Chairman of the Management Board of AS Expobank R. Legzdiņš: A crisis makes us think about the future
Rolands Legzdiņš, Chairman of the Management Board of AS Expobank
Economic recession, growing unemployment and insecurity about the future– many would like to put these aspects forward when asked about the last year’s developments and their assessment. However, this is not so unambiguous. A crisis does not give pleasure or make anyone happy, but at the same time a crisis makes us think, look for solutions, new ways of maintaining the rhythm of work and life.
We want to support active Latvian companies, which are willing to act
AS Expobank, similarly to many other companies, had to revise the goals set for 2020 in the middle of the year, because it was clear that COVID-19 and the uncertainly accompanying it will stay longer with us. However, we have no reason to say that the financial sector is in an equally unfavourable situation as in 2008–2010, where banks were those, which suffered the most. This is confirmed by current trends – namely, demand for funding for new projects in different business sectors is stable. Businessmen continue to appeal to us by asking to consider funding opportunities to develop new ideas, restructure production, expand or change in line with emerging market conditions. This is also reflected in the bank’s financial figures: we have increased our credit portfolio by more than 85% this year.
It is a pleasure that businessmen come to the bank full of enthusiasm and determination. This is good because businessmen understand that if they can convince potential donors that the business idea is viable, that a way of realising an intention and plans has been found – cooperation with the bank will be successful. We are and want to be with those businessmen who want to look for ways to do better, to do things differently, who are looking for funding to implement their business ideas. We are the ones who can help in raising funds and are prepared to support Latvian companies who go and do. There should be no situation where no financing is available to businesses. Yes, there may be stricter conditions for getting it, customers (including the reputation of potential customers) are more thoroughly evaluated, but if they meet all the demands and are able to defend their idea, there must be a possibility to implement this idea!
It should be noted that the Ministry of Finance recently presented the Financial Sector Development Plan for 2021–2023, which has three main blocks: “Access to funding and investment opportunities”, “Digitalisation and availability of innovative services” and “Sustainable finance”. In fact, the draft plan confirmed our bank’s current operating principles – support to investment, digitalisation and sustainability.
Technologies contribute to “merging” of services
Following the “overhaul” of the financial sector, banks are paying much more attention to evaluating customers even before starting cooperation. This requires additional resources and, of course, costs as well as some endurance and patience on the part of customers. The crisis makes adjustments to people’s habits, income of many people reduces. These and other factors also make the financial sector think how to balance expenditure and revenue. It does not matter whether you have 100 or 100,000 customers – reliability, control and other requirements are the same for all banks and must be fulfilled. If it is not possible to cover costs with own resources, other solutions, such as mergers, will have to be sought.
Changes in the regulation of the non-banking financial sector will present many new challenges for this part of the financial sector. It won't be a surprise if companies in this sector merge not only with one another, but possibly also with banks.
In the last two years the development of technological solutions has been one of lines of operation also for AS Expobank. Not only automation of bank’s internal processes and efficiency building, but also attracting and serving new customers, opening entirely new lines of business and improving existing customer service. Although due to COVID-19, the presentation of some projects to customers and partners has been delayed, we are planning to make one of our new solutions public soon. In fact, we are also gradually “merging” with the FinTech sector, but we still remain a fully fledged bank with relevant quality, reliability and compliance standards.
Entering of FinTech solutions into our range of services is another way of supporting entrepreneurs and also individuals who think about the future after the pandemic, not by passively waiting but by actively acting.
Experts of the financial sector point out that the development of financial technologies has become an important global trend. Although in Latvia we have been more focused on the issues of putting things in order and compliance, we have every opportunity to win global positions and to be the drivers of progress in the financial technology sector, because the IT sector in Latvia is at a very high level and we are able to take decisions quickly and forward new ideas in the market.
Surely, there is no shortage of challenges in any sector of the economy. But what would life be without challenges?