How neobanks develop abroad and in Russia

According to a study by consulting company Accenture, about 30% of bank customers or insurance companies would go to Google, Amazon or Facebook for service if these companies provided this opportunity.

The convenience of a new-generation bank lies in the interface, which is easy to use on mobile devices, support service, which does not require a physical visit to a bank branch at the other end of the city, and clear tariffs. All this is a time saver.

In the early 1990s, with the advent of online banking systems, so-called online banks appeared, many under the control of traditional banking structures. At first, a number of banks offered only a savings online account with higher interest rates than conventional banks, since the absence of branches allows them to be very economical. Since the mid-2000s, online and telephone banking has become the backbone of retail banking services, and most banks have taken this into account by incorporating such online accounts into their main products, simultaneously changing or reducing their branch network.
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The first banks 2.0

One of the first full-featured digital banks was First Direct , which launched telephone banking in the UK in 1989. The bank was the first to apply the concept of working without branches, serving customers around the clock using a call center. By May 1991, 100,000 clients used the bank’s services, while today the bank serves 1.3 million clients. First Direct is a member of HSBC Bank plc. Since 1995, the bank has been making a profit every year and enjoys a good reputation from customers.

The development and commercialization of the Internet in the early 1990s were the biggest drivers for creating fully digital banks. As the Internet became widely available, traditional banks sought to reduce operating expenses by offering Internet banking services to customers. At the same time, only Internet banks or “virtual banks” appeared.

Egg Internet Bank was launched in the UK in 1998. Here, customers could manage their accounts using a call center or via the Internet. The service gained popularity and soon the bank had over 2 million customers.

In 2008, the management of the bank took a number of actions that caused a reaction from the Financial Conduct Authority of the United Kingdom. Later, the bank was sold in parts: a credit card portfolio bought Barclaycard, and savings accounts and a mortgage portfolio went to the Yorkshire Building Society , which subsequently received all the other Egg customer accounts. After the sale of its assets, Egg Banking remained in the ownership of Citigroup, and was later renamed Canada Square Operations Limited.

European Nebank Success Examples

Atom Bank from the UK received a license and began working in October 2016. In a very short period of time - from the moment of its official launch until December 2016, Atom attracted £ 110 million in deposits. The bank allows you to remotely open deposits and arrange loans. Also, using the Atom application, you can get a mortgage. The bank relies on mobile apps, offering input using face and voice recognition.

Number26 from Germany, launched in early 2015, by the end of June 2016 attracted more than 200 thousand customers in eight European countries. The bank offers remittances, investments and overdrafts. Until July 2016, the project worked with the partner financial organization Wirecard Bank, but then received its own license and began to work as an independent bank under the brand N26.

Examples of nebank in Russia

In 2006, businessman Oleg Tinkov created Russia's first remote bank, Tinkoff Credit Systems, which later changed its name to Tinkoff Bank. The main products of the bank are Tinkoff Platinum credit cards and Tinkoff Black debit cards. The latter, as of October 2016 , were released 1.5 million units since 2012. In addition to payment cards, the bank offers deposits and attracts mortgage products under an agent scheme. In total, the bank serves 5 million people.

Last year, the bank launched a marketplace , an updated website that offers both its own products and offers from other companies. In fact, the bank becomes a kind of financial supermarket, offering both its own and partner products, earning on commissions.

The holding company TCS Group Holding PLC includes its own company, Tinkoff Insurance, which, like a bank, sells products and resolves insurance issues remotely, without the use of offices. This is another difference of this bank from traditional structures - banks mainly cooperate with individual insurance companies and receive agency fees - here both the bank and the insurance are in the same group.

Now Tinkoff ranks 43rd in terms of net assets among Russian banks. The net profit of the parent company TCS Group Holding PLC according to IFRS for the first half of 2016 amounted to 4.4 billion rubles.

In 2013, Tinkoff Bank held an IPO. The initial public offering of bank shares on the London Stock Exchange was among the largest Russian transactions of the year according to Forbes . The bank was valued at $ 3.2 billion, totaling $ 1.087 billion.
According to Reuters , in the coming months, TCS Group Holding may hold a secondary placement of shares (SPO), and the volume of placement may reach 60-70 million US dollars.

In October 2016, Tinkoff Bank was recognized as the largest independent online bank in the world according to a study by the international consulting company Frost & Sullivan , and its mobile application for four years in a row becomes the winner of the rating of Deloitte - a large consulting and auditing company.

"The application has the most complete functionality and is the undisputed leader among mobile banks," the study notes.

Another bank that serves clients only remotely, Touch Bank. The online bank is a member of the international financial group OTP Group.

It operates from April 2015 under the license of OTP Bank, which occupies the 51st place by net assets as of December 2016. However, Touch Bank does not use promotion among OTP Bank clients in Russia, ways to attract users are advertising promotion and organic growth.

The main product is a bank card, on the basis of which a client can get a credit line, open a deposit and conduct banking operations, including foreign exchange. Additionally, the “ Cards in the card ” service is highlighted - up to five cards of any other banks can be connected to the main account, while the client can create in advance the categories of outlets when calculating with a card.

Earlier this month, the bank analyzed and published the performance of its work for the first operating year.

40% of Touch Bank customers make more than 20 purchases per month for the amount of about 33,000 rubles each. The average amount of one transaction is about 1 600 rubles. The ratio of POS transactions to cash withdrawals is 49% versus 51%, despite the fact that cash withdrawals on the card are free of charge. Although the loyalty program is biased towards cashless payment of clients, in which the client himself chooses a category where he can receive an increased cashback.

