Feb 13, 2008: Local Bank Urges Clients To Use Internet Banking

By Yekaterina Dranitsyna

Staff Writer

Bank St. Petersburg has launched an Internet banking system that managers expect will reduce operational expenses and attract new clients. So far, registering and using the system have been provided for free. However, only 10,000 clients regularly use Internet banking, which has been available since November last year.

“We expect to attract new clients with this Internet banking system - people looking for a way to make various sorts of payments without paying burdensome commissions or standing in lines,” Pavel Philimonenok, deputy chairman of the board of Bank St. Petersburg, said Monday at a press conference.

Bank St. Petersburg serves 560,000 individual clients. By the end of the year Philimonenok expects 50,000 clients to be using Internet banking and up to 200,000 people by 2010.

Internet banking allows clients instant access to all their accounts with the bank and provides them with a history of transactions performed and debt repayments for any period in the past, as well as enabling them to perform new transactions and file loan applications.

“Do not assume that this option will be popular among young people only. Internet banking is a simple solution that can be used by people of any age,” said Indrek Neivelt, chairman of the advisory board of Bank St. Petersburg.

In Scandinavian countries over 50 percent of transactions are made via the Internet, Neivelt indicated, and only five percent at banks. Cash machines and terminals service nine percent of transactions, and direct debit payments account for 30 percent.

“In a few years we expect half of all transactions to be made via the Internet and 5-10 percent in actual banks. Up to 70 percent of loan applications will be filed via the web,” Neivelt said.

By introducing Internet banking, the bank will reduce the cost of processing a client’s request from $2 to $0.1, Neivelt said. “Needless to say, it will be more convenient for the client,” he added.

Bank St. Petersburg has invested 20 million rubles ($0.81 million) into Internet banking and has also redesigned its web site in cooperation with Bank’s Soft System (BSS) software development company, CSBI software integrator and Molinos marketing agency.

“Several hundred thousand people could use the system simultaneously, and they would not experience any breakdown or slowing of speed. We have made the systems capable of dealing with larger numbers of users than even the bank’s marketing department expects,” said Alexander Monosov of BSS.

A number of software companies offer Internet banking solutions for banks, including R-Style Softlab, ASoft, Bifit and Diasoft.

“Internet banking is one of the most advanced bank services. Recently there has been considerable progress in this area. According to statistics, over 80 percent of bank transactions could be done via Internet banking systems,” said a report issued by BusinessVision.

By the end of 2005, over 350 banks offered Internet banking (about 30 percent of Russian banks), according to BusinessVision.

“The fewer clients come to the bank itself and the more transactions clients make remotely, the smaller the bank’s services expenses are,” Fort-Ross agency cited Vladimir Petrov, vice-president of Convers Group as saying at the “Business Solution: Banking” conference.

“Any bank that developed through acquisitions from a small retail financial institution into a larger bank will be faced with this problem when it has to provide services across Russia,” Petrov said.

From March, Bank St. Petersburg will launch an advertisement campaign in the media and will promote Internet banking among its existing clients.

“We will introduce commissions later. But these commissions will still be much smaller than the commissions charged for processing the same requests at the bank,” Philimonenok said.