Nikolay Lazarov [NL]: COVID-19 has affected significantly consumer behavior – staying at home and strong priority of online activities, digital sales, online services. This situation presents an opportunity for customers to explore a new lifestyle, as the lines between personal and work life are blurred. McKinsey and PwC reports that appx. 40 percent of customers who previously mainly used in-person channels to contact brands for support have now switched to digital channels as their main channel. Therefore, COVID-19 is forcing all sectors to reconsider their business models, their structure and their routes to market. The retail banks made transformation of its business model from traditional banking to a contemporary customer-oriented financial servicing, providing agile solutions. The banks also working on to keep their brick-and-mortar distribution channels and at the same time to provide eligible scope of digital financial services. At the end of the day usage of digital channels has accelerated rapidly, and is set to continue, even once the COVID-19 situation has eased.
What has changed? Many things have changed. Definitely, Covid-19 was an ultimate storm that we hadn’t expected. No one expected it. No one had previewed it in the forecast and the budget. The speed and prediction time lapse was very unusual for us. We at Postbank invested no more than a week, and we had to change our whole strategy for the next year. Definitely, these were quite tough exercises but at the end of the day, it has been successful as we turn back and see the bank’s result in this same pandemic year. We think that we gained from the market due to our strategy, due to the fact that we were very fast in making some decisions, and due to the fact that we had started preparing our digital strategy long before Covid-19. Technology is not a thing which starts now. The process started 50-60 years ago with the first ATMs, the first automated machines, and it is a steady process which has not been initiated by Covid. Those bank institutions who were prepared to take the decision to switch to a remote contact, remote interaction with the client are taking the advantage now.
Covid-19 was a totally new phenomenon for us, but more or less, due to our previous preparation we were ready to introduce immediately some of the solutions we had been preparing.
SP: You had high flexibility to react. You had had a plan B.
NL: Exactly. We had a plan B, and what we saw was that both we and our clients in the first month of Covid lockdown were shocked. All of us. And if we divide clients in two groups, the first client type had been heavily involved in brick-and-mortar channels, and the second client type was more involved through digital channels. The former – the traditional – client started to shift. We see something interesting. Pre-Covid, the majority of clients had preferred to dig information online and to buy offline. This is the traditional way. Due to Covid this trend has shifted. The client who is making his/her research online, also started buying online. This has been the major shift in the industry. The traditional client who has always been very much involved into the traditional way of buying, s/he has just postponed the purchase. But the client who were in the middle, they shifted. It was very important at this point to have a ready channel. This was the major difference.