When implementing digital services, developing digital products and working with customer experience, the OTP Bank team correlates its approaches with 4 aspects of customer values. This was stated by Oleg Klymenko, Member of the Management Board of OTP Bank responsible for retail business development, during the conference DIGITALIZATION BANKING: the next stage – 2024, organized by the International Financial Club BANKIR.
“OTP Bank is working to improve customer satisfaction in four aspects: functional, emotional, life-change, and social. Most of the competition in banking digital services takes place at the first level – functional. But when you have an operational base, you can start working with emotions,” he said.
According to the banker, the Bank’s Information Center uses AI technologies to analyze customer emotions. “We distinguish 8 different emotions, and when a customer calls, we track their mood by the timbre of their voice. This is necessary for the manager to understand the interlocutor as correctly as possible, because where there is human-to-human interaction, sometimes there can be misunderstandings. Instead, artificial intelligence allows the operator to better navigate the situation,” emphasized Mr. Klymenko.
Life-change, according to the banker, helps customers learn how to use new products that improve their living standards. “One such example is the online purchase of government bonds in the OTP Bank UA app. This is the most convenient and comfortable way to get acquainted with this instrument of investing in government bonds,” emphasized O. Klymenko.
Accordingly, the life-change level allows customers to move to the social level. “OTP Bank cooperates with the prosthetics center Superhumans Center. To raise funds, we held two charity auctions, one of which was fully implemented in the app. It’s like a game, because each auction contains a game element combined with a social mission,” he said.
According to internal research, the NPS level at OTP Bank increased by 8% in 2023 and amounted to 58%. 93% of the surveyed customers are satisfied with the work of the Information Center operators, and 97% with the work of the branch employees.
As a reminder, the charity Christmas auction held in the OTP Bank UA app raised UAH 5.8 million. All the funds were transferred to the Superhumans Center to provide prosthetics to Ukrainians.
OTP Bank intends to become a hub for the distribution of grants from international financial partners and access to preferential lending programs for business. This was stated by Volodymyr Mudryi, Chairman of the Board of OTP Bank, at the conference “Finance for Business in Time of War” organized by the European Business Association and the Independent Association of Banks of Ukraine with the support of international donors – the USAID Project “Investing for Business Resilience” and the IFC Project “Asset Based Finance”, implemented in partnership with the State Secretariat for Economic Affairs of Switzerland (SECO).
“OTP Bank plans to become a hub for international grants for business, remaining a reliable partner for international financial institutions that play a crucial role in the resumption of lending. USAID, IFC, and EBRD have enormous capabilities and significant capacity. And we need to tell entrepreneurs about this as much as possible,” said Mr. Mudryi.
During the conference, V. Mudry called on the banking sector, international partners and the state to engage in an active dialogue on the implementation of joint projects to revive lending.
“If you look at the statistics, since July 2023, the loan portfolio of banks has been constantly growing. But we also know that a huge part of this growth is provided by government programs of subsidized loans “5-7-9%,” the banker emphasized.
In his opinion, the macro stability ensured by the NBU, the predictability of the exchange rate, inflation, GDP growth and bank liquidity encourage us to move to a new stage of cooperation for the development of the economy. “Our goal is to work out new approaches to further development of lending, financing and co-financing of entrepreneurs. And we cannot do it without direct dialog with business,” summarized V. Mudryi.
As a reminder, OTP Bank is already implementing a number of projects with international organizations. In particular, a grant program with the U.S. Agency for International Development USAID, under which it provides targeted financing to small and medium-sized businesses to replenish working capital. It also offers investment loans to SMEs with a possibility of reimbursement of up to 20% of the funds received under the program with the European Bank for Reconstruction and Development (EBRD). OTP Bank cooperates with the International Finance Corporation IFC under the Risk Sharing Program agreement to provide financial support to enterprises in key sectors of the Ukrainian economy, especially in the agricultural sector and women-owned businesses.
The total amount of taxes to be paid by OTP Bank in 2023 is UAH 4.8 billion.
The largest part is income tax – UAH 3.7 billion. The amount of military duty for 2023 is UAH 32.6 million. VAT, local taxes, non-resident tax, personal income tax, unified social tax, and unified social tax make up the rest of the total amount of payments by OTP Bank.
We would like to remind you that OTP Bank was ranked third in terms of capital adequacy according to the results of the stability assessment conducted by the National Bank of Ukraine. Thus, according to the asset quality ratio (AQR), the core capital adequacy ratio (N3) of OTP Bank amounted to UAH 7 billion 234 million, or 19.09%, with the required level of 7%.
Regulatory capital (N2) at OTP Bank amounted to UAH 12 billion 315 million. Its adequacy ratio is 32.5% with the required level of 10%.
The total amount of funds transferred by OTP Bank to the Superhumans Center for Prosthetics and Rehabilitation amounted to almost UAH 27 million.
Recently, the Bank has completed a charity Christmas auction held in the OTP Bank UA app, which featured iconic lots from prominent personalities: Valeriy Zaluzhnyi, Kyrylo Budanov, First Lady of Ukraine Olena Zelenska, billionaire philanthropist Howard Buffett, as well as famous athletes, actors, artists, etc. In total, there were 37 lots. The amount of money raised during the auction is UAH 5.8 million. Of this amount, UAH 2.9 million were direct donations from customers who made transfers in the app to help the Superhumans Center.
