Clients' education level, the cost of risk and liquidity management – main issues raised by bankers

The clients’ often poor financial education, the need to separate client portfolios and the risk cost transfer – these were the most debated problems during an event dedicated to the consumer finance segment, organised by the Romanian Banking Institute and by Roland Berger consultancy company.

Roland Berger rep used the occasion to present a study indicating the European market trend addressing this segment: consolidation or a change in the business model. Hendrik Bremer, Roland Berger consultancy partner, used the example of two Polish firms, which managed to successfully adapt their business to the new conditions.

„Take as example Eurobank (owned by Societe Generale – n.m.D.P) and Lucas Bank (operated by Credit Agricole – n.m.DP). Eurobank started to develop saving products and then it switched to crediting and it also added additional channels for sales. Lukas focused on POS sales and then it aimed to attract deposits. Most of the products and distribution structures took the same direction. I believe that in East Europe will assist a consolidation process. The strong players will become even stronger”, Bremer explained to bankers.

Celentem general manager Daniel Boaje admitted that the battle for clients wil push consumer finance firms to change the business model, stating that the moment’s biggest challenges are the level of debt, the risk cost transfer and the liquidity management. „We need to develop the business model. We feel the need to separate the portfolio of clients”, Boaje explained.

The problem of clients portfolio segmentation was tackled by Raiffeisen Bank rep Stelian Stanga. „Banks talk increasingly about segmentation. 80% of the incomes are secured by 20% of the clients and, in this situation, one obviously needs to take care of this 20%, to offer them quality services, and here I mean pricing. I believe here is where the next battle will take place – the clients retention methods. Whoever finds the best solution wins”, Stanga opinionated.

Gabriel Cretu from OPT Bank pleaded for a better financial education. „The bank clients need be educated and explained what a 30 years credit us. We focus on teaching them how to make a buffer equivalent of six months worth of rates. We stepped over the slogan ‘If you deposit a leu today, maybe tomorrow it will multiply”, Cretu concluded.