Latvian business newspaper “Dienas bizness” has published
an interview with the Chairman of the Board of Rietumu Rolf Fuls.
In the interview Rolf Fuls explained what clients the bank will cooperate with and defined the service benefits they can enjoy.
The interview translated into English you can read below:
Rietumu Bank: our service could be labelled “Made in Latvia”. 
Rietumu Bank – one of the leading players of Latvian financial market, after changing its business model, is stepping up its presence on local and European markets, remaining a niche business-service oriented bank. Chairman of the Board of Rietumu Rolf Fuls explained what clients the bank will cooperate with and defined the service benefits they can enjoy. Rietumu bank’s new business model intends an important emphasis on working with local clients. However, there already are almost twenty banks in Latvia, and some of them are large international structures. How are you going to compete with them? Competition in the financial market of Latvia is really high. However, primarily it affects the retail segment, where the share of banks with foreign capital accounts for approximately 70%. It should be noted, that this indicator is still lower than in neighbouring Estonia and Lithuania, where that market is almost monopolized.
Nevertheless, Rietumu is not going to compete in the segment of retail services. With all the changes in the strategy, we will remain a "niche" bank, which is primarily aimed at servicing the business. Here we have many advantages and strengths. The main one, in my opinion, is that we have a deep understanding of the business and are cooperating with clients personally. We listen and really hear them, embrace non-standard ideas, offer individual solutions. We do not work on some type of matrix and that's our strength.
But in order to be guided by this approach, very special resources, including human, professional ones, are required. How do you deal with this? First of all, the level of professionalism of our employees has been and remains very high. They really are very qualified specialists – besides, in all ranks.
It is also necessary to emphasize the growing role of technology – this is a very important element and a serious basis for modern qualitative service. Rietumu historically was a highly technological bank; for many years now we have been servicing the bulk of our clients solely remotely. But we have an important difference from many others: in parallel, we provide customers with the support of experienced professionals "in live" – client has a manager who leads his business and can be contacted on any issue.
One more important point. We have a very compact corporate structure, so that the client can easily get access to top managers, leading specialists in specific areas and maintain contact with them. This is our service model, we worked on and polished for decades, so we manage well.
Are you planning to attract customers through special products and services? Bank’s products are inherently standard and universal. Of course, they need to be constantly improved, as well as there is a need to offer specific services tailored to particular client groups and business types, taking into account their distinguishing characteristic and needs.
For example, currently we are debugging modules that provide the connection between our internet bank system iRietumu and client’s accounting software, taking into consideration the specific features of the legislation of Latvia and other Baltic countries.
At the same time, one should realize that the same products that we offer will be soon or already are provided by other banks. Therefore, the availability of all demanded services should be viewed more as a necessary basis, and not as a tool for attracting customers or a competitive advantage.
For VIP- or simply high-quality service, the right choice and optimal combination of banking products are of primary importance. You need to be able to offer the client a solution that will help him in business and development, rather than hinder or even lead to unreasonable, unnecessary expenses.
For example, choosing an inappropriate credit product, the business can overpay heavily. Besides, currency risk hedging – while for one this instrument is very important and necessary, for other it can be just a waste of money.
Working with the client, we always look forward, counting on the long-term prospect of cooperation.
Which branches or spheres of business are you more interested in as a bank? Actually, it is interesting to cooperate with any prospective business – no matter the industry this business operates in.
I can list some areas where Rietumu is currently more active. It is logistics, transport and transit – traditionally strong sectors in Latvia. It is also export-oriented production; they are currently developing well in various areas – from production to metalworking. Such companies can benefit from the bank’s experience, which has been accumulated over more than two decades of work in different markets. The possibility of access to such expertise is valuable for those enterprises, which export products, and for those, which purchase raw materials abroad.
The segment of non-banking financial services, both payment and credit, is growing rapidly; we have considerable experience of cooperation with such companies, and we see good prospects in this direction.
Rietumu has a strong position in e-commerce, and this allows us to provide high quality services to internet based and fintech businesses.
Today there exist different interpretations on the definition of “local” company. In your opinion, can a company owned by foreign citizens be called "Latvian company"? It's quite simple. The company is local if it is registered in Latvia, works under local legislation and pays taxes to the Latvian budget. That's all. And, in this case, I cannot imagine how can you segregate by origin, citizenship or residence of its owners. It contradicts not only the spirit of the law, but also the fundamental postulates of the liberal democratic society in which we live today.
Are the potential clients, who appreciate such an approach, reaching out to you? Yes, they are addressing us. Some businessmen have felt that the attitude towards them in some places began to change due to the fact that the business owners do not have Latvian passports. However, if such a Latvian company runs well, works honestly and in accordance with the rules of our country, we will be pleased to start the cooperation with it.
It seems that you also are not planning to limit yourself to Latvian market? Of course, no. We are a part of European Union, and we consider the entire EU as our home market. In our business niches, we are free to provide services to our clients in any of these countries, there are no geographical boundaries.
Let’s take payment companies that provide services via the Internet as an example. We can equally well serve them in Spain, in Latvia, in Poland, and in Romania ... Of course, we see things in a realistic light and do not have plans to dominate in any of the European markets. Nevertheless, we are quite able to attract 5-7% of such companies in any of the abovementioned countries, and in aggregate this is a very good business!
Alternatively, take the shipping as an instance. Many shipping companies are registered in certain EU countries, but work all over the world.
To such clients we can offer general banking services, cross-border lending, trade finance, asset management services, and many others.
At the same time, we are helping Latvian clients to enter new markets, get used to them, take root, develop their brands there, increase turnover and earn money.
Will Rietumu continue to work with private clients? Sure, it’s one of our strong directions. The main customers are the owners and managers of companies who are cooperating with Rietumu as corporate clients.
Besides, I would like to note, that there is a growing interest in our saving products from private individuals from other EU countries, for example, Germany.
Can we say that for Rietumu, the crisis that shook Latvia's financial market six months ago is already over? In general, surely, yes. I would like to remind, that the events that happened in early spring were quite sudden and unexpected. They caused a shock reaction, and it was necessary to act very quickly and decisively.
At that time we took a very definite decision, we weren’t clinging to and defending our former business model, which suddenly began to be considered “wrong” and risky – it would be futile. Instead, we quickly terminated relations with high-risk customers, changed the business arrangement style and updated our strategy.
As a result, the size of the bank declined while maintaining a very high liquidity. Today we are in good shape and are moving forward. We open accounts for new customers and take on new projects.
This year is the anniversary year for Latvia. And Rietumu is one of the largest Latvian private enterprises. What would you like to wish your country? For the country a hundred years is a young age. There is still much to be achieved and much to be learned while securing its stable and dignified place in the international community. In this regard, first of all, I would like to wish a determination, a correct and sensible implication of strength and energy.
I believe that it is necessary to develop and engrain a democratic, liberal approach to the widest range of issues related to the development of the state and society, as well as the economy and business. At the same time, an objective evaluation of the effectiveness of certain decisions, their tenability and timeliness is very important.
The society needs both criticism and free exchange of ideas, as well as determination in setting goals, and responsibility for the future. As for the tasks of business in a free democratic society, they are simple and constant for centuries: earning money, providing decent employment, paying taxes. This is a “fair play”.
Rietumu is Latvian bank; we are well aware of our place and role in the economy of the country, as well as our share of social responsibility. Both our service and our projects could be with certainty labelled “Made in Latvia”.
Eleonora Gailisha Mass Media and Public Relations
Phone: +371-67020506
Fax: +371-67020563
E-mail:
egailisha@rietumu.lv