“This is the second major charity auction we have held to raise funds for prosthetics for Ukrainians. Our clients actively joined the initiative, and we are very grateful to them for that. We would also like to thank everyone who donated items for sale. Thanks to them and their willingness to support, Ukrainians who have been injured in the hostilities are receiving treatment and rehabilitation,” said Volodymyr Mudryi, CEO of OTP Bank.
“For the sake of help, we all united together: customers and employees of the bank, famous people and opinion leaders for a worthy cause. We are proud to be able to help Ukrainians, such as Vyacheslav, who worked as a freight forwarder before the full-scale war. Now Viacheslav is undergoing rehabilitation, getting used to using prosthetic legs and preparing for prosthetic arms,” emphasized Lesia Syrota, team leader of the OTP Bank Helps Ukraine charity project, Director of Retail Sales and Network Management Department of OTP Bank.
She said that the Bank had implemented a charity auction in the app for the first time, and the option of direct donations from customers was added for the first time. “In the future, we will offer no less interesting solutions to attract even more people to make contributions to support the Unconquered,” noted Ms. Syrota.
As a reminder, on the occasion of the Independence Day of Ukraine in 2023, OTP Bank also held a charity auction, during which it raised more than UAH 3 million. Another UAH 5 million was transferred by the Bank to create an educational center on the basis of the Superhumans Center to train prosthetists, who are sorely lacking in Ukraine.
In addition, OTP Bank transfers UAH 1 million or more to the Superhumans Center on a monthly basis. Thus, the total amount of assistance has already reached almost UAH 27 million.
OTP Bank uses the latest technologies for the development of factoring services, which allows to significantly speed up work processes and provide financing to customers faster. This was stated by Lina Zaika, Head of Factoring Finance Department of OTP Bank, during the round table discussion “How factoring can support business development during the war” organized by the Financial Club.
According to her, the Bank has switched to full electronic document management: from signing relevant agreements and executing documents on assignment of the right of monetary claim to compiling registers and storing loan files. “We are actively using new technologies, including robots, artificial intelligence and all possible means that help, for example, in verifying supporting documents for loan applications and speed up work processes. We are developing in such a way that our clients can exchange not only electronic documents online, but also receive all the necessary information from the Bank,” said Ms. Zaika.
Factoring financing for small and medium-sized enterprises (SMEs) is an affordable and convenient product. Factoring allows you to get working capital for your business immediately after the delivery of goods, without waiting for the end of the deferred payment period under the contract with the buyer. “This type of financing is especially relevant for small companies with limited assets due to the absence of the need to provide collateral, as well as a reduction in the interest burden for them,” she added.
This instrument of bank financing was supported by the state in the form of the “Affordable Factoring” program, which operates within the framework of the state business support “Affordable Loans 5-7-9%” to provide working capital for SMEs.
OTP Bank was one of the first to join the implementation of the “Affordable Factoring” program. “The bank is already considering several limits and plans to sign the first factoring agreements under the 5-7-9 program in the near future,” said the Head of Factoring Finance Department.
About the state program “Affordable Factoring” (data from the Ministry of Finance). Financial support for business entities under factoring agreements provides for compensation of the interest rate at the level of up to 13% per annum. The authorized factor will provide factoring to a business entity in the amount of up to 95% of its receivables, but the amount of financing cannot exceed UAH 150 million, including funds received under the programs “Affordable Loans 5-7-9%” and “Affordable Financial Leasing 5-7-9%”. The program is open to SMEs resident in Ukraine that supply goods manufactured by Ukrainian producers on a deferred payment basis, whose ultimate beneficial owners (controllers) are individuals resident in Ukraine and agricultural producers.
OTP Bank offers small and medium-sized businesses loans for the purchase of equipment with the possibility of reimbursement of part of the costs financed by the bank. Such loans are provided as part of the EBRD’s SME Competitiveness Program in the Eastern Partnership countries.
According to Natalia Kondratchuk, Director of Corporate Finance at OTP Bank: “The purpose of the program is to develop lending aimed at purchasing energy-efficient machinery and equipment by micro, small and medium-sized enterprises and investing in energy-saving technologies. In particular, such financing is intended to meet the needs of local agricultural producers to upgrade their agricultural machinery fleet with products of well-known global brands. In doing so, the borrower will be able to claim compensation for part of the costs financed by the bank’s credit facilities.”
The amount of compensation depends on the type of assets acquired and can reach 20% of the loan proceeds. The reimbursement will be made in euros, approximately within a month after the borrower has documented the intended use of the funds and the EBRD has verified the documents.
The average amount of loans under the program is expected to be the hryvnia equivalent of EUR 300 thousand, but the amount of each loan is determined by the details of the investment project, which must be acceptable to the EBRD. The minimum loan term is 24 months and the maximum is 60 months. The loan is secured by a pledge of the purchased equipment, a financial guarantee of the borrower’s owners and additional collateral if necessary. The loan agreement is implemented under the EBRD’s risk-sharing program, so the project to be financed must also meet its criteria.
OTP Bank offers loans with such unique cost compensation to its clients with no more than 249 employees and annual revenues not exceeding the equivalent of EUR 50 million or the currency of the annual balance sheet not exceeding the equivalent of EUR 43 million in UAH equivalent.
The borrower company must have been operating in the Ukrainian market for at least 3 years and meet other requirements set by OTP Bank and the EBRD, including a positive credit history.
