Petia Dimitrova: “Innovations give us the necessary energy to change banking”

Petia Dimitrova

Interview with Petia Dimitrova, Chief Executive Officer and Chairperson of the Management Board of Postbank.

What qualities does a bank need in order to succeed in the swirling economic and social currents of today? How can it provide the best-possible service to its customers while meeting its responsibilities to society as a whole, and still meet its commercial goals? And what has changed with the pandemic? Petia Dimitrova, CEO of the award-winning Postbank, has a clear vision of the formula for success.

Postbank is celebrating its 30th anniversary in business. What would you say are the successes of which the company can be proudest in that time?

We are proud of all our successes and they are all special to us, since we achieved them together with our team. We have overcome the challenges and have managed to keep the trust of our customers, partners and international shareholders. For 30 years, Postbank has proven itself as one of the most successful banks in Bulgaria, a good partner, employer and a responsible company. This allowed us to be among the leaders in all segments we operate in – we rank third in terms of loan portfolio and deposit size, we are the fourth-largest bank in Bulgaria, with a market share of over 10%, with more than 200 branches across the country, and we have won numerous awards. We achieve these results with our hard work and by striving to constantly move forward together. It would be difficult to point out the most important successes, as they are all valuable for us. The merger of DZI Bank in 2007, the integration of the Alfa Bank branch in Bulgaria in 2016, as well as the successful acquisition of Piraeus Bank Bulgaria in a record short period of four months in 2019, are part of our bank’s history we are all proud of. For this, I would like to thank all the employees of Postbank, with whom we managed to achieve this remarkable business development and with whom we have proved to be a stable and innovative bank, working for our customers. Thanks also to the shareholders for their unconditional support as they boldly stand behind our growth plans, and to our customers for their esteem and trust.

You have said that well-run companies are used to tackling challenges but only the successful ones are prepared for them. What would you say were the key challenges of 2020, and how well prepared was Postbank to meet them? 

Challenges in our sector are a part of our everyday life and, to a great extent, we banks are used to overcoming them. Certainly 2020 was different for everyone, due to the COVID-19 pandemic. We learned to be swifter in implementing innovations in order to be of help to our customers and team, to be more responsible and to support common causes. We were well prepared in Postbank, since we started the digitalisation processes years ago with the aim of providing excellent customer experience, convenience and fast solutions, which were all extremely important in the new reality. This gave us an advantage and guaranteed peace of mind for both our team and our clients, who received the desired banking products as fast as possible. We managed to offer effective solutions when they were most necessary, and via the preferred communication channel of our customers. They can currently carry out almost all the important transactions remotely – from opening an account, through applying for and utilising a loan, to issuing credit and debit cards, remotely concluding an insurance and almost completely utilising a housing loan, thanks to the online housing lending centres, which are unique in the market.

One of the greatest investments and innovations we carried out at Postbank was our digital express banking zones, which were immediately recognised as a preferred alternative. Thanks to the intuitive devices in these zones, our customers can carry out by themselves, quickly and easily, a major part of main banking transactions. Digital zones are already operational in 32 branches in 15 towns across the country, with more locations soon to be opened and upgrades to the service to come. And now we are looking forward to something really exciting, because our efforts are focused on our most important product for 2021, which will start any moment – our new, revolutionary digital wallet. I am certain this will be a new, unique and flawless experience for customers looking for the best solution for managing their personal finances. Customers will, in practice, move the bank to their mobile phone. They will be able to add all their cards in their new wallet and the diverse set of functions will provide immediate and active access to their funds, which they will effectively manage 24/7.

One of the greatest investments and innovations we carried out at Postbank was our digital express banking zones, which were immediately recognised as a preferred alternative.

Another challenge was the introduction of fintech companies in the sector, which activated a healthy competition regime that also had its positive effects. It stimulates us to build on our achievements and offer even more valuable products and services. Fintech companies can certainly be our partners, and our experience shows that collaborations between both parties are possible and beneficial to companies and customers alike.

What is important now is how we will continue forward. I believe, this year, we can expect many banks to take advantage of their strategy of simplifying their business and rationalising their portfolios. Since the big ones keep getting bigger, “too big to fail” will switch to “too little to succeed”, due to the change in the environment.

What effect would you say that the pandemic has had on the shift towards service digitalisation in the banking sector? 

