Leader. Interview by Ömer Tetik, CEO, BT, for BIZ magazine

Interview given by Ömer Tetik, CEO, BT for BIZ magazine, published in October 2019.

When you are the largest bank in Romania, the plans are as good as it gets. Banca Transilvania is counting on digitalization, and Ömer Tetik says that NEO, the bank's Internet Banking and Mobile Banking platform, will revolutionize banking. The plans for the next period are not necessarily about acquisitions and integrations, but the BT CEO says that if opportunities arise, they will be in the market.

• You've reported the best net gain for the first half of the last 10 years. How did you come to this result?

The financial results at the end of the semester or at the end of the year are more significant, because the clients and investors are also looking at, but they do not only reflect the activity in that semester. The results of 2019 are the result of 25 years of BT and in this journey we had the courage to buy portfolios, integrate banks, enter new areas without having a parent bank behind us. The results come from the trust of our customers. The fact that we are in the area of SMEs, entrepreneurship, and 65-70% of Romania's GDP is generated by SMEs shows that we have positioned ourselves in a correct area for the future of the country and helps us deliver good results. Six years ago, when I came to BT, and I was talking to my colleagues for the first time, regardless of the department, they were talking about clients and the bank's network. This is actually the DNA of the bank – this good relationship with the clients and our positioning have brought us good results.

• You said that the results in S1 are preparing the ground for the big plans in the coming period.

We have created an image of buyers in the banking system. We generate capital without going to ask for shareholders and if there are opportunities, we will be in the market. But big plans aren't necessarily about acquisitions and integrations. A big bank is forced to have big plans, because whatever we do we think about the customers. When you have 3 million customers, over a quarter of the daily payments in Romania, 20-30% market share in POS and the simple continuity of the activity itself is a big effort. On the other hand, we want to continue to invest in digitalization. Initially there was talk of alternative channels and banks were thinking of saving instead of opening branches, then there was talk of multichannel banking, and now we are talking about omnichannel banking. We make great efforts and investments, to be present for our clients anywhere anytime. If they want to come to the branch, we have the network ready, if they want to come only to the ATM, we have some of the latest generation, if they want mobile banking, we are on the smartphone. Investments in digitalization are very complex, any application, any platform has other costs behind it – for operational risk, for reputational risk, for cyber security. And, when we talk about a bank that has assumed the leading position in the market, our clients have shown us many times that they trust us, they love us, they support us and we must always come back to them with news. We're not implementing an app and that's it, the next 10 years we're going to benefit from it. Already Apple Pay is old news, we're seeing tens of thousands of transactions every day, customers now want something else. We have switched to cash withdrawals with the phone and we are expanding online services for entrepreneurs by launching the option of opening and managing 100% online the share capital account. It is a premiere in Romania and it is a good thing for our clients, for entrepreneurs who want to start an SRL or SRL-D type business so that the start stage is as easy as possible.

"Big plans aren't necessarily about acquisitions and integrations. A big bank is forced to have big plans."

• You have been very active in the area of digitalization lately. What's next?

Digitalization is a journey, we learn by doing things, developing applications. The main focus is NEO. We have launched the Beta version and we are starting to enroll clients, every week we will add new customers. We are confident that NEO will revolutionize digital banking in Romania, but beyond NEO there are many activities to improve flows and processes. We think about how we could make things simpler, without papers, but with good risk control. Customers no longer have patience with banks, because we are a kind of utility for them and they want us to deliver as soon as possible. The goal of the client is not to take a mortgage, but to buy a house. The goal is not to have a credit card, but to take a vacation or a Christmas gift. And then we have to deliver faster, safer and for a much larger volume. We are talking about millions of active customers and their trust is very important, because it is hard to earn and lose very easily. We've built this trusty story in 25 years, but everything can be lost in 20 minutes, as Warren Buffett said. We want to continue to invest in trust and relationship with our customers.

• How has the asset tax influenced BT's activity and development plans?

Initially, the reaction was also emotional, because we were not informed, we were not ready and we were in the process of discussing and approving the bank's budgets and strategy for the next few years. We suddenly woke up at the end of the year with abrupt and unclear information – and there were a lot of interpretations right from the first draft – and we didn't know exactly what the impact would be, how much the charge would be. I am glad that after that all the partners returned to the debates, to a more productive dialogue, but we lost two months of the year, and this also means two months of loss of the country's GDP. After the final form of the tax we decided not to have an approach like deceleration of funding. I said we have to be with the clients. Moving forward, we still have a lot of things to do in BT and for our clients. And we returned to the initial lending budget, partly also the investment budget, with a greater focus on streamlining and reducing costs.

• What does this efficiency of the activity involve?

