How to make banking convenient to entrepreneurs
Today we speak to Boris Dyakonov, CEO at Tochka Bank.
Tochka.com is digital-only bank for entrepreneurs in Russia (backed by Otkrytie Group banking license). Tochka has around 40 thousand business accounts and over 80 thousand personal accounts (employees and directors). Launched in February 2015 as the first online bank for entrepreneurs in Russia. Headquartered in Yekaterinburg.
Boris, in all your interviews, I’ve read and seen, you say that you are not a Banker. If to say your biography in short to our listeners – you studied at Philosophy Faculty in Ekaterinburg, then you worked as a pastor, right? Then you studied in the USA, and after that, you came back and got a job in Bank24.ru as an IT specialist, as a programmer and stayed in that Bank till getting the Executive position in it. And after the closing of that project, you created Tochka, and you are staying in banking system till now, but you do not consider yourself as a Banker. Tell us who you are?
Firstly I worked for Severnaya Kazna Bank, where we actually created one of the first internet banking solutions in Russia. And in four years Bank24 started. Well, I’m just a human being. I know people who dreamed to be bankers, I never did so. Long time ago I just wanted to get IT job somewhere in the area of websites or system administration, but I was always fascinated by technology and I was always fascinated by the way it can change people’s lives and experience and just starting to work in a bank I’ve seen how outdated a lot of stuff is, how painful it is and seen then I’ve been trying to play inside the bank but on the client’s side of the things.
We know that your motto which you always say and evangelize is that your mission and task is to make the world convenient to entrepreneurs. How exactly are you doing it in Tochka?
I think it’s all about the team; it’s all about the way we work together as a team. We just think about our clients, and we try to come up with a solution that they would love. That’s pretty much how it works.
You are digital-only bank in Russia, so with no branches at all. How this concept generally is perceived in Russia? As we see that digital services are the expectations of millennials rather than older age entrepreneurs? Is it difficult to persuade customers to open an account with you?
Maybe three or four years ago that was something we haven’t dreamed of, but now we see that all people use a taxi from a company that doesn’t own any taxi, we talk about Uber or Yandex Taxi for that matter. So, I think market expectations have shifted, and people are more often consuming digital products, digital stuff. So, it’s not an issue anymore since Tochka works inside Otkrytie Group, which is the largest financial privately owned banking group in Russia, so in that sense, we don’t have an issue saying, “We are big, we are reliable, etc.”, we just moved on with the understanding that “Hey, it’s inside the large financial corporation,” but it’s just a digital service, a digital bank that does a very nice layer of banking experience to the clients, so we are in a very beneficial position in that.
What is the average profile of your entrepreneur? How does he look like? How old is he, working in which segment?
Our core customers are digitally minded entrepreneurs, mid-aged, both men and women, who just want to do their business, don’t want to mass round with papers and banking stuff, that’s the core, that what we have in the heart of client’s proposition. Then we have students, we have all the folks, we even have large corporations who bank with us, and that’s OK.
Is entrepreneurship a skill that you are born with, or it can be taught?
I think even if somebody was born as an entrepreneur they have to learn their lessons and I think everybody can create stuff, but it does take some learning and some luck at the end of the day. So it’s a mystery.
Do you consider yourself an entrepreneur?
Sometimes I do, sometimes I don’t ? It depends on how much coffee I had in the morning ?
In your opinion, how entrepreneurial do you think Russia is?
Russia and the whole post-soviet area they were very entrepreneurial and the proof I have for that – even in the times when entrepreneurship was illegal and it was outside of the boundaries of the law people was still doing small stuff, were still looking for ways to earn money, to create stuff, even if it was making vodka at home. So, I think all the nations, and Russians included, covered under Soviet regime were very entrepreneurial.
For which part of your customer base you are the only bank. I mean that they don’t have any banking products with another bank?
From our latest research around 70% of the customers bank only with us, which is a higher percentage than the average on the market.
Whom do you consider as the main competitor in Russian market?
Well, on the one hand, we’ve educated a bunch of competitors on the market that come from all over the place. But the way I like to think about it is that for all Russian banks Sberbank is the major competitor, and then there is another way to think about it is that our true competitor is inside our head and it’s about our limitations, and our believes, and our capacity – just doing my job and do stuff, at least that’s what I’m competing with. That makes sense.
You are constantly on top of different ratings in Russia and not only – as the most convenient bank, as the best online bank and mobile app, the best salary project. This March you’ve launched P2P payments for entrepreneurs. Which service do you consider as the best one in Tochka?
Well, I don’t think there is one single better service that we can say “Hey, it’s the best,” it’s combination of them, it’s like asking what is the best icon on your Android or iPhone. It’s the way the whole thing works together, and at the end of the day, it’s all about the experience that we can share with our customers. So, it’s all of them that you named and beyond. It’s the way the whole thing is put together, and our value is taking old stuff out and rethinking some stuff in bundling all of the functions closer together, and I think the way to look at that as the least of functions is not entirely helpful.
I just have to ask you about a holacracy system you have adopted in your office. In general, holacracy means a structure of self-organized teams rather than being vested in a management hierarchy. Tell us what is it all about in Tochka exactly?
If it’s playing by the book, if it’s holacracy, it’s about giving power to the circles, that’s what exactly it means: hola – circle, cracy – power, so it’s giving power to the circles. For us it’s a way to continue to be agile, continue to be flexible and continue to innovate without a dictatorship, and to scale while staying human and being very transparent to the people we work together with.
What is being transparent to your employees?
One of the part and one of the ways holocracy plays is that all decision-making is very transparent, so it’s just very clear rules of the game.
How many people counts your team and where is it located?
Our Head Office is in Yekaterinburg but we located all over Russia, and we are more than 800 now because of explosive growth we’re experiencing. So, we have offices and people working on behalf of Tochka all over the place.
What are plans for this year? What are your targets?
We have hundreds of them, there are product related targets, we think about several innovative products on the market, and we plan to grow till the end of 2017 heading 70000 walk-in clients, that’s almost triple our sales by the end of the year. But we also have targets that are very hard to measure, but we are still after creating the best experience possible for those who changed the world better for us.
What is your job and your role as a CEO to make these targets done?
Currently I try to delegate as much as possible, and the way I look at it is if there is a way that I could work not at Tochka but on Tochka, how can I be useful to move a company forward cause every company will stay where it is if just everybody keeps doing what they are doing, and the question what I have is I what extra stuff that can change the future I can be helpful with. So, it’s mainly about talking to key people and writing several emails, that type of stuff.
Do you find Tochka a successful project? What is success for you?
I don’t know what is the success for me because there are a lot of criteria for that. But I’m very keen that customers would be happy with that and our NPS of 72.5% I think is highly indicative of that. And we’re also on to our shareholders’ satisfaction, and they seem to be satisfied since Tochka is a profitable project from the middle of the past year, so that’s pretty much where we are.
So Tochka is a profitable project?
It is profitable for more than 9 months now. And we have enough profits to provide our growth.
Boris, where do you personally see an inspiration and ideas how to do a better job. Maybe some country do you see as an example or maybe some particular banks and their models are inspiring you?
Well, sometimes a couple of coffee or tea can inspire, sometimes sitting and looking at the way Istanbul is full of entrepreneurial energy, so I think inspiration can come from everywhere. I get a lot of inspiration from talking with our partner, co-founder of Knopka, with whom we transformed Bank24 and restarted Tochka – Eduard Panteleev, he was at one of your conferences, so I find that highly inspiring and we do some things together.