The FINANCIAL — SmartPay, eMoney Connect, cash withdrawal by electronic ID (eID) Service, discount site Cheap.ge, PAY cards, new mobile banking concept, first Georgian Facebook store PayStore, MyPhone’s new application – this is but a partial list of the many innovative services and products provided by Liberty Bank. “We do not have a monopoly on creative thinking and innovations,” Lado Gurgenidze, CEO of Liberty Bank, the third largest Georgian bank, told The FINANCIAL.
“Innovation is not an end in itself. Innovation is the simplest way of earning more money by the easiest way of offering more services to more clients, which they need and appreciate so much that they are ready to pay the appropriate fee,” said Gurgenidze.
Gurgenidze said that in some cases, the demand for these innovative products definitely existed before their arrival. “The definition of innovation itself is that sometimes you create such a thing which consumers might need, or already really need, or will need, but do not know it yet,” he explained.
By total assets, the market share of Liberty Bank has doubled in the last three years. It was 3.5% and now it is 7%. Liberty Bank’s cards ecosystem currently incorporates: 1.7 million Visa and MasterCard cards; 480,000 Pay Cards. The Bank has 315 ATMs and plans to add an additional 30 by the end of 2013. The number of POS terminals is 11,708. From January-May 2013 turnover within POS terminals amounted to GEL 23.8 million. This showed 20% growth in comparison with last year.
Smartivi Mobile App was launched in 2012 and is now used by more than 6,000 applicants.
“Liberty Bank has no way out. We serve 1.5 million customers, a third of the population. No matter how many service centres we build or how many ATMs we install, if we do not develop electronic channels, serving 1.5 to 2 million customers adequately in a modern world will not be possible. Several years ago it was impossible in Georgia but since then the rapid development of broadband has taken place. Together with the development of 3G internet, implementing new services has become possible,” said Gurgenidze.
Gurgenidze said that calling Liberty Bank the bank of pensioners is stereotyping. “We serve 1.5 million customers with deposits amounting to GEL 247 million. We love each of our customers. So this was our main driver for these innovative projects. It would be utopian to rely only on the current number of branches and wait for consumers to choose to visit us. The Georgian banking sector is very developed. The level of competition is high. So it is our goal to reach out to and contact various client segments. We had a meeting with the students at Free University. To my question: “What number use our affiliated discount website ‘swoop’?” 90% proclaimed they do, and over 30% of them use eMoney. This is a segment which we would not reach if it were not for our innovative services.”
By total assets, our market share has doubled in the last three years. It was 3.5% and now it is 7%. However, Gurgenidze still considers his achievements to be a very small share. “We have over 300,000 unique visitors on our websites. We email over a million offers to our customers monthly. All of this is the result of electronic channels. Ubiquity is our defining attribute.”
After a decade spent at several investment banks in Eastern Europe and London Gurgenidze returned to Georgia following the Rose Revolution and spearheaded, as Executive Chairman and CEO, the turnaround of Bank of Georgia. In November 2007 Gurgenidze was appointed Prime Minister of Georgia and served a one-year term until October 2008.
In September 2009, Gurgenidze established, together with Dinu Patriciu, Liberty Investments, an investment company focusing on financial services institutions in frontier markets with low corruption, low taxes and open economies. In the same month, Liberty Investments announced the acquisition of 91.2% equity interest in Liberty Bank, which has the largest branch network and client base in Georgia, serving some 1.5 million clients.
In September 2009, based on the decision of the President and the Government of Rwanda, Gurgenidze was appointed Chairman of the Supervisory Board of the largest bank in Rwanda, Bank of Kigali.
“When I started managing Bank of Georgia ten years ago the market was very undeveloped. Now it is more replete, dynamic and competitive. The ratio of bank assets to country’s GDP was 15% in 2004 and now it is 55%. So, reaching the same results as we had with Bank of Georgia was not scheduled and was impossible. Over three years Liberty Bank tripled its market share. At this stage reaching more than 10% would not be realistic,” said Gurgenidze.
“I remain at Liberty Bank as Chairman of the Supervisory Board. I am the second largest shareholder of the Bank and this project is very important to me. I spend over 20-25% of my time at venture projects. More is not required. The team has grown. They are very talented. The Bank is quite different now to how it was four years ago. I am actively involved in leading strategy,” he said.
The world is big, Georgia is small, and so Liberty Bank implements interesting projects from every point, even from Africa. The project of Pay Express which is service points in huge villages has been copied from the Agency Banking model, popular in East Africa, India, Brazil and elsewhere. “So, we are not copying projects only from Europe or the USA. I spent more of my time in Africa. We plan to launch two new projects. It is a market with a population of a billion so it has big potential. The current situation there reminds me of Georgia in 2004-2005,” said Gurgenidze.
“We still have to travel a long way. The banking sector today is not what it was ten years ago, luckily. It is much more developed than in our neighbour countries. But it is just the beginning of the game. Intense growth and development await the banking sector,” Gurgenidze told The FINANCIAL.
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