Innovation policy is the driving force of Ameriabank’s development

Interview of Arthur Hambardzumian, head of Ameriabank’s Innovation and Quality Department, to ARKA news agency

ARKA: Some of Armenian banks offer Internet banking services to their clients. What has made Ameriabank offer this service too?

Arthur Hambardzumian - There are two major factors that have made us introduce on-line banking technologies, including Internet banking. One is the quick development of information technologies and Internet’s penetration into new areas of banking activity, forcing them to work harder in order to comply with the spirit of the time and provide their clients with new tools to manage their bank accounts from any corner of the world. The second factor is that Internet banking helps our clients to reduce significantly their transport and other expenses, saving them also from visiting their banks. Internet banking reduces concurrently the primary cost of many banking products, as a result banks have to reduce the cost of their service as they do not need larger personnel to provide the so-called classical banking services. In the long run, banks benefit from introduction of innovation technologies and so do their clients. Regarding Ameriabank, our strategy is to offer our clients a comprehensive package of services, including distance services, such as Internet banking.

ARKA: - Could you specify the content of Internet banking services?

Arthur Hambardzumian – The priority task is to shift from the so-called classical way of offering main banking services to distance services, which allow customers to manage their accounts without visiting banks. Online banking system enables our customers to receive information about the balance on their bank account and its movement, make local and international remittances, convert foreign currencies, pay utility fees, credit interests, receive information about deposits and bank cards as well as send and receive protected messages, get information about currency exchange rates and other concomitant information. Having in mind that Internet banking is a new service in Armenia we are collecting all the offers and proposals of our clients to have them in mind while upgrading and revising Internet banking in order to ensure a most convenient and effective service to our clients via Internet.

ARKA: What are the main advantages of Internet banking and whether this system is well protected?

Arthur Hambardzumian – As I have said above, Internet banking is a new technology at the Armenian market and our customers are just getting used to it. This makes security issues a priority. To ensure safe authentication and identification we use the so-called token devices generating one time keys used by clients to confirm their messages and transactions. Armenian banks use the tokens devised by Digipass and VASCO Data Security. On the other hand to ensure confidentiality and security we use SSL 128 bit key encoding system which is the most protected version of information exchange system. Besides, the web browsers used to offer Internet banking services have been certified by VeriSign. Ameriabank has undertaken all possible measures to protect its clients and the bank against unsanctioned access and other threats. The system is safe and reliable.

Another important aspect of our activity is the price policy allowing the clients to choose one of several options. For example, if an individual client wants to receive only information without performing transactions, i.e. to view only his accounts, to get information about the deposits and balances, the service is free. For clients wishing to perform transactions via Internet banking system, there are competitive prices. We are planning to develop privileged prices for all major banking operations performed via Intenret, which we think will become another factor to prompt expansion of Internet banking.

ARKA: When was this service introduced and did it help Ameriabank attract new customers?

Arthur Hambardzumian – The service was introduced in 2009 October, however, we do not look at it as a main factor that can help us attract new clients. It is only part of the package of services and is a technology service rather than a banking service. Therefore, the system targets in the first place our current customers to provide them with an opportunity to get higher quality services. The availability of distance services helps us win new clients. But here we are facing a common problem -Armenians are quite conservative in what is related to new banking services preferring classical face-to-face servicing, which inspires them with confidence that the transaction will be performed normally and in time. But the statistics shows that the clients are quite quick to get used to new technologies.

ARKA: What segment of your clients tends to shifting to Internet banking service?

Arthur Hambardzumian – We offer Internet banking service to both individual and corporate clients. Most of our corporate clients still use still usual bank-client system but we are working with them to help them shift gradually to Internet banking system. I think some time later all companies will pass to Internet-based technologies.

ARKA: -What kind of new services does Ameribank plan to launch in 2010?

Arthur Hambardzumian – We are completing the preparatory work for launching a set of new services in early 2010. I would like to single out structural products, particularly, a structural deposit that will allow our clients to make profits at financial markets by making transactions on gold and oil with guaranteed safety of their investments. Besides, we are planning to introduce cash management service for holdings, which need to manage their flows and have consolidated balances on all accounts. We have also completed the work for development of a service designed for opening and managing so-called metallic accounts, particularly, on gold. There are, however, some points that need to be reconciled. Technically, we are ready but there are still some legislative problems which do not allow us to work more actively in this direction.

ARKA: Ameriabank positions itself as a structure, which is not only open to innovations, bit is seeking to take the lead, and challenge its competitors. Could you cite examples to illustrate this?

Arthur Hambardzumian – There are many examples which confirm our innovation policy, but we regard innovations in a broader spectrum - not only as services but also technologies, management systems and a new approach of how to work with our clients. I would like to mention insurance of our individual clients’ deposits by Rosgostrakh-Armenia insurance company, started in early 2009. Ameriabank also launched a major project last year designed to help develop renewable energy. The bank also started a small and medium businesses financing project on very profitable terms. Under this project our clients have the possibility to have their interest rates cut within the first three years of maturity period. We also introduced pension schemes, projects and services for assets management and a full spectrum of investment-banking services. Regarding new technologies, we introduced a more effective server and network equipment which allow to ensure a most efficient and reliable operation. We also introduced CRM system allowing us to use the most latest achievements and technologies in organizing our work with clients and improving the quality of our services. And eventually, we work constantly to improve the management system in line with ISO 9001:2008, that was certified in April by a German TUV Rhеil and Group certification.

ARKA: Will Ameriabank keep to its ambitious innovation policy this year?

Arthur Hambardzumian –Ameriabank will go on with its innovation policy because innovation is a key factor to our success allowing us to win steady positions at the market. The bank plans to introduce a number of new services and technologies in 2010 but our ambitious plans are sometimes held back by legislative restrictions. However, we hope that as a result of discussion of our initiatives with regulatory bodies, appropriate legislative and regulatory acts will be passed to allow us to quickly implement all our ambitious plans and offer our clients new services which are not yet accessible at the local market.

ARKA: Is there a big demand for innovation technologies in Armenia?

Arthur Hambardzumian – There are two approaches to innovations in services sector. The first is that the market itself dictates the need for emergence of this or that service and the second is that they and their advantages should be introduced to customers. In our case both factors are present. In principle, there are well known banking products, which are in great demand. Our bank has tried to fill in these niches, particularly, by offering such services as leasing, factoring which are offered by other banks as well. There are also services which we need to introduce to our clients, to propagate and show their advantages. In general, financial literacy of Armenian citizens and their willingness to use innovation technologies are not at high level. This is why the banks have to prepare their clients for new banking products. Innovations are necessary but their introduction is a complex task because you have to not only .develop a new product but also the market for it. -0-