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Where Do We Look for Credit Eldorado?

The new banking retail cycle starts. Has the financial retail field learned any lessons? Has the development strategy changed anyhow? How can we get closer to the customer?

Before 2008, the banking and financial retail business was intensely developing on the whole. First class subsidiaries were established in the main streets of the cities in all regions. The competition was often observed even in places without any customer market. The financial crisis put a period to this “armament race”. All financial experts are aware of the pre-crisis retail business development goal, i.e. polishing the fa?ade of a bank or other financial institution.

Now it’s 2011, not 2007, and the environment has changed. Strategic investors don’t line up to buy financial assets in Ukraine. What do we have to do in this situation? We need to run real business with tangible financial results. Requests for this development option will be still relevant for a long time. Therefore, the present financial sector of Ukraine has a chance to create a normal business and work not for the illusory capitalization boosting, but to form a positive cash flow.

I believe that many colleagues have learnt good lessons and are asking themselves a lot of questions. There is an ocean of questions. Where do we need to head for? How do we have to develop? What client segments are most prospective ones? How do we organize priorities territorially: what cities should we develop primarily: million, hundred thousand cities, small towns?

My opinion is as follows: financial experts don’t disregard small towns anymore, and now it’s the right time to go there. Why? The answer is simple. Markets of small cities are partially busy. It’s often cheaper to get access to the larger part of population in these settlements than in big cities. That’s why I venture to forecast that a lot of companies will go there in the nearest future.

And here comes my warning: if there is no technology of retail business (first of all, I mean lending), if the market is shared between strong players, perhaps, it’s worthwhile looking for other markets (not necessarily financial ones) for the post-crisis expansion.