INFINTECH 2024 dedicated one whole module to Risk Management with the panel discussion titled Higher for Longer – When the Rates Will Hit NPL Ratios.
Marko Mićanović, Co-founder of Unguran & Mićanović legal practice with years of experience spearheading debt collection department at Sberbank Serbia, moderated the discussion.
Participants of the panel discission:
- Milena Vukotić, CRO, UniCredit Bulbank
- Damir Ivaštinović, CRO & CFO, ERSTE Bank Montenegro
- Đorđe Stojanovski, CRO, Banca Intesa Belgrade
- Sergej Kapustin, CRO, CKB Bank
CROs Expected Crises to Hit Harder
Milena Vukotić, CRO of UniCredit Bulbank, answered the question saying that the prediction a few years ago had been worse than outcome is today:
“Despite all macroeconomic uncertainties and geopolitical situation, both households and corporates were resilient with quite stable NPL rations across all geographies in general. UniCredit Bulbank is focused on commercial real estate, in line with our group’s strategy. There are risks there now, with high interest rates and increased online shopping behavior decreasing the demand in this sector.”
Đorđe Stojanovski, CRO of Banca Intesa Belgrade had a similar outlook:
“For the past 5 years we have been constantly living through crises – the COVID-19 pandemic, war in Ukraine, fiscal measures and high inflations. The government and Central Bank helped stabilize portfolios with cap on interest rates. I do have concerns about agri sector due to macroeconomic factors affecting food production in Serbia and the region.”
On the other hand, Sergej Kapustin, CRO of CKB Bank saw the opportunity to be proactive:
“From my point of view it’s a good time to prepare for crisis now. Economy is cyclical and risk is cyclical. Right now the whole region is a healthy environment. To prepare for a negative cycle, it is better to start in a positive cycle when we have good financials, good results and it does not take many resources on our side.”
Early Warning System Mandated in Montenegro
Since the timing of panel coincided with recently adopted Law on consumer loans, the moderator asked how the CROs see these changes and whether their banks are prepared.
Damir Ivaštinović, CRO & CFO of ERSTE Bank Montenegro said:
“Our group harmonizes with the EU legislations. Early Warning System for Retail is now being mandated and ERSTE Bank Montenegro has already implemented it. In the future, as important as it is to be digitized bank, it is also as important to be a human bank and to advise customers on how to improve their financial health.”
Milena Vukotić added:
“I will start with the area in which technology does not contribute a lot – corporate restructuring. My bank was thinking what to do with people dealing with workout cases and thanks God we kept them. On the other hand, Retail is Detail and we are quite ready here. We did the first step and have a collection software that decreased the cost but now we need to take the next step – to improve efficiency.”
Low NPL ratio enabled Banca Intesa Belgrade to implement new solutions:
“We invested in new software for soft collection in Retail segment and also in some models for self-cure solutions also in Retail. Last year we invested in Early Warning System which uses services of Association of Banks’s Credit Bureau. This is helpful since Serbian Credit Bureau has information about all clients of all banks.”
Sergej Kapustin focused on the value of AI:
“Without education, AI makes no sense. We invested in education of 14 young people who learned AI, Pyhton, mySQL, Data Warehouses, etc. So capacity building is the first essential step. In my experience, after implementation of strong collection models, the cost of risk is reduced by 30%. Technology, modern capacity and tech stack are minimum requirements in 21st century to be a successful bank.”
INFINTECH is organized by Logate, your painless vendor for digital journey.
This panel discussion centers about topic that is the focus of our Loan Tracking System (LTS), implemnted for AIK Bank, CKB Bank, ERSTE Bank Montenegro, and NLB Bank Podgorica.
Learn more about to solution and its Early Warning System by getting in touch with us.
