For the past three years, we have been witnessing  a clear trend of reducing numbers of bank branches in Russia. According to the Central Bank’s statistics, as of April 2014, there were over 43,000 of them; three years later,  slightly over 33,000. One of the reasons for this is the Central Bank’s focus on the recovery of the banking sector. However, there are other reasons behind such statistics. 

Russian banks: moving towards a digital future

Some reasons of this are as follows: client traffic reduction, digital transformation and the intention of retail banks to optimize costs and improve efficiency. Sberbank plans to cut the number of its branches by 30-50% over the next five years, and cashless payment and card-to-card MT services are ramping up. Banks are implementing brand new solutions: VTB24 opened its first locations without cashiers, and Bank “Otkritie” launched money transfers via iMessage.  Bank leadership teams under current conditions are posed with the challenge: how to retain the client audience? How to cut risks and increase commission income from transactional business? How to extend the variety of digital services, making it attractive for both  current and potential clients?

Digitalization of in-demand services 

To meet the expectations of present-day  consumers,  the participants of the retail financial services market must  aim  for extension and multichannel presence of the service variety. Money transfer services remain in demand by various consumers. Research initiated by Western Union showed that 56% of Russians have either sent or received money over the past two years. Along with traditional money remittance services that do not require opening a bank account, money transfer operators are offering more technologically advanced business solutions. Integrated services developed by Western Union allow for  money transfers funded from banking cards and accounts via banks’ websites and mobile apps with payout in cash in one of over 500,000 agent locations in 200 countries and territories (as of March 31, 2017). Furthermore, Western Union provides an opportunity to send money transfers from cards issued by any Russian bank via a partner bank’s website or mobile app – this being relevant for banks developing their digital marketplace. 

Advantages of integrated solutions

The advantages of integrated services are as follows: the possibility to save the commission on the transactional income, the potential growth in the number of the bank’s website visitors, and increasing downloads of the bank’s mobile app. Banks such as Avangard and URALSIB have already become Western Union partners in order to introduce these digital services. The implementation of the integration takes about two months.  

Multichannel means strong growth for banks

According to Sberbank CIB data, 75% of Russians use banking services. Most of them prefer to come to locations, but the number of people using remote services is growing. A modern bank needs to combine traditional and innovative channels to remain competitive. Western Union offers a technological solution to enable its services at locations, via mobile banking and via the bank’s website through one integrated solution. 

Russia is a strategically important market for Western Union 

In 1991, Western Union became one of the first international money transfer operators in our country. The company is represented by a non-banking credit organization and holds a payment system operator license. In its 25 year+ presence in Russia, Western Union has become a reliable partner for hundreds of organizations and expanded its network to more than 33,000 agent locations (as of March 31, 2017). Today Russia is one of the best examples of  implementation of the company’s omnichannel strategy.