Article by SDM-Bank CEO M.M. Solntsev on Banki.ru16 May 2019
“For individual entrepreneurs, the most difficult thing is to act in emergency situations”
SDM-Bank has started its operations 28 years ago and, before long, it focused on SME. Maxim Solntsev, Chief Executive Officer, tells Banki.ru how the bank does not compete with online competitors, why each employee manages his/her own clients and what kind of new threat entrepreneurs will face soon.
Last year I registered myself as an individual entrepreneur. It is almost impossible to choose a bank you will be serviced with. As a result, you have to ask for recommendations. I have been referred to Modulbank, Tochka, Tinkoff Bank, Alfa-Bank. And no one mentioned SDM-Bank.
It's hard to compete with players who spend millions every month for advertising. Our advertising budgets are minimal. We have to market ourselves differently: if for some reason you become our client, we give you such a level of service that you not only stay with us, but also recommend us to your friends. Besides, you need to understand that the so-called online banks put you on the conveyor. But as for individual entrepreneurs, the main difficulty is not just regular everyday contacts with the bank, but actions in emergency situations. And in this case it is important that an entrepreneur has a manager who has enough time and competence to solve his or her question. When the number of customers at the bank goes to tens of thousands, such a manager may not be found. And I am sure that we will outwork in this situation.
How many SME clients do you have?
We have more than 7.5 thousand actively working accounts of legal entities; about one third of them is in the form of individual entrepreneurs. A business, including small and medium ones, is usually a group of legal entities, so it is difficult to determine the number of businesses. We make sure that we have enough specialists for each business.
How many clients do you have for one manager?
We have an unusual system, we have spotted it in service organizations in developed markets. In fact, every our manager works with clients in addition to the main character of work.
CEO, after all. So, how many clients do you manage?
70 groups. Obviously, this does not mean that I solve all their technological problems. But for each of these clients, I know the decision maker and understand the structure of the business. As a rule, once a quarter we call up and discuss the current situation; once a year, I meet once a year in person. In addition, once a month I receive reports on what is happening on the accounts, whether everything is stable both in business and in our relations with this client.
How many years have you worked at SDM-Bank?
There are not many believers in a number I say. This year will be 26.
All Russian entrepreneurship has passed before your eyes. Do you notice any changes?
Nowadays, sweeping changes take place at the level of business inheritance. Pioneers of a market economy hand over business to children. Young people are certainly better educated, but they seriously lack the skills that come from solving specific business problems here, “at the place”. Those who started a business in the 1990s have “tested the waters” for various stresses so much that they are ready for any scenario. Those who inherit this business now do not have such a level of survival. This may not be a conflict between fathers and children, but a serious discrepancy. When I listen to how the new generation offers to change the existing way the things to be done, I understand how far it is from practice.
Will the youth ruin the business of their fathers?
I'm not to judge. Young people are better prepared in terms of education, but our business environment is still extremely unstable, our indicators in the Doing Business rating are not without reason so low. The new generation will not be easy to continue the family business. But first, I believe in the power of evolution. Any generation is better than the previous one, this is how the world works. Secondly, in some industries - trade, consumer sector, financial sector, telecom, public catering - the situation with regulation has indeed improved in recent years.
In the West, it is becoming increasingly common to say that your own business should be run when you are 30-40 years old, when you are experienced, have already worked in companies, you understand how everything works. In our country, the idea of entrepreneurship is hyped up for young people and promoted for this category of the population. What do you think, how old a successful Russian entrepreneur is?
It is not a simple question. In the West in general, people make a decision about their profession when they are about 25 years old. They travel, learn about the world. The Chinese and Koreans learn. Here, in Russia, we are somewhere in the middle. It is a different matter that an independent small business is not a priority for the new generation. Even the latest polls of the young population speak about their preferences in the profession, not in the field of entrepreneurship, and as for the state sphere – the preferences are to work as officials. Unfortunately, own business as an attractive unit goes to the background. Although, this is not negative, but rather the stabilization of a kind of euphoria of the 1990s and 2000s.
What is the average age of your client?
Around 45+ years. The marketing of our online competitors is aimed at a younger audience. We take it calmly. Our clients periodically bring nearly fifteen-year-old children to us, they say, we want to start our own business for him, let him try, why not. And at this moment, I think: why deprive a child from childhood? Besides, the average age of the population in Russia is increasing. The age that was considered mature even 20 years ago is almost young today. And self-feelings are changing, today people can feel young at any age.
Now they talk a lot about the growth of the debt load of the population. How do small and medium businesses feel in this regard?
It is clearly undercredited. The criteria of the Central Bank for lending to entrepreneurs are much stricter than for lending to individuals. The Central Bank has been struggling for so long with the situation when banks lent to financially insolvent businesses of their owners, that now lending to legal entities is very regulated and is in very strict correlation to the positive financial result of the business. In order to be credited, an enterprise must be financially healthy.
SME, for its part, also complains about the difficulties in servicing with banks.
This is a consequence of our overregulation on the part of the Central Bank. Another part of the problem is on the side of banks. Technologies of large banks are based on the conveyor. This model is suitable for retail customers, but not for SME. The basis of entrepreneurship lies in the identity of the business owner. There is a philosophical contradiction: banks want all businesses to be the same, and entrepreneurs want to be individual, because uniqueness is the main competitive advantage. Such entrepreneur generates his revenue in one company, his real estate is registered for another, and the employees - for the third. Here you have to understand the relationships, assess risks, such things cannot be put on the conveyor, you need to add an individual component for each business with common uniform service standards. For us, this is the main challenge and the opportunity for a good daily service work.