“Within the morning, I’ve an thought. Throughout the day, we talk about it with colleagues, and we are able to begin implementing it the following day. Daily I am going dwelling happy as a result of I do know I’m working for outcomes.” Just a few executives can afford the luxurious of such flexibility
and effectivity. However for Robert Schoepf, Chairman of the Board of LPB Financial institution, that is an on a regular basis actuality and a vital issue, due to which he works with wholesome pleasure and pleasure.
We talked to him about why small banks have a big aggressive benefit – supplied they’ve chosen an appropriate enterprise mannequin – and what’s taking place in the whole Latvian banking sector.
Simply after the pandemic, there appeared to be nothing extra to be afraid of. Nevertheless, 2022 confirmed that there is also different shocks that might considerably have an effect on the worldwide market: Russia’s assault on Ukraine, the power disaster, and inflation development.
How have these occasions affected LPB Financial institution operations?
“Final 12 months was powerful. The struggle affected the European financial system and world processes typically. All macroeconomic components have additionally influenced our work. On account of Russia’s invasion of Ukraine, the Financial institution reassessed its enterprise areas, thus giving up half
of the enterprise, leading to a decline in revenue indicators. Nevertheless, due to the skilled efficiency of the LPB Financial institution group, we ended the 12 months with rising revenue indicators. Sure, the revenue earned is greater than half of what it was in 2021, however the Financial institution
continues to work steadily and with out losses. We efficiently handle more difficult intervals due to a enterprise mannequin that differs from different Latvian banks.
Fifteen years in the past, after I first visited Latvia, many banks primarily profited from non-resident enterprise. LPB Financial institution has all the time been on a unique wavelength. Since 2010 we’ve got targeted on e-commerce, and I can proudly declare that we’ve got grow to be the primary Fintech
financial institution in Latvia. In fact, we additionally signify the standard financial institution enterprise: on a regular basis companies for authorized and bodily individuals, credit score applications, and cost playing cards. If we take a look at turnover and revenue, virtually half is Fintech, and the opposite half is conventional banking
exercise. Monetary applied sciences are our area of interest, which units us other than different Latvian banks. We have now labored on this discipline for a very long time and do it professionally.
The common portrait of our service shopper is a licensed worldwide cost group to whom we provide Banking as a Service (BaaS) companies. We additionally present companies for on-line shops. It’s important to say that the big Latvian banks additionally
function within the e-commerce phase, however solely inside the nation’s borders. On the identical time, our companies are in excessive demand amongst numerous European firms. I’m satisfied that we’re distinctive within the Fintech discipline in Latvia.
When speaking concerning the improvement technique of small banks, how vital is it to seek out your distinctive area of interest? Does it stimulate profitable improvement or maintain you afloat?
Small banks should discover their area of interest. In the event that they do the identical factor as massive banks, there is no such thing as a future for such a enterprise. A number of banks have lately left the Latvian market as a result of their enterprise mannequin now not labored. This doesn’t occur to those that have
discovered their area of interest and differ from their rivals. The market all the time self-regulates.
Due to this fact, we or another small financial institution, ought to select a specific service or product, give attention to them, and carry out our work higher than massive banks. For us, it’s the discipline of e-commerce and Fintech. We have now discovered our area of interest, and we really feel very assured in it.
What else in addition to monetary applied sciences helps you stand out amongst different banks?
It could appear insignificant, however for those who come to us, you received’t need to take a quantity and wait in line. Then again, we are able to afford a person method to every shopper. This is applicable not solely to face-to-face service however to each stage of interplay with
the financial institution. Giant banks have well-developed procedures, protocols, and schemes for constructing cooperation – purchasers transfer by a bank-defined “hall.”
However this is applicable to in-person service on the financial institution and each stage of shopper interplay. For instance, we’ve got a platform for e-commerce purchasers. That is our improvement, which we began engaged on 13 years in the past and have been bettering and adapting to the
needs of our purchasers yearly since. It’s value highlighting and emphasizing three important components: a small however extremely skilled group, our improvement and our particular person method. The intersection of those components creates a aggressive benefit for
our financial institution. Shoppers respect that we are able to do what they want and what will increase their revenue, in addition to the velocity with which we implement their needs. Regardless of its huge sources, a big financial institution usually can’t afford the pliability and velocity we offer.
Let’s speak concerning the a part of our conventional banking, corresponding to lending. Every shopper has a person scenario, so we talk about every case individually and return to the shopper with a proposal tailored to their wants.
Doesn’t this contradict effectivity? There’s a pronounced development in direction of course of automation, particularly within the know-how firm atmosphere.
In precept, you might be proper, however so long as our purchasers need good service, we are going to proceed to make use of a person method as a result of the shopper’s want is our foremost factor. In fact, we are able to standardize particular processes, however it will primarily concern the technical
aspect, not customer support. If you happen to name us, you positively received’t run right into a chatbot. As a result of I’m deeply satisfied: that high-quality customer support can solely be supplied if there’s a pure individual in entrance of you who is aware of, hears, and understands you.
Let’s speak concerning the future. What are the financial institution’s additional improvement plans?
The market normally determines improvement vectors. We have now already taken an enormous step in direction of the European market and can proceed to take action, taking part in worldwide trade exhibitions to draw new purchasers. We’ll proceed to spend money on technological
improvement: the deliberate funding quantity for this 12 months is 1,300,000 euros. We’ll complement our IT division with proficient workers to extra successfully meet the wants of our financial institution’s purchasers.”
It doesn’t take a fortune teller to know that e-commerce and Fintech are the long run. Australian futurist Brett King wrote the ebook “Financial institution 3.0.: Why Banking Is No Longer Someplace You Go However One thing You Do.” Giant banks are lowering the variety of branches
and shedding workers as IT applied sciences are more and more coming into this discipline. This course of will certainly go on. In 1994, Invoice Gates stated, “We want banking capabilities, not banks.” For a while now, we’ve got noticed this prophecy coming true.
In 2018, Latvia was on the verge of being included in Moneyval’s “gray checklist,” which might have probably led to a downgrade of the nation’s monetary ranking. Though Latvia was omitted, its monetary status was considerably broken. How do
you at present assess Latvia’s picture in Europe?
Certainly, Latvia has a secure banking sector. In comparison with neighbouring Baltic international locations, the banking sector right here is extra developed. In fact, there’ll all the time be individuals or firms with prejudices about Latvia, however I’ve not encountered this.
Quite the opposite, we’re very selective regarding our purchasers. Out of 10 purchasers who come to us, we begin working solely with eight as a result of we wish to cooperate with clear and trendy companies oriented in direction of the long run. We aren’t all in favour of working
with those that have already been rejected in all places; we strongly oppose “gray” cash. We have now strict inside controls and AML/KYC procedures, so if we’re not sure concerning the transparency of somebody’s enterprise, this isn’t our shopper.
Latvia certainly had a not-so-good popularity previously. However it should be stated that the Latvian banking sector is now a lot more healthy and cleaner than many individuals’s notion of it. Some individuals know what occurred in Latvia 15 years in the past, however they should be taught
concerning the present scenario within the sector. Quite a bit has been performed to enhance the scenario, with the efforts of banks, the Regulator, the Central Financial institution, and the state. Bettering the trade is our frequent aim; we’re shifting in direction of it efficiently, and collectively
we are going to make sure that there are not any darkish spots on the map of the Latvian banking sector.
