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Financial Institutions Strive for Filling Market Niches
(Polish News Bulletin Via Thomson Dialog NewsEdge)New financial institutions are entering the Polish market. They are relatively small businesses, targeting particular groups of clients. The new banks intend to settle in niches, in which competition is not intense yet. Part of them will try to attract the richest clients.
In the next few days Noble Bank, in which the Open Finance advisors (belonging to Getin Holding) hold shares, will begin functioning. It will offer running bank accounts, loans and ? most of all ? financial consultancy for the wealthiest Poles. In this market segment, it will compete with Xelion (consultancy belonging to UniCredit and Pekao, specialising in servicing the most demanding clients).
"Noble Bank's launch is set for June," confirmed Dorota Kossowska from Open Finance. At first, its two branches will be opened up in Warsaw. - Cooperatives on the Offensive
The SKOK cooperative savings banks and ? according to unofficial information the British company Providend, which gives quick, small loans ? also want to join the bank super-league. The Kasa Krajowa SKOK (KK SKOK), associating all SKOK savings banks, has filed for a banking licence two years ago.
"We are still waiting for the approval of the Commission for Banking Supervision (KNB)," said Andrzej Dunajski, KK SKOK's spokesman.
The SKOKs need a bank, which would make them independent of agency of other financial institutions, it would simplify settling remittances, payment cards and would allow, for instance, offering mortgage loans.
In Provident's case, the strategic shift may be indispensable because banks are quickly entering the cash loans segment, in which the British firm has so far been the potentate. That is why Provident has recently launched a new brand Rapida ? a proposal for more affluent clients ? larger loans, granted after checking their credit standing. The change in the firm's strategy has been partially forced by the introduction of the anti-usury act, which still can be evaded due to imprecise regulations (for example by adding obligatory insurance, which are not subject to the act, yet increase the loans' costs). - German Advisors
The long-awaited German financial agent AWD, rival to Expander and Open Finance, will son start operating on the Polish market. According to unofficial information, the delay in AWD's entry is the result of problems with employee training. Market observers indicate that the company should move into the Polish market during a period of boom on the stock exchange as its functioning is based on the sales of investment products.
Small, and so far rather invisible players, are also spreading their wings. Sygma Bank, offering installment loans, cash loans and credit cards for trade chains is currently choosing a media house for long-term cooperation. The company is getting prepared to a launch of a large advertising campaign. It is also intensively looking for employees.
Lower-income clients are becoming more and more attractive for financial institutions. That is why Lukas Bank has followers. Fortis Bank, which targeted wealthier Poles, has recently prepared an offer for less affluent clients.
Another player will appear on the corporate loan market. According to unofficial information, Fundusz Mikro (FM), specialising in granting loans to small companies, wants to establish a bank. If it realises its plans, it will be the first bank servicing micro-firms. The representatives of FM do not comment on the issue, yet do not deny it either.
There are currently 55 banks and 600 cooperative banks in Poland. Poles are one of the least "banked" societies in the region. Research conducted on BACA's order proved that only 48 percent of Poles has a bank account. For comparison, in Slovenia the relation works out at 89 percent, in Serbia and Montenegro at 60 percent, while in Austria at as much as 98 percent. The new players have large potential to fill. - There Is Still Market Space
Blazej Lepczynski from the Gdansk Institute for Market Economics (IBnGR) says that there is still space for further loan institutions and banks on the Polish market. "The potential for growth is especially high in the retail segment, where you can gain high margins with low risk ? much lower than in the corporate sector. The group of small entrepreneurs still remains unattended ? the offer directed at them is very meagre. The private banking segment is more saturated, but if new market players start off with attractive products and modern services, there is still a chance to succeed: it is estimated the market will grow at a rate of 15 percent annually," said Blazej Lepczynski. - Skilled Financial Advisors Worth Their Weight in Gold
A report prepared by PricewaterhouseCoopers proved that as much as 65 percent of managers working in financial institutions believes that a well-trained employee is able to incline clients to deposit their savings at a given company the most effectively.
Polish bankers are also aware of the fact. That is why they are spending more and more money on employee training and recruitment of people who will attract new clients. They want to compete with financial advisors such as Expander or Open Finance.
The BRE Bank group is a good example. It set up MultiBank and the Internet mBank for individual clients a few year ago. The group's CEO, Slawomir Lachowski, has recently decided to make another investment. Last months the first branches of emFinanse have started functioning. The consultants employed there are to advise clients on loans, insurance and ? in the future ? on investment. "We are cooperating with five banks and two insurance companies. We have 100 consultants right now. Our target employment is 400 people," said Irena Swiatkowska from emFinanse.
It is possible that mBank will also have its own consultants. "We are thinking of employing people, who would be able to advise clients how to invest money. We currently have 180,000 clients, of which 20,000 use the eMakler brokerage service," said Krzysztof Tworus, mBank's sales director.
mBank might take advantage of experience gained by comdirect ? a German e-bank, which similarly to BRE Bank belongs to Commerzbank. comdirect cooperates with 118 advisors in 13 large cities. "Clients do need advice, a talk with the bank's employee. Our idea to form a special network proved to be great," said Andre Carls, comdirect's head.
ING Bank Slaski, Raiffeisen Bank, Bank BPH or BZWBK put a lot effort in employee training. "The times when the teller only accepted and paid out cash are over. He should also offer our services. If he is talking to a regular client, he must know what to offer, what the client really needs," said Marek Wiza, head of BZWBK's branch in Legnica.
Employees at ING Bank Slaski are taking part in special training at least once a month. The process is to improve the quality of client service. "The level of satisfaction depends on how the clients are treated, whether the bank's employees are able to advice them," said Andrzej Sowa, head of the individual client department at ING Bank Slaski.
In its report on financial institutions, PricewaterhouseCoopers indicated that rivalry in the field of client's service quality will intensify even more.
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