Holders of Touch Bank cards online are also actively opening deposits - as of December 2016, the average deposit here was more than 220,000 rubles, compared to 164,000 rubles in other banks .

The main indicators of Touch Bank at the end of 2016 are as follows :

• The customer base is more than 120,000 clients (a monthly increase of about 12,000 clients over the last three months).
• The volume of deposits and customer funds - more than 4 billion rubles.
• The volume of open credit lines - 2.5 billion rubles.

In 2013, the start-up bank “Rocketbank” earned, offering customers opening a debit card and managing accounts using only a mobile application (one literally: the application was released only for iOS, initially there was no version for Android, no Internet -banking. Now there is an application for iOS, Android and Windows Phone). Rocketbank began to work and aggressively promote itself in social networks. In contrast to the traditional bank approach to organizing the work of the support service (pattern answers in the official language), Rocketbank employees communicate with customers less formally and more benevolently.

First, the bank worked at the facilities of the Interkommerts Bank, which carried out the processing of payments, and after in 2016 a temporary administration was appointed to the Interkommerts Bank and the license was revoked, Rocketbank acquired and took over the servicing of Otkritie Bank. Rocketbank does not disclose its performance.

The year 2013 turned out to be a landmark year for launching new type of banks - startups that provide services under their own brand and do not have a banking license using the infrastructure of a partner bank. Instabank was launched in April 2013, a couple of months before Rocketbank. Then the bank launched money transfers on Facebook, won a trip to America and participated in the Mastercard accelerator program.

However, in April 2016, exactly three years after launch, the bank stopped serving customers. According to the founder, Roman Potemkin, the main reason for the closure is insufficient funding:

“Already a year after the launch, I realized that to scale a“ light bank ”we need not hundreds of thousands, as it seemed at the start, but tens of millions that are not available in every country at an early stage,” he told the media - “Develop an independent we didn’t manage the brand on the income from the transactional business. ”

Instabank transferred all clients to the Military-Industrial Bank system, on the basis of which the startup worked. There is no actual information about the indicators obtained over the three years of operation.

Similarly, Internet banks for individuals, in Russia there are Internet banks for entrepreneurs.

One of them is Modbank. The idea of ​​the project belongs to the former employees of Sberbank, and Regional Credit Bank acted as the main investor, on the basis of which the project began its work. The volume of investments amounted to 600 million rubles in 2014.

Modbank specializes in working with individual entrepreneurs and small businesses, not attracting and not working with individuals. The service provides the function of online consultation of an accountant, a lawyer and a business assistant in the chat. In addition to opening accounts, the bank offers merchant and internet acquiring.

Since 2014, banking services have been provided by OJSC CB Regional Credit. In 2016, Modbank absorbed the parent organization and received a banking license itself. Now, on January 1, 2017, the bank ranks 221 in terms of net assets.

There is another “digital bank” for entrepreneurs in Russia - “Tochka”. Tochka operates under the license of Financial Corporation Otkrytie Bank PJSC, which, as of December 1, ranks 5th in terms of net assets in Russia (this group also includes Rocketbank, which provides services to individuals only) . Full name - Branch Point of Public Joint-Stock Company Bank Otkritie Financial Corporation. The branch, according to the official position , is a separate division of Otkritie Financial Corporation PJSC, and implements the tasks of the latter. The branch is not a legal entity and conducts business on behalf of Otkrytie FC Bank.

The bank began work in February 2015, its team consisted of former employees of Bank24.ru. In the “Point” to open an account there is no need to visit the offices - everything can be done using the Internet or the transfer of documents to the courier.

Features of the launch of a new generation of banks in Russia

Despite the relatively low competition of non-banks in the Russian market and their attractiveness to users, at present the implementation of such a project may face the following obstacles.

In the case of launching a digital bank as a digital “superstructure” on the basis of an existing financial institution, it is necessary to share income with the latter.

To launch a bank as an independent unit, one needs to go through the process of obtaining and paying a banking license (in Russia, this is 300 million rubles for registering a bank and 90 million rubles for a non-bank credit organization). In the future, it is necessary to monitor compliance with the standards established by the Central Bank of Russia.

In addition to the cost of a license, money is necessary for a neobanka all the time, and considerable ones. Thus, for example, Oleg Tinkov invested 70 million US dollars out of 80 million of his funds in the process of opening and launching Tinkoff Bank, while spending $ 20 million on the IT system, while the other banks' IT budget was about 3 million dollars.

In financial terms, Instabank's example is also indicative, when the owner invested money in a bank for three years, but later, without receiving positive indicators, he decided to close this business on his own. This can also be attributed to a long payback period: In 2014, Modbank was planning to break even after two years, to recoup the investments in three. So far, the bank is working "in minus"

A critical situation is also possible in which a partner bank can be taken away of a license, and then a startup will have to urgently change the service structure (see the situation with Rocketbank and Interkommerts Bank in January 2016).

Another factor that holds back the large-scale launch of digital banks in Russia is citizens' distrust of ordinary banks (over the past year alone, more than 100 credit organizations have been withdrawn from the market).

So far, the most sustainable model for a new-generation bank is the development “under the wing” of a large financial institution, as is the case with Tochka Bank and Roketbank, which operate within Otkritie Financial Corporation. Or it can be an expensive launch of a separate structure, as is the case with Tinkoff Bank, but in this situation a non-bank at an early stage of its development requires constant investments of large amounts of money.