Herman Gref: ‘People think that when they buy something in cash, they remain in shadows — it is an illusion’
The opening of the second forum of innovative financial technologies Finopolis-2016 took place on 13 October in the Korston hotel shopping and entertainment complex. The correspondent of Realnoe Vremya along with Elvira Nabiullina and Herman Gref became acquainted with the innovative products presented by already established in the market companies, as well as young start-ups. Also, they discussed the future of Russian banking sphere: the invited experts forecasted a consolidation of the Central Bank with the Ministry of Telecom, a scale reduction of the banks to the size of a device or a chip and a serious reduction due to the introduction of new technologies. Additionally, the head of Sberbank explained why the anonymity in cash utilization is an illusion, and what's wrong with foreign banking services.
Communication with a robot, promising start-ups and banking eco-system
This year, Finnopolis, the number of participants of which has risen 1.5 times, traditionally placed on its site an extensive exhibition of innovative technologies. They all were presented to the head of the Central Bank Elvira Nabiullina, the chairperson of the Board of Sberbank of Russia Herman Gref, the President of Tatarstan Rustam Minnikhanov and other high-ranking guests. The products were presented by such giants as Microsoft, IBM, Master Card, 1C, QIWI. Among the bank there were Sberbank, the Bank of Russia, Ak Bars Bank, Tatfondbank, and many others.
The chairperson of Ak Bars Bank Zufar Garaev presented the delegation four innovative products, developed in their own laboratory: the first prepaid card 'Mir' (World) in Russia in partnership with the National payment card system (NPCS), a digital investment consultant AK Bars Consultant, the mobile digital bank of own design under the brand name BankOk, as well as the mobile service for a quick and profitable return of VAT abroad — TaxFree4U.
Then the guests went to the IBM booth, where Elmira Nabiullina and Rustam Minnikhanov spoke to the robot Nao. During the presentations of Sberbank, the guests were presented a project called Digital Ecosystem, allowing to transmit and store documents in encrypted form and to use electronic signatures.
The start-ups also had an opportunity to present their products, however, due to time constraints, the delegation had the time to see only two developers: Smart Security, which presented the technology of a person identification, it is useful if you are stolen your username and password from the online banking application or account, and Oz Photo Expert — their product is able to detect the falsification of any document.
A bank-chip, hope for blockchain and convergence with mobile operators
After the exhibition, the delegation went to a plenary session, where the guests were joined by the head of QIWI Sergey Solonin, the founder and chairperson of the Board of Directors of Tinkoff Bank Oleg Tinkov, the managing director of the analytical direction of the financial practices of the company Аccenture Edwin Van der Ouderaa, as well as the representative of PWC Nigel Vugt. After brief welcomings of each speaker and Elmira Nabiullina's little message from Dmitry Medvedev, Herman Gref opened the session and thanked Tatarstan for the hospitality.
'In Tatarstan they do not know how to do a bad job. If they start to do, they do it very well,' said the head of Sberbank of Russia. 'We gathered a year ago in Innopolis, and this year we have already signed the agreement: we have shifted a very important part of our activities here, because here a really unique environment has been created. Tatarstan is becoming a place of attraction for high technologies.'
Herman Gref, the moderator of the forum, invited speakers first to speak about what challenges the participants of the market will have in the next 10 years. According to Sergey Solonin, for banks should be prepared for not the most enviable fate, as they will rapidly become a commodity, that once occurred to mobile operators. Also, the speaker is sure that the future of the banking sector belongs to blockchain: 'We have done a lot in this area for all these years. The Central Bank has got involved in this work, it became the center of these new developments. Blockchain can significantly change the way we see financial payments, technologies connected with finances.'
'A bank without branches, directly with a client – it is the future. In my opinion, in 10 years, a bank will look like this — a phone, maybe a chip or glasses — not essential, but it will be a gadget. I'm also quite sure there will be a convergence between a mobile operator and a bank in 10 years. However, of course, offices will remain, though, I don't understand why people still go there — for me it is very strange,' said Oleg Tinkov.
Elvira Nabiullina reminded that just two years ago the market participants named tightening of regulation and the lack of capital ones of the main challenges, but new technologies — at the last place. However, it has been a significant change in these two years. Financial technologies have a significant impact on the banking business and the proof is that the investments in financial technologies have already reached $22 billion — they have quadrupled in three years.
'I have never met such a horrible service like in the banks of Europe'
QIWI Director General alarmed a little the bank workers who were present at the forum. According to him, robotics and artificial intelligence is not the best news for the bank specialists since a big percentage of bank employees may lose their jobs: 'For the country it is very important that as many people as possible worked in the field of knowledge. To stay in the field, it is necessary to look carefully in the direction of IT.'
The representative of PWC company, on the contrary, insisted that new technologies – it is great, but they will not displace people, because a person prefers to work and communicate with a person. The speaker also advised the banks to be more customer-centric — this statement caught the attention of Herman Gref.
'You said the owners need to become more customer-centric. I have not seen a single bank that would say — I am not a customer-oriented, I don't understand a customer. For whom you have just said it?' asked Gref.
'The question is being honest with ourselves. Banks often focus on a product, not a client. There are few banks that are customer-oriented,' replied Nigel.
'I think that America and Europe have big problems in the banking sector from the point of view of customer service,' joined the conversation Tinkov, having broken a storm of applause. 'As a customer of banks in Europe and the United States, I think that I have never met such a horrible service.'
Another foreign guest Edwin Ouderaa peacefully noticed that in a situation when technology is evolving with great speed, it is necessary to train and educate their employees — no one should be left behind.'
Will there be a merger between the Central Bank and the Ministry of Telecom?
The head of the Central Bank is sure that financial technologies is a very difficult issue for the regulator, but it can be resolved by working with the market.
'New technologies appear, the services, that are faster than ordinary regulators, so the number of documents that change the regulation and supervision is increasing exponentially, and the banks are starting to complain. We have to restrict, to regulate in the old paradigm more and more. We need to change the very ideology of regulation. It should be proportionate to risks and scale of financial technologies. We should not squeeze, we should give new technologies an opportunity to develop,' said Elmira Nabiullina.
According to Oleg Tinkov, the main challenge for the regulator lies in the personnel sphere, as new technologies will definitely require recruitment of more young and advanced employees.
'They must be able to work with data, to understand what data is, to know the working principle of the Internet,' said Tinkov. 'At the same time, I forecast a convergence of two institutions — the Central Bank and Ministry of Telecom.'
Is anonymity only illusion?
Besides, Herman Gref at the plenary session has debunked the myth that the use of cash gives people complete anonymity. Actually, the discussion started with the fact that Elvira Nabiullina reported on noticeable increase in the share of cash payment (an increase of 29%).
'The 'cashiest' Republic in Russia is Tatarstan. So, we signed an agreement with the leadership of Tatarstan 1.5 years ago, called 'Cashless Tatarstan'. We, by joining efforts, try to influence the behavior of customers, to create tools to help people understand that cashless world is cheaper and more convenient than cash one,' said Gref. 'People think that when they buy something in cash, they remain in the shadows — it is an illusion. When you come with cash, there is information that you take it from somewhere and the information will be where you spend it. These data are now collected together, and there are no absolutely guarantees of your anonymity. Fiscal authorities are also developing very fast and in few years they will be able to accurately analyze your behavior and all your expenses.'