We are a bank that uses quite a lot of RPA (robotic process automation) solutions. We try not only to robotize the processes, but also to make them simpler. We grew the bank without increasing the network, we invested in technology. We are very attentive to our customers and what they want, we do not make products if they are not suitable for our customers or for Romania and this "house cleaning", so to speak, has helped us to be more efficient. In 5-6 years, we have tripled the bank's assets without aggressively increasing the cost base with the network or the number of employees.

• How do you expect the lending activity to evolve by the end of the year? Do you get to 8%, to get the exemption from the asset tax?

Even though we lost the first two months of the year with the debates about the tax on bank assets, we had good results in the first semester. From now on we will have even better figures, but we want to stay in what we have budgeted – a credit increase of 7%. Sure, if opportunities arise and there is demand, we will grow more, but this difference between 7 and 8% is not big. What I want to emphasize is that we will not accelerate lending and we will not increase our appetite for risk just to benefit from tax exemption. If we look at the market, there are high chances that we or other banks will reach this figure. We are glad that in the area of SMALL COMPANIES or micro-companies we have a higher demand. They also helped the government programs, in which we are one of the main banks. It is a better growth, along with the increase in consumer credit and will help us in the coming years. Maybe this is how we will bring people back to Romania, if we show them that they can do business here as well.

• How did bancpost integration go?

On the operational integration side we already had Volksbank experience, we have experienced teams. But in the case of Bancpost we are talking about one of the first banks in Romania, with a very large history, known in the market, and in integration we focused on the fact that we did not want to stop or endanger the activity of our clients. We've seen mistakes in the market, when integration took years. We tried to be fair, but in such changes there are always emotions and it is hard to find a pragmatic answer to an emotional request. I think we were fair to the people and the customers are satisfied, starting with January 3rd they were able to use the services and products of Banca Transilvania. The integration was not a luck, it was a well thought out project. Customers want stability, acquisitions are not a concern for customers, but they are important for those who come through the purchased bank. Increasing the number of customers, the relationship part becomes a challenge, but we also find alternative solutions, we try to move the transactional part to gadgets, to digitalization, and the relationship part, where the client needs advice, discussions or a confirmation, we want to be with them with the network and with our people. From the very beginning I said that we did not make acquisitions to be the largest bank.

Customers and market analysis show that we are the favorite bank of the Romanians and we want to maintain this, we want to come up with news, with pleasant surprises. Whatever we do we think of customers. It is pragmatic to ask yourself if your customers are happy and they remain to do banking with you. So are the happy shareholders, because you can deliver good results. There is no sector of activity where customers are unhappy, they pay high prices and the business always goes well.

• The banking sector is highly regulated, and bankers are often considered scortosi. Do you think there is a need for more relaxation, for a humanization of speech?

We feel that we are more in the human banking area, but in Romania I don't think we have arrogant bankers anymore. I've seen other banks take quite unconventional steps in communication. But it's not enough. So far we have been reactive – we have tried to justify ourselves using banking terminology. In the case of the asset tax, I asked my friends what they understood about what the banks communicated individually and I saw that it was often a failure. What we were saying was true, but as I am not an agronomist engineer or a doctor and I do not understand exactly what those in the field are talking about, we tried to justify certain decisions with a rather difficult terminology. I think this is already starting to change, with the help of RAB and NBR, but we have a lot to do to explain better. And not only in times of crisis, because this will also increase financial inclusion. That's how customers understand certain things, why we have certain costs. I used an example that people understood easily – if we compare the price of wheat with the price of bread, the margin is huge. But until you make flour, you lose more of it when packing, then you deliver it, you prepare the oven, you deliver the bread. And there are many costs, you have to ensure the quality of the products and the hygiene of the products. I think we manage to communicate better and better, now we are glad that we also have a direct communication – in social media we are one of the most active banks in Romania and even in Europe.

• What do you teach your children when it comes to money and saving?

My children are more exposed to discussions about the financial sector, even if I avoid talking about money. I would talk to them more about the meaning of life and about things that can't be bought or make them happy. Our eldest son was already in an entrepreneurship camp and he also learned about risks, investments, costs. He worked for three days and made apricot and strawberry jam, sold it and said it honors us. When he saw that all the money went on a lunch table, he told me that life is hard and he understands my problems. I asked him about the entrepreneurship camp and he told me that he learned who is an employee, who is a client, entrepreneur, investor. He told me that he would like to be an entrepreneur too and, after three seconds of silence, he added: "Daddy, I'm sorry you're hired". I told him that we all have our role in various companies and I am pleased with what I do. Things have changed so much since we were children. Without making a comparison about how much money we had, we weren't exposed to so much information, products and services at once. We want them to enjoy every pair of shoes, every game or toy, without just purchasing or possession.