For Bank of Cyprus Deputy CEO Dr. Charis Pouangare, the royal road to profit passes through enhanced service for the customer.

"This enables us to overcome many challenges. First, the low interest-rate environment is also a key challenge. What Bankers usually say is that profit is the first victim of the low interest-rate environment. But, today, it is even worse because we have negative interest rates. And banks still have to adjust.

Then, for a long period, we have been dealing with legacy issues. For the last 7 to 8 years, we have been trying to resolve problems of the past. Soon, we expect to reach the end of that particular line and legacy concerns to be finally left behind us."

Digital infrastructure more important than ever before

"And now we put in place a programme to increase our services to clients, and in this way to increase profit, which we expect to bring to completion in 2022."

Bank of Cyprus has been investing, first of all, in technology, which is the key for faster, safer, cheaper service that can best cater to customer' bespoke needs, Pouangare explains.

"The investment in technology is intended to do two things: First, to be able to serve the customer with lower costs. Then, to introduce new products, and new channels of service."

The Bank of Cyprus is in a good position to pursue this programme, Pouangare notes, because its digital transformation programme started some three years back. "Metrics tracked meticulously by the Bank reveal that it is a leader in the provision of digital services. He stresses out that our biggest branch today is the customer's smartphone.

"So now we're in a position where all the infrastructure work has been done. And we're poised to deliver at the front end.

"You need to understand that all banks need to firstly manage legacy systems. And the problem is that it's not one system, it's a bundle. It's about 50 major systems that talk to each other. In order to be able to deliver digital transformation, banks have to build this middle layer, in which all the systems talk, and then through this middle level, you create the deliverables."

BOC infrastructure issues have been resolved, Pouangare continues.

"And now we are working on the deliverables, which will lead to, above all, improved services for the client, and increased profit. We have created a substantial technology bank, with which you can do many things, especially through mobile banking. This is important because we see now that mobile banking is expanding faster than our internet. Mobiles, in our hands, are now the gateway to banks."

It is the customer that counts

All of this leads to serving the customer better, and in a profitable way, Pouangare insists.

"We still pay attention to the business relationship with our customers, every customer counts. Customers do not care if we are profitable, they just want better service. The key is providing efficient solutions.

"For example, we are transforming our branches. Our new Stavrou branch has a room with only machines and ATMs, so that the customer can do transactions faster. The 'queue-less' branch is the future.

"For now, there are three greeters there to guide the customer with the use of the new machines, but that will change as customers become more accustomed to using the technology. If you need further assistance, they will guide you into the regular branch to get help from a banker or a cashier," says Pouangare.

"All of this cuts expenses and costs, but, more importantly, it makes the customer happy. This gives customers the sense that they' re in control, and they have shown appreciation for working this way.

"There are still operations that require seeing a banker, like applying for a loan. However, we now have through Internet Banking a way to pre-apply for any kind of loan (personal, student, car or even mortgage loan), so that you can get an indication if your request of the loan falls within the Banks policy . Further down the road of digitalisation, we will make the entire loan process available online, end-to-end, and you will be able to sign the agreement and get the disbursement of the loan at the spot."

For some processes, there are legal issues that hold back digitalisation, Pouangare points out.

"For mortgages, for example, you still have to go to the land registry. Bureaucratic procedures must be changed before we can digitalise that. There are a number of such examples."

But Pouangare foresees that, apart from the bureaucratic procedures and processes in which a banker has to be involved, all the rest will be possible from home, within about a year.

The business model is both physical and digital

However, customer visits to the bankers will be part of the process for some time, he says.

"It's an opportunity for us to get the feeling of customer needs and to offer new products that the customer might like. This is why our business model is both physical and digital, because we get cross-selling opportunities that are good for the customer and for our bottom line," Pouangare says.

"It's a contact point for all customer needs. They go to the banker to get advice and to find solutions."

At the same time, BOC has built its data analytics team to further zoom in on customer needs.

"We've built our data analytics team in retail, we have now a full team built, and we are working with various models. This brings us much closer to our customers," he adds. If someone takes into consideration the vast amounts of clients we have as Bank of Cyprus then the data analytics team is very powerful to build its models for customer care and customer selling.

"Thanks to data analytics, we're launching a campaign of pre-approved credit cards, with customized limits, and pre-approved loans. And if you have a loan that is nearly paid off, we pre-approve the customer for another loan. We use all communication channels in this type of campaign, from SMS, to social media, to e-mail and calls."

And the bank is exploring how best to use AI, Pouangare says.

Corporate clients work with carefully customised products

Bank of Cyprus has a very tailored approach to corporate clients, Pouangare explains. There are three corporate centers, one for SMEs, one for medium-sized corporates, and you have the global corporates.

Of course, in Cyprus, the vast majority of companies are SMEs. "These small companies, many of which are family firms, often don't know how we can best serve them, or they are just not aware of many new possibilities, Our skill is in educating these clients, and, because they trust us, we are very successful at working with them," Pouangare comments.

"Each has its own special structures, and we provide for them. We don't have a shelf of products for corporates. We work closely with them to provide just the types of service they require.

"The same principle applies both in retail and corporate banking: We build relationships with clients; we have the entire spectrum of solutions, and we dedicate our services to their specific needs."