The pandemic proved to be a catalyst not only for digitalisation of services in the banking sector, but also as a stimulus for customers’ financial literacy, considering that it successfully transformed attitudes that under regular circumstances would have taken years to change. It accelerated the development of the sector and helped us reach a new level in communicating with our clients. It changed their service preferences for good – they increasingly want to manage their finances through mobile apps and digital wallets, and via online banking. I would say that we banks went through an accelerated course in digitalisation, which became the standard for consumers. We rethought our business models and made them more digital, and work processes were swiftly reorganised in order to guarantee the necessary speed and convenience, not only for our customers, but for our employees as well, whom we had to protect. I believe that the digital transformation is already a mandatory condition not only in our sector, but in all businesses, if they want to be competitive, and this is the direction that we will continue following.

Our efforts are currently aimed at developing our digital channels, but we also invest in our branch network, as there will always be customers who will prefer human contact and personal attention, a consultation and a face-to-face meeting with their private banker, alongside our well-developed digital services. This is why we offered unique digital self-service zones, where customers can easily and quickly carry out a major part of the main banking transactions themselves, but can also seek help should they need it. 

You are quoted as referring to the need for bolder reforms aimed at improving customer experience. Are there any areas that you consider to have particular potential in this regard?

Our customers want an individual approach and that has not changed – they want to have access to their funds anytime, anywhere, to receive individually developed offers and to feel special. And we strive every day to provide just that. As I already mentioned, more and more of them want to manage their financial life via digital services. But, even without COVID-19, they will still seek simpler, more direct and personalised products and services, giving them more added value. While we banks update our mobile apps, websites and other interfaces to provide more functionalities, we must not forget all this, guaranteeing that customer experience remains consistent and maintained during all these changes. Speed and security are only a part of the conditions for excellent customer experience. But consumers expect consultations and flexible solutions for their financial health and well-being, as well as speed. Neither they nor our partners would settle for less. I am happy that we did not deprive our clients of the most important aspect during this crisis – personal attention. We showed that, even from a distance, these processes can have a human face and that is at the heart of good customer experience.

I believe that digital transformation is already a mandatory condition not only in our sector, but in all businesses, if they want to be competitive, and this is the direction that we will continue following.

Postbank places innovation high in its approach to maintaining its position in the commercial environment. Could you give us some examples of how innovation has helped the company in this regard?

Innovations have always been a part of our development strategy, because they give us the necessary energy to change banking and implement new trends on the market. In terms of examples, I will name just a few that helped us maintain our leading positions on the market over the past challenging year and support our clients the way they expect their trusted financial partner to do. With our online housing lending centre, we used modern technologies to transfer the application and granting of housing loans in a digital environment, thus catering to consumers’ expectations to the maximum extent. Now our clients can carry out almost all the main banking transactions online – from applying for and utilising a loan, through remotely concluding an insurance to receiving credit and debit cards. We implemented the most modern and effective solution for managing communications with them, so that we could be even more helpful – one based on Salesforce, the leading cloud platform for managing customer relations. For our leadership and achievements in 2020, Postbank once again won the prestigious international award in the Best Retail Banks Category in the World Finance Banking Awards competition. This is the third award in a row for us, following the successes in 2018 and 2019. Our digital achievements were also highly esteemed by the prestigious World Finance Digital Banking Awards 2020 and we were awarded in the categories of Best Consumer Digital Banks, Bulgaria and Best Mobile Banking Apps, Bulgaria, which are important categories to us. In 2020, we also received the highest distinction of Bank of the Year, as well as the award in the Dynamic Development category of the annual bank awards of the Bank of the Year Association. All this leads us to believe we are moving fast enough and that our innovations are in the right direction.

What place do the Premium Banking centres have in the bank’s strategy for the future? 

Our Premium Banking specialist centres, which we opened at the beginning of the year for our highest segment of customers at the bank, are an extremely important part of our long-term strategy for complete renewal of our branch network. They combine high-tech design, luxury, a cosy, confidential environment and uncompromising service standards to create an exclusive customer experience. The conceptual solution of space in them develops the modern line of our existing digital high-tech offices. All the necessary details for satisfying the expectations of our clients are incorporated in the environment and fully reflect our vision for the future.

Does the innovative approach also have a place in the bank’s internal processes?

Of course. Remote access, phone- and videoconference calls became a part of the everyday home office model over the past year, and we had to find a way to keep the connection with the office alive and complete. We relied on innovations in communications with our team in order to manage our internal processes even more effectively. We are the first bank to implement and successfully use Digital Office – a mobile app for internal communication that literally brings the bank to the employee’s phone and, thanks to it, they can see all news, events and special offers in a matter of seconds, taking advantage of a new opportunity to remain connected. We were physically separated but remained together online. We also implemented one of the largest innovations in the sector, optimising 20 work processes in the Loan Administration Department, introducing Robotic Process Automation technologies, or the so-called software robots. Innovations are not the result of periodic or frequent efforts; they have to be a permanent process in the organisation. Even before the coronavirus, the need for innovations in the banking sector constantly grew. And today, creating an innovative DNA in a bank is related not only to promoting a culture of constant innovations, but also to the bank’s being able to continue operating in times of change.

