The largest bank in the Czech market saw the coronavirus pandemic as an opportunity to test its flexibility. “Our advantage is that we operate internally and vis-à-vis customers as a digital bank, and we also have – thanks to strict regulation – reliable crisis mechanisms. Therefore, about two weeks before the government restrictions took effect, we activated the crisis team and switched most of the bank to ‘home office mode’, without any problems. We therefore quickly adapted to the new situation. Everyone knew what they had to do. We’ve given people the confidence and responsibility to make decisions independently,” recalls Tomáš Salomon, CEO of Česká spořitelna.
Thanks to this, the bank was able to offer customers loan repayment deferrals for an entire month before the government announced a repayment moratorium. Česká spořitelna arranged roughly half of the total deferred repayments even before the government approved the postponement. In addition, the bank’s executives discussed the final form and parameters of the moratorium with the Ministry of Finance. “We can see how important it is to have a dialogue between the government and the commercial sector,” notes Salomon.
During the COVID-19 crisis, Česká spořitelna closed about half of its 480 branches and introduced the necessary hygiene measures at those that remained open, including staff rotation. More than 1,500 employees stayed at home and attended to customers remotely. “It was quite a unique operation because people were used to personal contact at branches. Since we couldn’t meet the customers, as is our normal practice and tradition, we decided to be proactive in calling them. Not to try to sell them something, but to ask them how they were dealing with the situation. We also wanted to ask if they needed help with loan repayment deferral, digital banking or card payments, which were new things particularly for older clients,” notes Salomon. On average, bank staff hosted an average of 15,000 to 20,000 ‘tele-meetings’ every day. We can apply the laws of nature to describe our segment because any living organism wanting to survive must be prepared to adapt,” states the CEO.
„We try to help individuals do better. Following up on that, local communities, regions and eventually the whole country, including Spořitelna, will do better. A prospering bank depends on the prosperity of society and vice versa.“Tomáš Salomon, CEO of Česká spořitelna
In this spirit, the bank began changing its customer approach about two years ago. From a passive service which waits for specific customer requests during opening hours, it turned into a proactive service. “It’s no longer about deciding how much of something you want to sell and then looking in the database for ‘victims’. We want to be connected to our customers, we want to know what their plans are, and we want to be there for them, to make their dreams and wishes come true. The coronavirus crisis has reaffirmed that we’re on the right track,” asserts Salomon. So far, this service has targeted relatively affluent clients, but he explains that “democratizing” financial advice to the ordinary customer is ultimately more important for people with average or below-average incomes, adding that how these groups manage their finances has a much greater impact on their standard of living.
Recently, Česká spořitelna significantly simplified its price list, abolished dozens of fees and launched an online account with no conditions. The bank does not intend to make most services free, however. “I’m a little sceptical about free services because nothing is free, and it always raises the question of the business model behind it. Customers are and will be willing to pay for quality advice that’s provided transparently and adds value. We’ll prosper if we are able to offer such service and aren’t shy about stating what the service will cost,” asserts Salomon. At some branches, the bank changed the opening hours, bringing them forward to eight o’clock in the morning so that people could attend to important matters before going to work. The bank also concentrated more on servicing related to individual products.
Established in 1819, Erste Group was the first Austrian savings bank; Česká spořitelna was founded just six years later. It has been following people’s life circumstances for 200 years, and a member of Erste Group since 2000. “With statistical information, we can define probable scenarios and present customers with two or three options that would be the most suitable for them,” remarks the director, adding that customers have to trust the bank that their money is secure with it. After all, the volume of deposits surged during the pandemic. “My explanation is that in uncertain times, people put their money in safe havens, which they consider us to be,” asserts Salomon.
He notes that the bank’s corporate culture, long-term work based on values and the delegation of powers to branches are key aspects of Česká spořitelna’s relationship with its employees. For example, it was up to the individual branches to decide which customers to call in the coronavirus crisis. “Any drill and instruction from the top only has a short-term effect, and over time, as with any living organism, everything will return to natural behaviour,” says the CEO, repeating a favourite analogy. “It has to come from the employees themselves. They must enjoy going to work, look forward to working with colleagues and like their customers... For instance, if they see someone turning up before the branch is due to open, they won’t keep the person waiting but open the doors just for them, providing the customer with a pleasant surprise,” concludes Salomon.