey for the customer, where they are greeted by a dedicated employee upon entering their branch, who then helps them find the most useful channel to manage their finances. We have worked up a set of various current accounts (CIB Partner current accounts) for small businesses, which can be chosen according to the client’s individual characteristics.
OG: What does CIB Bank do in terms of high-quality customer service?
IF: We continuously train and develop our banking advisors. We have a unique program, the Small Business Academy, which ensures that our advisors provide real solutions to our clients’ well mapped and thoroughly discussed needs. The Academy has 3 different modules, and every module focuses on different topics. The skills our colleagues pick up during these modules makes them unique on the market, which ultimately benefits our clients.
Visit CIB Bank HQ during the Study Tour in Budapest on March 30-31, 2020. Click here for details