Do you think it is more important to follow trends or to set them?

In our bank we have always strived to set trends, because we are not afraid of anything new or different. The skill of having an innovative attitude is of key importance for the success of any given company and I am happy that we have it. Thinking differently and creating your own innovation is a much greater advantage than having some technology or following the trends already set. The energy accumulated in 2020 can certainly be used to accelerate the banking sector’s development in numerous dimensions. The capability of managing these new processes through creating innovations that accelerate the overall process of change in banking and not following the already-set trends will set apart the institutions that will become more competitive in 2021 from the others. The world of banking was a fast-developing sector even before the pandemic, and its consequences made navigating in it even more challenging. Banks that manage to offer financial services in line with the way of life at the moment will be the successful ones. I am happy to work with a team of devoted experts who look boldly forward to new opportunities and create such for our clients.

Sustainability is very much at the forefront of business thinking these days, both in environmental and commercial terms. What does sustainability mean to you and how can it best be pursued?

Globally, consumers expect banks and financial institutions to work in a way that supports investments in the community, in social equality and ecological issues. If previously the list of expectations of customers toward their bank only included local branches, good interest rates on loans and excellent customer service, now the list is far more extensive and, other than providing an excellent digital experience, customers also find it very important for banks to demonstrate their commitment to sustainable banking, a socially responsible policy and corporate culture.

Those of us who have the attitude of sharing success and who rely on collaborating with consumers, employees, business partners and the community as a whole will create new development opportunities in a way that benefits all.

2021 will most probably be a turning point in sustainable lending, since central banks and regulatory authorities now acknowledge the severe macroeconomic consequences of unbounded climate change. We talk increasingly about green lending (green mortgages and deposits). We banks will support more companies with low, and fewer companies with high, ecological risk. An additional advantage in this aspect is the digital services with which we optimise resource use. Earlier this year, we offered our customers the unique-for-the-market metal credit card, Mastercard UNIVERSE – a product which is yet another important step in using less plastic in daily activities. Meanwhile, we will continue being active in the field of corporate social responsibility, because we believe that every business can find its personal cause and contribute to society by investing in and developing socially important projects. We recently started a project for creating a Green Outdoor Classroom, with which we joined the international climate-change-combatting initiative Priceless Planet. So in the long-term, banks cannot neglect green or sustainable practices.

What are your key approaches to ensuring stability and growth for the company? 

The main focus for us is developing the bank’s digital solutions as a part of our strategy to provide excellent customer experience for every consumer. Some of these include mobile banking, special digital zones for express banking, the EVA Postbank mobile app, offering connection to an expert from the bank in real time via the live chat function, as well as our revolutionary digital wallet. The success of the next generation of products and services will depend on our capability to improve customer experience with them. Those of us who have the attitude of sharing success and who rely on collaborating with consumers, employees, business partners and the community as a whole will create new development opportunities in a way that benefits all.

How do you know when you’re doing things right? 

We see it in our customers’ trust and our employees’ motivation as they continue offering different and innovative ideas for us to implement. Our customers expect us to be a better bank and that is the strategy we follow. Awards are also an indicator of our success. Postbank was awarded Bank of the Year precisely in the unusual and complicated 2020 and this is further evidence that we are moving in the right direction, as this success would not be possible without the efforts of our entire team. I am certain we will continue flying forward on the wings of success in the upcoming 30 years.

Executive profile

Petia Dimitrova

Petia Dimitrova is Chief Executive Officer and Chairperson of the Management Board of Postbank. Her professional career within the organisation started in 2003 as Chief Financial Officer of the eight subsidiaries of Eurobank EFG Group in Bulgaria. She became Procurator of Postbank in 2005. Mrs Dimitrova was appointed Executive Director and Member of the Management Board of DZI Bank in 2007. Following the legal merger of DZI Bank and Postbank, she became Executive Director and Member of the Management Board of the merged bank. In 2012, Petia Dimitrova was appointed Chief Executive Officer and Chairperson of the Management Board of Postbank. In less than three years under her management, in record time, the financial institution implemented two successful deals, acquiring and integrating the Bulgarian branch of Alpha Bank first, and then Piraeus Bank Bulgaria. These were yet another step in strengthening Postbank’s position as a systemic bank on the market and enhancing its role as a trendsetter and a leader in innovation.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.