“Digital Disruptor”: Alior Bank’s Strategy 2017-2020
Greater customer experience thanks to a simple transparent product offer and new generation mobile and online solutions; strengthened position of the most innovative bank in the industry; return on equity at 14% for the shareholders: these are the priorities of Alior Bank’s strategy for 2017 – 2020. To address clients’ expectations, Alior Bank will reduce the product and service range by half, implement new digital solutions facilitating online sales of products and services, and invest additional PLN 400 million in IT and innovations to guide clients safely through the technological revolution in the banking industry. The Bank will maintain the highest interest margin in the industry at 4.5% and reduce the cost/income ratio to 39%.
The banking industry is going through a technological revolution as clients use products and processes over digital channels on a mass scale. With fewer visits to bank branches and fewer transactions made over the counter, financial operations go digital. Fin-techs increasingly expand into segments previously dominated exclusively by financial institutions.
To address these trends, Alior Bank launches a “Digital Disruptor” strategy for 2017-2020 to become even more innovative and customer-friendly and to strengthen its capital position. The strategy will be pursued to maintain the highest net interest margin in the industry (4.5%), reduce C/I to 39%, and provide the shareholders with return on equity rising from 8% in 2016 to 14% in 2020.
“To face the technological revolution in the banking industry, the changing expectations of clients, and the competition, Alior Bank must transform from a financial firm with a strong IT angle into a fin-tech with a banking licence. This way, Alior Bank will maintain customer satisfaction, improve effectiveness, continue dynamic business growth and provide a satisfying return on equity to the shareholders,” said Wojciech Sobieraj, CEO of Alior Bank.
“The strategy is the next step in building state-of-the-art, innovative offering, leveraging the potential of PZU Group. It sets ambitious but realistic goals for the Management Board. We will support Alior Bank in the implementation of the development plan,” said Michał Krupiński, CEO of PZU, Chairman of the Bank’s Supervisory Board.
The objective of Alior Bank is to remain a Polish innovation leader and to become a top five innovative bank in Europe. The Bank will invest another PLN 400 million in innovative technological projects in the next four years on top of the originally planned investment in IT development and system maintenance. The capex will be a driver of Alior Bank’s digital transformation as highly motivated employees guide individual and corporate customers through the technological revolution in the banking industry using an approach that is both friendly and secure for clients, profitable for the shareholders and inspiring for the employees.
Alior Bank will leverage state-of-the-art technologies to retain its competitive advantage, ensure customer satisfaction, and achieve ambitious financial targets. The Bank is working to implement face and voice biometrics and AI (artificial intelligence) applications. Having secured the regulator’s consent, Alior Bank will switch to cloud-based solutions. The Bank will use blockchain and Open-API banking / PSD2 tools to expand internationally in the future. Security of the new innovative technologies and services provided to clients over the digital channels will be a key priority of the Bank.
With automation, the Bank will further enhance its credit processes. Robots will be broadly used from operations through administration to support. The Bank made the first steps last year as it successfully implemented robots in debt enforcement (Dronn). Dronns use AI and biometrics to significantly reduce costs and greatly increase the amounts collected by the Bank.
In line with the strategy, Alior Bank implements a behavioural segmentation of individual clients and unlocks the potential of digital data digging. The Bank will focus on selected segments of modern banking clients to ensure 100% reach via the electronic channels including mobile.
To meet the expectations of individual clients, Alior Bank will largely simplify its product range to provide carefully selected innovative products and services which are simple, transparent, user-friendly and available end-to-end via online and mobile banking. As a result, the Bank will once again become the customer satisfaction leader.
In corporate banking, the Bank will improve its return on equity. The digitisation of processes for microfirms and small companies initiated in 2016 will continue. The Bank will remain a leader in the distribution of state and EU underwritten business loan financing programs. In the segment of mid-sized companies and corporations, Alior Bank will focus on the development of cash management products. The offer for business clients will expand to include new products from Alior Leasing. The company is expected to become a top five lessor in Poland in the next three years.
Alior Bank’s strategic goals include a major transition in sales and customer service towards the digital channels. All sale and post-sale processes will be available remotely and the digital channels will generate 40% of the total sales of the key products in 2020. The main pillars of the transformation will include new online and mobile banking systems available to clients as of May 2017. Notwithstanding the optimisation and digitisation of its distribution network, Alior Bank will remain one of the four biggest banks in the Polish industry.
In view of dynamic development of lending intermediaries, Alior Bank is planning to establish a broker firm offering a transparent broad range of selected proprietary and third-party products. It is the Bank’s ambition to be an online financial brokerage leader by 2020.
