INTERNET-BANKING: A NEW WAY TO DEVELOPMENT

arminfo
2008-09-17 14:03:00

Interview by Lilit Aslanyan, ArmInfo news agency, Sept 17 2008

The improved and modified version of the client-bank system,
Internet-banking, though yet modest in Armenia, is already urging the
local market players to appear with original initiatives. One of the
biggest banks of the country, HSBC Bank Armenia, is planning to launch
Internet-banking and to offer new services via this system. Chief
Executive Officer of HSBC Bank Armenia Tim Slater has told an ArmInfo
correspondent about the new projects of his bank.

Mr. Slater, crediting via internet-banking is one of the latest
novelties in the world. How are you planning to implement this project
in Armenia?

Initially, we are planning to launch internet-banking and
telephone-banking systems as additional channels to our branches and
ATMs. In order to bring in internet-baking here we will have to do
full computer system upgrade.

This will definitely be done this year. For this purpose, we may
use HSBC IT programmers from India, Hong Kong, Canada. We may get
internet-banking at the end of this year or at the beginning of the
next year. Total investment will be about $2mln.

We have also set up an IT regional development center here. We have
recruited six IT programmers and we have a foreign trainer. He is
training them a new language. These six people will be a resource for
all C IS countries; because they speak Russian, they will be able to
do IT work for all our banks in the CIS: HSBC Ukraine, HSBC Kazakhstan,
HSBC Georgia, HSBC Russia.

Once we set this service working I am sure it will expand later.

Do you have any projections, will internet-banking allow attracting
more customers?

Yes, definitely. At the moment, we have 4,097 corporate customers and
57,770 personal customers. The internet services provided by other
banks are not as complete as the one we will offer. Our customers will
be able to make international payments overseas, to other banks. I
think we will be able to offer good service to Diaspora Armenians. We
have HSBC branches in LA, Boston, Paris, Marseilles, Beirut, we will
have one in Russia by the end of this year, next year in Ukraine. We
have a branch network which is better able to serve Diaspora than
any other bank in Armenia. I am hopeful there will be new customers.

In early 2008 HSBC Bank Armenia announced that in May it would open
a back-office. When specifically is the official opening?

We expect it to be late this month. The main reason for the delay was
that we were waiting for our shareholders to visit, hopefully, some
senior government officials as well, particularly, Vache Manoukian. We
also wanted to make sure the center was working efficiently.

How much have you invested in the back-office project and what are
your expectations?

A It was in total $5.5mln. What we are trying to do by opening
this center is to improve efficiencies by centralization. When you
centralize processes, you get efficiencies. We take processes out
of branches and do them in one place. When you centralize, you could
review the processes you are doing, reengineer them, make them more
efficient or automate them.

We don’t want to use our branches to do back-office processes, we
want them to serve our customers.

Besides, our branches are located in central streets, in expensive
retail space. We are going to use expensive space for looking for our
customers. As regards back-office processes, we can do it much more
cheaply. So, this is also more efficient use of expensive space. We
don’t know how much we will save yet but I have challenged our chief
operating officer to save $1mln a year.

The back-office will be situated at 12 Malkhassyan Str.

HSBC Bank Armenia said it was going to enlarge its presence in the
marzes by opening mini-branches. What plans do you have here?

At the moment, we have nine branches in Yerevan. We expect the opening
of a Nork Massive branch this month and a branch in Abovyan later
this year as well. We are also considering opening another branch in
a suburb of Yerevan.

We are doing some marketing studies at the moment in Vanadzor to see
if we can make profit there.

What loan portfolio do you expect t o have this year?

We are planning to increase it by 42% to $240mln. In late June
2008 it was $210mln (3rd place in Armenia) or 12% of the total
loan portfolio of the Armenian banking sector. We have the biggest
mortgage loan portfolio: in Jan-June 2008 it totaled $66.2mln. In
order to further improve our performance on the mortgage market we
are looking to extending the repayment period to 20 years. We are
waiting for proposals from our head office in London and we hope we
will get them this week.

Thank you.