How TBC Develops Digital Ecosystems
When speaking about ecosystems, whether we want to or not, we start thinking about environmental protection and ecological conditions.
Today, in the age of digital development, the meaning of this word has expanded. A business ecosystem shapes the integrity of suppliers, distributors, consumers, competitors, government offices. This represents a digital platform to connect parties engaged in purchasing space, products and services. Each party creates its value, and the consumer gets the benefits.
Vendoo.ge, livo.ge, tpay.ge are exceptional examples of a digital ecosystem that exists on the Georgian market, and all of them are connected to the TBC Group. If you have not joined this ecosystems, but you wish to buy or sell an apartment, or purchase home furnishings and make payments through innovative platforms, we expect that tomorrow, or the day after tomorrow you will definitely join this ecosystem, because today it is almost impossible to live without digital technologies.
TBC Bank understands that the current fundamental transformation of the industry has developed this ecosystem. The words such as "transformation," "team transformation," "business transformation" are becoming very popular … and these words mean progress. Two key factors are driving the global, fundamental transformation—the digitalization and the expansion of so-called connectivity that has become an accelerator of globalism removing all barriers. Every person and company now has the opportunity to offer and provide services to anyone, anywhere in the world, without leaving home. And this new reality radically changes the mechanisms that shape values. Wealth production business models also change.
Tornike Gogichaishvili, TBC Bank Deputy Director General, speaks about the benefits of the digital system and the company's plans:
-Unlike traditional companies, new digital companies have been growing at a fast pace. This process brings global challenges, because the boundaries between industries and businesses are disappearing, and social media players are entering the payments business. For example, Apple is represented in the payments system and Apple Pay provides services in a lot of countries. This is a huge challenge, and developing this space has become a key part of TBC Bank’s strategy. We understand that it is vitally important to adapt to the new environment, and that this transformation has changed the environment. Taking the pulse of our consumers is a key component of our digital strategy. Transformation and digitalization removes borders, bringing growth and radically changing our consumers, in particular their demands and needs. Diverse services increase awareness and change their perception.
It is necessary to create and provide end-to-end services transparently, without barriers.
TBC Bank is a financial institution, but, as I have noted, barriers between industries are disappearing, and we are to provide good, diverse, simple and transparent services to our consumers —what we call the End-To-End Customer Journey.
We will stand side by side with our consumers to improve their lives. This strategy has inspired us to expand our digital assets to foreign countries, too. Our current strategy foresees that, by 2022, the number of people using our digital ecosystem will grow to 10 million.
-You have already started developing a real estate digital ecosystem. Livo.ge recently appeared on the market, and has already attracted a lot of interest. What does this platform offer, and why is it important?
-The real estate ecosystem calls for collecting providers and consumers of all services related to the sector on one unique platform, which allows these parties to shape new values. Naturally, the real estate marketplace has been somehow developed, but in a very fragmented way. Market players (sellers, buyers, developers, banks) were not tightly interconnected. Similar ecosystems are already working successfully in Europe, the USA. We decided to develop a platform that allows all the actors to get access to all relevant information or services on the same platform. The platform enables the sellers to introduce their properties in a more interesting and complex way. Transparency and simplicity create real value and, therefore, we offer our assistance to brokers to open interesting real estate listings. Despite the fact that TBC Bank is a major institution, other banks and users will not face restricted access to information about market conditions on the platform. Moreover, any user can make use of property assessments services for nominal prices.
-Some users may struggle to use these platforms, however, since it is rather new in Georgia. How are you educating your clients about the platforms? How do you attract new users?
-The key objective of the ecosystem’s development is to ensure co-creation, because the ecosystem works when other participants engage in it. And our objective is to assist any service provider to contribute to data management, get information and, based on this information, to create and shape business models. We offer services to all participants, be it a broker, developer, or ordinary user, to assist them in generating ideas. This platform simplifies the sale and purchase of desirable items, property location or construction type. The ecosystem generates value through the joint participation of all users and, as the end result, benefits are equally distributed to all users – this is the whole philosophy.
-So cooperation and synergy is important between the users and the platform? What is your position on the payment system?
Our strategy is to simplify the process and provide end-to-end services. We plan to add public services to this system. In this respect, we actively cooperate with the Public Registry. We implemented a new payment business with new models. This is an inseparable component of a commercial bank, but we have decided to make this a strategic priority and define it as a separate segment. It is an independent business objective, with independent vertical (management), and we have assembled all payment systems. We will further develop this, and transform it into an ecosystem; for example, NFC technology, QR payment. This means that the bank offers all payment opportunities. We want to keep a finger on the pulse of our users, and participate in all payment components. We focus on our clients, to satisfy their demands and requirements through simple and transparent services. For example, we own part of TKT.GE and we participate in the event payment process. Our objective is to know our users' needs throughout the entire day. Consequently, we hold many offline and online assets. TBCPAY maintains a position in the self-service sector for those who prefer to pay with cash. We offer similar services online. We plan to introduce online ecosystems in this segment as well, so we can offer an integrated chain to our users.
In terms of ecosystem development, TBC Bank has made bold statements regarding the VENDOO e-commerce platform. This is a Georgian Amazon, you said. The platform has already been launched. What has been the response from consumers?
-We decided to develop the VENDOO platform after a simple analysis. Georgian consumers mainly use foreign e-commerce platforms to buy things. Therefore, a lot of money is leaving Georgia. At the same time, it takes a lot of time to receive things they purchase, and it is almost impossible to return things. We want our clients to receive the same services in Georgia, and for their money to remain in Georgia. This platform is useful for the national currency and all the users of these services, and are very happy with it. The platform offers new products every day. We plan to replace foreign e-commerce and allow Georgian consumers to conduct their online shopping in Georgia.
-TBC Group has entered foreign markets, too. The bank has bought Payme, the leading payment system of Uzbekistan, and you said it was the bank’s strategy to develop new banking ecosystems in the retail and corporate sectors of Uzbekistan. What are your plans for the development of Payme?
-In general, we are very cautious when entering foreign markets, because there are a lot of examples when similar decisions brought undesirable outcomes. Therefore, we use serious caution in this respect. Uzbekistan is home to 33 million people, and we plan to launch a commercial bank there in the future. We are also cooperating with Nikoil Bank in Azerbaijan. As for our strategy for Payme, we aim to expand the client base and diversify its services. In 2020, we plan to offer LIVO.Ge, which is analogue to the housing system.
-How much money do you invest in developing ecosystems? How extensive are your investments?
-Ecosystem development does not require much investment, especially in our case since we had all components necessary to develop this platform. In order to develop the housing ecosystem, we bought a 90% stake in the well-developed and well positioned platform allproperty.ge, which is managed by Giorgi Chumashvili, the founder. We do not interfere in the management process. We have not invested a lot of money, but the whole value matters for ecosystem development, which is created by the quantity of participants: the more participants, the higher the value. The key objective is not how much profit the ecosystem generates (although of course we monitor that), the main thing is the type of value it creates for the consumer.
-On June 6 TBC Bank hosted an Investors’ Day event in London. The bank’s management has paid a lot of attention to the ecosystems development strategy. How did the investors react?
-The strategy of our ecosystems was very positively appraised on Investors’ Day. We will continue our ecosystems expansion plan in Georgia, Azerbaijan and Uzbekistan. Consequently, the number of users and the value of the ecosystems will continue to grow.