Awards for Excellence 2019
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Stiff competition and a large, young, dynamic population have provided fertile conditions for the development of digital banking in Turkey and created some of the most tech-forward lenders in CEE.
Even by Turkish standards, however, Akbank stands out. Early adoption of a mobile-first strategy and copious investment in innovation have propelled the lender past rivals such as Garanti BBVA in recent years, as well as making a substantial contribution to its bottom line.
Akbank boasts five million active users of its digital channels, while take-up of mobile banking services topped 60% last year. Growth in the number of mobile banking users has slowed slightly from the initial highs but is still running at around 20% a year.
The conversion of this digital penetration into sales has been particularly impressive, with 70% of general purpose loans and around half of credit card sales taking place outside branches. This has not only boosted fee generation – by 30% last year, even allowing for inflation of around 20% in Turkey – but also driven a substantial reduction in costs.
Combined with optimization and upgrading of its physical network, including the introduction last year of a new digital-focused branch format, the increased uptake of digital products helped Akbank bring its cost-to-income ratio down to a sector-beating 32.3% in 2018.
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| Hakan Binbasgil |
Under chief executive Hakan Binbasgil, Akbank has also led the way in engagement with fintechs. Not only was it the first bank in Turkey to establish an open banking platform, it also created an innovation centre at its Istanbul headquarters – called Akbank Lab – as early as 2016.
The facility, which has its own budget and resources, is tasked with sourcing and partnering with fintechs from around the world to work on priority areas identified by Akbank’s management. To date, these have included AI, machine learning, payment systems and blockchain technology.
This has already produced results. In 2017, Akbank became the first bank in Turkey to implement international money transfers on the blockchain through a partnership with Ripple. The lender is also working with Silicon Valley firm Zest Finance to improve the use of big data in credit decisions.
Other recent innovations include the launch of Axess Mobile, an app that allows retail customers to create targeted offers to match their mood, from savings products to holiday planning services. Akbank also broke new ground last year with the integration of a mobile phone store into its banking app.
The combination of pioneering technology, openness to collaboration and measurable bottom line impact from digital investment makes Akbank a worthy winner of this year’s award for CEE’s best digital bank.
