Article by SDM-Bank CEO M.M. Solntsev on vbr.ru25 April 2019
Vbr.ru, the largest independent Russian service for selecting profitable banking and financial products published an article by Maxim Solntsev, Chief Executive Officer of SDM-Bank.
The article describes in detail the current situation on the mortgage market; the rating of mortgage borrowers was made taking into account the required loan amount, the level of real estate, as well as the priorities and opportunities of the client. According to the practice of the bank, mortgage customers can be classified under four categories having its own capabilities, its own requests and expectations from banks.
Who. The biggest group; it is accounted for by 40-50% of mortgage borrowers. Generally, they are young people, young families and money-saving middle class. According to their ability to fit into the required conditions, the bankers jokingly call this group of customers as "only just". They want to buy a property worth up to 3-5 million rubles. As a rule, they do not have their own money for purchase; moreover, it is desirable that the first installment should be minimal - within 10%.
Requirements for the bank. People with a low-income bracket, who need to get the maximum amount of the mortgage, will choose a bank that will provide the maximum loan with the minimum rate and not very high requirements for the down payment.
What kind of bank is needed. For these people, it does not matter which bank to go to – they just want it to give the maximum loan amount and a low rate. As it is more often a question of buying in a new building, it would be desirable for the bank to be located near the place where the residential complex is located. The rating, the level of service, the reputation of the bank is of much less client’s concern than the rate.
Who. This category accounts for 30% of borrowers. These clients have their own budget of up to 10 million rubles. This is an average price category; with such an amount you can purchase a residential property worth up to 5-12 million rubles. As a rule, they have “some unnecessaries to sell” in order to buy something a little more expensive.
Requirements for the bank. The rate is also important for this category, but they feel seriously about the bank's reputation and service. They prefer that the entire service be provided to them in “one window”: for example, they took out insurance in one place, made an assessment, and did not send it to another organization. Borrowers in this category have lawyers or realtors involved in the transaction. They read the contract very carefully, study all the nuances - interest, insurance features and so on.
What kind of bank is needed. They need good service, options and customer focus, even if the rate is slightly higher - by 0.5-1.5 percentage points, but for this price, they expect not to hear from the manager “please contact the call center” if they have any question. Location of the bank, the professionalism of the staff, attitude to the client, low commissions and the minimum amount of insurance plays key role for these borrowers. They look at how convenient the loan repayment mechanism is for them, whether there are any restrictions on early repayment, how flexibly the bank reacts to abnormal situations - with loss of income, illness, divorce, etc.
Who. Approximately 10-15% of mortgage clients can be designated as VIP clients in the residential urban sector. The purchase budget is over 20 million rubles. These are top managers of companies, owners of good business.
Requirements for the bank. For these people, it is important to have special options: a personal manager, the ability to conduct a transaction under individual parameters, in particular, complex transactions in which not all banks agree to participate. The reputation of the bank is also important for them.
What kind of bank is needed. In addition to good service and options for VIP clients, the possibility of personal contact with top managers of the bank is necessary. Another important factor for them is maximum confidentiality and the absence of “leaks” of information about the level of their income. As a rule, they have already established relationships with the bank their business is serviced with; and if their bank cannot meet these needs, then it risks losing not only the potential mortgage client - an individual, but also the client company, because another bank, which will give a mortgage to this borrower, can lure away his company to provide services.
Who. We refer “super VIP” to the fourth category; there are very few. They buy a large country house or, for example, a part of a business center. The amount of their purchase starts from 50 million rubles. These are the most demanding customers. Personal service and a clear, well-coordinated work of the bank are more important for them than the rate. For them, confidentiality is even more important than for the previous category. In addition, they are very appreciated when they do not impose additional services (insurance and other expenses). These customers need to understand what they are paying for.
Requirements for the bank. These clients need to know personally the top managers of the bank. They want to understand who they are dealing with, and be sure that they can call the manager if necessary. They believe that they have achieved a lot and therefore they want to communicate with the same people in other areas.
What kind of bank is needed. Like the previous category, VIP clients - wealthy people require from the bank the highest level of service, additional options and personal relations with management. This is more important for them than a few points in a rate. They need to be provided with the most customer-oriented service and always be in touch. It is important to them even how they are welcome in the bank: how good coffee is served and, of course, it should be in a beautiful cup.