The key drivers of strategy implementation include the right organisational culture and employee engagement. With this in mind, Alior Bank promotes co-operation and client-centricity: as a target, 70 percent of the Bank’s employees will be front-liners. Alior Bank has the ambition to hire the top best-paid experts in finance and high tech.
ALR - Strategy 2017-2020
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To address these trends, Alior Bank launches a “Digital Disruptor” strategy for 2017-2020 to become even more innovative and customer-friendly and to strengthen its capital position. The strategy will be pursued to maintain the highest net interest margin in the industry (4.5%), reduce C/I to 39%, and provide the shareholders with return on equity rising from 8% in 2016 to 14% in 2020.
“To face the technological revolution in the banking industry, the changing expectations of clients, and the competition, Alior Bank must transform from a financial firm with a strong IT angle into a fin-tech with a banking licence. This way, Alior Bank will maintain customer satisfaction, improve effectiveness, continue dynamic business growth and provide a satisfying return on equity to the shareholders,” said Wojciech Sobieraj, CEO of Alior Bank.
“The strategy is the next step in building state-of-the-art, innovative offering, leveraging the potential of PZU Group. It sets ambitious but realistic goals for the Management Board. We will support Alior Bank in the implementation of the development plan,” said Michał Krupiński, CEO of PZU, Chairman of the Bank’s Supervisory Board.
- PLN 400 million of additional investment in IT and innovation
The objective of Alior Bank is to remain a Polish innovation leader and to become a top five innovative bank in Europe. The Bank will invest another PLN 400 million in innovative technological projects in the next four years on top of the originally planned investment in IT development and system maintenance. The capex will be a driver of Alior Bank’s digital transformation as highly motivated employees guide individual and corporate customers through the technological revolution in the banking industry using an approach that is both friendly and secure for clients, profitable for the shareholders and inspiring for the employees.
Alior Bank will leverage state-of-the-art technologies to retain its competitive advantage, ensure customer satisfaction, and achieve ambitious financial targets. The Bank is working to implement face and voice biometrics and AI (artificial intelligence) applications. Having secured the regulator’s consent, Alior Bank will switch to cloud-based solutions. The Bank will use blockchain and Open-API banking / PSD2 tools to expand internationally in the future. Security of the new innovative technologies and services provided to clients over the digital channels will be a key priority of the Bank.
With automation, the Bank will further enhance its credit processes. Robots will be broadly used from operations through administration to support. The Bank made the first steps last year as it successfully implemented robots in debt enforcement (Dronn). Dronns use AI and biometrics to significantly reduce costs and greatly increase the amounts collected by the Bank.
- Simplified product offer
In line with the strategy, Alior Bank implements a behavioural segmentation of individual clients and unlocks the potential of digital data digging. The Bank will focus on selected segments of modern banking clients to ensure 100% reach via the electronic channels including mobile.
To meet the expectations of individual clients, Alior Bank will largely simplify its product range to provide carefully selected innovative products and services which are simple, transparent, user-friendly and available end-to-end via online and mobile banking. As a result, the Bank will once again become the customer satisfaction leader.
In corporate banking, the Bank will improve its return on equity. The digitisation of processes for microfirms and small companies initiated in 2016 will continue. The Bank will remain a leader in the distribution of state and EU underwritten business loan financing programs. In the segment of mid-sized companies and corporations, Alior Bank will focus on the development of cash management products. The offer for business clients will expand to include new products from Alior Leasing. The company is expected to become a top five lessor in Poland in the next three years.
- Sales over mobile channels and optimisation of the branch network
Alior Bank’s strategic goals include a major transition in sales and customer service towards the digital channels. All sale and post-sale processes will be available remotely and the digital channels will generate 40% of the total sales of the key products in 2020. The main pillars of the transformation will include new online and mobile banking systems available to clients as of May 2017. Notwithstanding the optimisation and digitisation of its distribution network, Alior Bank will remain one of the four biggest banks in the Polish industry.
In view of dynamic development of lending intermediaries, Alior Bank is planning to establish a broker firm offering a transparent broad range of selected proprietary and third-party products. It is the Bank’s ambition to be an online financial brokerage leader by 2020.
- A motivated team implements the strategy
The key drivers of strategy implementation include the right organisational culture and employee engagement. With this in mind, Alior Bank promotes co-operation and client-centricity: as a target, 70 percent of the Bank’s employees will be front-liners. Alior Bank has the ambition to hire the top best-paid experts in finance and high tech.
ALR - Strategy 2017-2020
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