Club “Bankir” Interview, Ukraine

We recently had the chance to speak with Tayfun Topkoç, the SAS Southeast Europe General Manager. Topkoç was named the most successful Chief Digital Officer in 2018 in the Middle East and was in the Digital 100 list released by Fast Company Magazine in 2020, a list which brings together those leading the digital world in Turkey. Known internally as a CDO – “Chief Dream Officer” because of his relentless need to always look forward and dream big, we took advantage of his attendance to Go Digital 2021 to chat to him about his vision for Ukraine and the region.

You are responsible for the Southeast Europe Region, which is very diverse in regard to its culture and business needs. What are the common points you have noticed? 

It is indeed a diverse region, spanning from Turkey to Ukraine, Greece to Romania, and Serbia to Croatia, to name just a few countries. Nonetheless, we have many common threads that connect our region and throughout history we have been intertwined. This is visible in many aspects of business, but also in our personal relationships. Our warmth, welcoming mentality, open communication, and the importance we place on establishing close relationships is crucial and is valued throughout the region.

From a business perspective, I see hunger for innovation every step of the way. People are used to challenging times, and they know how to adapt. They have the drive to look beyond the horizon, step out of their comfort zones and make tough decisions. Doing things differently is what is needed to overcome hard times, and this is when we learn the most.

Case in point – Southeast Europe is the region which saw the biggest growth last year despite all the challenges! These countries show a common appetite for new technologies, digital business models and innovation. We have seen a huge development in society and business.

And of course, there is food! It’s fantastic, I enjoy it very much!

Looking at the past year, many say that Covid-19 was the biggest accelerator of digital transformation. You are working with the biggest Financial Institutions, what are your impressions?

Covid-19 hit hard. The world all froze at once. We saw companies realizing that the current business models they were running were not relevant anymore. Imagine a bank giving a loan to the owner of a travel company that had shown solid business results for a decade. The pandemic devastated tourism. How can a bank assess the risk in this case? How can they preserve their customers and ensure sustainable operations? They had to pivot quickly and create new models, and this is where our expertise helped our clients – we gave them the ability to drive data and analytics-based intelligent decisions across their company.  

Organizations also need to look at new business opportunities, particularly digital opportunities. It was enlightening for many managing boards to realize the need to do things differently. And if you compare the situation in companies now to that of February last year, it is true. Nothing is the same.

Risk models have completely changed, business pace has changed, not to mention the requirements for digital and physical channels. Understanding customers better and being able to offer them timely, relevant products has become crucial. 

Banks have a legacy lending culture based on business lines and vertical business processes. Different lines of business have different solutions and technologies for different vertical processes. The integration of these different technologies creates operational inefficiencies and slow management responses to the changing market conditions.

Job security for individuals and business resilience for companies has become a major issue for customers. The way people spend their money has shifted, and companies have started to experience major cash flow and liquidity challenges. Due to restrictions and distancing practices, the use of mobile and digital banking has dramatically increased, thus increasing fraud and cybersecurity risks. Governments have introduced new incentives for bank customers that have made banks redefine their products. Payment holidays, waived charges, interest free periods and deferred interests have also forced banks to redefine their products. Business conditions have changed dramatically, existing risk models have become insufficient, and banks have had to redevelop risk models repeatedly. Covid-19 conditions have forced banks to use more data sources for better risk management, fraud prevention and customer engagement – this, however, has created more integration work.

What makes the Ukrainian market attractive? Can you compare it with the others you are working in?

Ukraine is a very strategic market with a population of over 40 million, and it serves as a bridge between Europe and Asia. Its economy has been growing since the last quarter of 2015. Since 2014, digital transformation has accelerated in government, finance, agriculture, and health industries. Similar to other countries, the pandemic has caused recession. As a global leader in analytics and artificial intelligence and with our global experience, we would also like to help Ukrainian companies and institutions towards a sustainable and data-driven growth during these unprecedented times.

Furthermore, the majority of the population of Ukraine has a secondary or higher education. The country’s largest cities, Kyiv, Kharkiv, Odessa, Dnipro and Lviv are major educational centers. We see a great potential to develop talents in data science, artificial intelligence, advanced analytics and machine learning, who can support innovative projects within the country.

As a “Chief Dream Officer” what would be your dream for this region?

We want to make sure that we can help companies and governments become more data-driven, analytical organizations in order to secure a sustainable future.

Analytical capabilities in the region are on a relatively modest level as enterprises are struggling to find adequate data management resources and convince management to provide the budget for exploratory data-related projects.

We have seen changes happening with accelerated Cloud computing penetration in recent years. The financial sector and retail companies are extensively shifting towards hybrid cloud models. They have realized the value in the speed, flexibility, and scalability of the Cloud environment. At SAS, we are ready to provide solutions within the Private, Public and Hybrid Cloud environment as well as on-premise.

We are talking about Financial Institutions using analytics and AI solutions to drive new business, but what benefits can they gain out of it and how does this impact the customer experience?

Once seen mainly as a marketing practice, the customer journey is being redefined with the end-to-end optimization of lending practices in order to become more competitive in the market. Banks have realized the power of end-to-end integration and the optimization of banking processes to reduce response times for their customers and increase their profitability. Once seen as different processes, marketing, fraud, risk, underwriting, collections, compliance are now being optimized as part of a digital customer journey to innovate new digital products boosted by Analytics and AI.

As a result, the SAS lending platform for banks acts like a glue that holds everything together. All lines of business and all the different process areas are integrated and optimized with an AI based lending platform. The SAS lending platform provides a contemporary digital process optimization environment for banks to become more efficient and responsive to the changing market conditions. The policies and principles of different lines of business may still be different due to different legislations and scales, but all these different policies and principles can be managed through this AI-enabled lending process optimization platform to create more shareholder value.

Therefore, banks can benefit from productivity gains of up to 20-40%, increase credit lending by up to 2.5%, and reduce credit losses by up to 5%. Banks can realize 0.1% of their total asset size as an annual profit increase by integrating lending processes end-to-end. Plus, we have already seen great examples of major banks across the world that are implementing this strategy and getting huge returns as a result.