Center-invest Bank’s Board of Directors has approved the bank’s Strategy for 2019-2021 "ESG Digitalization of Center-invest Bank’s Ecosystem".
The new Strategy takes into account the global Sustainable Development Goals, the national development goals of the Russian Federation, the development strategies of the regions in which the bank operates (the Rostov region, Krasnodar krai, Stavropol krai, the Volgograd region and the Nizhny Novgorod region), and the Bank of Russia’s programmes to develop the financial market, technologies, and financial inclusion. Center-invest Bank has already become a pilot, benchmark, case study and success story for the implementation of these strategies and programmes.
Against a background of unsustainable growth in the global economy (+3.9% a year) and recovery growth in the Russian economy (+1.5-2% a year), the regions in which the bank operates are demonstrating higher growth rates (3-4% a year) and anti-crisis dynamics (compared to the average rates for Russia, production is growing more quickly, while producers’ prices are rising more slowly). The anti-crisis dynamics result from the competitive advantages of these regions: geopolitical position, climate, diversified economy, tradition of enterprise, advantages in lagging (reduced risks and costs of innovation), and creative solutions to local challenges for subsequent replication.
At a time of transformations, growth in the bank’s ecosystem will be driven by innovative solutions for retail customers and small business, with a focus on the new generation of entrepreneurs. Rather than immediate profits, ESG banking (environmental, social, governance) focuses on long-term development in the interests of current and future generations of customers, investors, employees, partners and regulators.
"With digitalization, using quantitative evaluations, we can consider a larger number of factors, alternatives and risks, and standardise best practice for replication in the bank’s ecosystem," says Chairman of Center-invest Bank’s Board of Directors, Dr Vasily Vysokov. "The emergent effect of ESG digitalization is the standardisation, automation and replication of ESG banking solutions, and the increased accessibility of financial technologies."
The Strategy’s financial indicators are calculated using a recurrent model with due regard for risks and the requirements of Russian and international standards, international agreements, and ESG reporting. The chosen method ensures a balance between assets, liabilities, liquidity, risks and profitability. It also ensures that the bank’s operations have a positive impact on the income of the population (34% of the bank’s income), partners and suppliers (17% of income), employees and the state (20%), and shareholders (29%). The Strategy provides for the reproduction of financial, productive, intellectual, human and social capital, and also natural resources, for the period 2019-2021. It also considers the external environment, risks, and position of the bank after 2021. Stress testing of the Strategy showed that Center-invest Bank will remain at the forefront of trends and ready to meet new challenges.
The digitalization of Center-invest Bank’s ecosystem encompasses its operational system and its relations with the regulator, government bodies and customers. For each of these areas, the bank ensures that it meets fundamental security requirements for data and payments, provides leadership in introducing new programmes and platforms (co-innovation partner of SAP and BPM Online), participates in pilot projects for government services and marketplaces, and introduces best practice in working with big data and artificial intelligence models.
"In the next two to three years, making structural changes to retail products and services for small business, and digitalizing them, will be a priority for the bank, at the same time as sustainable growth in key financial indicators," says Yuri Bogdanov, Center-invest Bank’s Director of Innovation. "At present we receive 75% of retail loan applications online, and 95% of our business customers use our online business banking service. As part of our new strategy, we want to increase these rates to almost 100%."
The bank actively and successfully participates in pilot projects to develop interfaces for working with the Bank of Russia (including its secure online channel, Marketplace, and pledged assets), the Russian Pension Fund (data for assessing creditworthiness risks), and the National Payment Card System (Mir Accept, MirPay, data about purchases). It also provides integration with government services and the Interagency Electronic Interaction System (fiscal data, electronic reporting). These areas of digitalization will ensure more reliable and effective interactions with customers.
For the benefit of its retail customers, the bank introduced mobile banking for Android and iOS. It is also participating in the Bank of Russia’s Marketplace project; developing a hub for online loan applications; introducing virtual reality property viewings for mortgage customers; introducing loan offers via remote services; using data held by the Government Services portal to identify customers, launching a biometric customer identification system; replicating the introduction of non-financial services for Mir cards (campus, school and transport cards, and other payment devices); and expanding the digitalization of its sales channels.
For its business customers, the bank is introducing analysis of cash register transactions (pilot project with the Mir national payment card system); pay-in at ATMs; Internet and mobile banking with multi-level antifraud technology (SafeTouch) to protect against remote attacks; and online accounts for merchants using the bank’s acquiring services.
Center-invest Bank’s Strategy is already working, in particular, its educational projects (Enterprise for All, university scholarship competition, financial literacy centres, and the "Me and the World in 2030″ competition), non-financial services (training, consultancy, mentoring), and finance for youth, women’s and social enterprise, energy efficiency, and housing and utilities infrastructure (21 000 projects; RUB17.8bn).
The bank’s cooperation with higher education institutions and international organisations allows it to systematise this work in the form of an Accelerator, which is intended to multiply experience. It is not a place, but a range of functions performed together with customers and partners, and it is not a single project, but a creative environment in the transformation economy.
Center-invest Bank was the first to enter the international social investment market: in 2017 the Swiss fund ResponsAbility Investments AG became one of our shareholders; Vigeo Eiris ranked us 17th out of 76 European banks; we maintained our Ba3 (stable) rating from Moody’s Investors Service; and we received an ACRA А(RU) national rating, outlook stable.
Center-invest Bank has operated in the Russian financial market for over 25 years. This demonstrates the viability of its business model: Center-invest WAS, IS AND WILL BE THE BEST! This is not an advertising slogan, but a reflection of practical work in the best regions, with the best shareholders and partners (international development institutions and banks), the best customers, the best employees, and the best new entrepreneurs, who the bank nurtures. All these results allow Center-invest Bank to strengthen its positions in the global social investments market.