At the beginning of 2018, the Bank published its Strategy for 2018−2020, followed by 2019 amendments extending the planning horizon up until 2022 and outlining new strategic priorities. However, the original strategy’s period of action drew to a close, prompting the Bank to look quite ahead once again in 2020.
On December 24, 2020 the Supervisory Board of Bank Saint Petersburg approved the Bank’s Strategy for 2021–2023.
The Bank has decided to adopt a new concise form for its new Strategy, namely, a one-page strategy. It allows for capturing a better focus on the essence of optimal long-term development. The Strategy 2021−2023 is available at the Bank's website.
The new Strategy provides for five key strategic priorities, outlining the rationale of their adoption as well as formulating key appropriate metrics:
This priority was initially set in 2019 when the Bank stated EXIM as a strategic direction of development. The Bank boasts advanced EXIM operations infrastructure with limited impact from geopolitics on its operations due to the status of a privately-owned bank. Coupled with existing vast expertise in EXIM, as well as a significant customer base amassed in the regions of operation, the Bank sets out goals to increase the active customer base by 25%, with the volume of transactions growing by 20%. The Bank targets doubling EXIM operations revenues in three years by actively utilizing its customer base and offering the best products and services. Having said that, the quality of services provided and customer satisfaction importance is also recognized, with the fourth metric having to do with maintaining the already high level of Net Promoter Score (NPS) among EXIM customers.
Focus on SME business is a reflection of the goals to expand in Moscow and to increase the volumes of transaction business. One of the pillars for this priority is still a “blue ocean” of the Moscow market, where taking even a percent of the market would translate into significant transaction revenues growth for the Bank as a whole. Also, the Bank has already been operating on the Moscow market for several years, and has garnered a strong reputation, building a solid name for itself. So one of the metrics used here is active SME customers fivefold growth in Moscow, driving the growth of a total SME customer base by 85% over three years. Tripling the revenues in SME business in the Moscow segment will drive a 25% increase in total SME segment revenues. The Bank also sets a 5% annual ARPU (Average Revenue Per User) increase target.
Large corporate business is a key BS & PL growth driver for the Bank, therefore its expansion is essential for the overall development of the Bank. During the last few years, we managed to find a golden mean between growth, moderate risk appetite, and profitability in this segment. The Bank is benefiting from strong brand recognition and a successful story of relations with large business ─ coupled with great Moscow market potential it allows for ambitious growth targets in Moscow. We are looking to realize Moscow potential by increasing its loan portfolio by 45%, resulting in an overall increase of 30% across the Bank, in addition to which the Bank also targets doubling its customer base in Moscow, with a 30% overall increase in the large corporates.
The Bank realizes that nowadays acquisition costs of new customers grow ever higher. Customer retention and efficient cross-sales are a much cheaper option. In these terms, the Bank has been developing AI & ML-based big data analytics systems, allowing for better churn rate management and individual offering. Lending is still the main driver for ARPU growth, while loan products’ penetration potential in the existing base remains high. The Bank has adopted the following metrics: ARPU growth by 15% and increasing payroll customers loan penetration from the current 22% to 35%.
This priority is based on the Bank’s desire to create a possibility of mass customer acquisition and service exclusively in remote channels. The current combined offline-online model is effective in the regions of presence but limits the expansion. And physical expansion seems to be expensive and out-of-date. Since this approach is new and challenging for us, in 2021 we are going to define the methodology for accurate measurements of success. However, we aim to guarantee the availability of all mass services completely in online format, which will facilitate new customers’ acquisition through remote channels enabling digital revenues growth.
We remain a bank of two capitals, while creating the basis for the use of remote channels to unlock the new regions.
Talking about mass corporates, we aim to attract all segments of SME business, supporting our transactional model. Lending will be used as leverage for the growth of this model and is not a focus in and of itself. Payroll account customers also remain a focus for our acquisition. On the retail side, we aim for product-based acquisition primarily of middle-aged and older individuals with some substantial income. We also aim to expand our business partner collaborations (construction companies, insurance agencies, car dealerships), which would allow us another channel for new customer acquisition.
Continuing from the results of digital transformation and going one step deeper, we, feeling comfortable in a transformed digital environment, have formulated our new strategic direction for digital development as a “data-driven organization”. Having acquired experience in big data analytics, we are expanding our use of machine learning and artificial intelligence-based macro and risk modeling, also allowing for customer base management, as well as smart pricing and offering, making the tailored individual offers available even to mass customers.
We also recognize that all of the above is not possible without having highly qualified and motivated employees engaged in collaboration on every level and efficient cross-functional teams.