Latest / FintechOS Evolv / A CEO Perspective on Banking Growth and Opportunity in Moldova

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A CEO Perspective on Banking Growth and Opportunity in Moldova · FintechOS Evolv

0:06
So, hello and a warm welcome to the FintechOS Evolve podcast.
0:10
You'll notice we're in very different surroundings today.
0:14
I've taken Evolve on tour to Tushanau in Moldova.
0:19
And the reason I've done that is to have Alex Pickler here, the CEO of MoldingCon
0:24
Bank, come sit with us, share his thoughts and his insights into banking in Moldova. Welcome.
0:32
Thank you. And we're going to be discussing quite a few themes here today, Alex.
0:38
Modernization, digital transformation, technology strategy. I'm sure we'll touch
0:44
on a little bit of regulation.
0:45
And of course, a podcast isn't a podcast if we don't talk about AI at some point as well.
0:51
So, you know, let's get started because at Mould Income Bank, Alex, you know,
0:57
You've gone through quite a significant digital transformation.
1:01
Why don't you talk us through a bit of that, what the challenges were,
1:04
what went right, what went wrong. I'm sure lots went wrong.
1:07
And maybe some of the learnings for some of the viewers and listeners here,
1:11
certainly in Moldova, to take away.
1:13
Maybe I'll tell you two words about myself. I'm in banking now for 36 years.
1:18
You don't look like you have.
1:19
Thank you very much. Too young. Yeah, I started at 11.
1:24
And i started my
1:28
career in austria then went to central eastern
1:31
europe i'm a ceo now for
1:34
almost 18 years in different banks had
1:37
a lot of a lot of interesting countries like western balkans
1:40
belgrade kazakhstan uzbekistan and
1:44
now russia to poland now moldova moldova is a very interesting country it's
1:52
on the frontier now with war in ukraine very important now we'll have elections
1:58
in two weeks so we are very very much hoping that we keep the european path,
2:03
molding con bank here is the second largest bank um we are more known as the
2:08
people people's bank we are not so advanced in digitalization so this is why
2:13
we want to go for it absolutely we need to go for it. Yeah. So I'm here now for three years.
2:18
Two and a half years ago, we started implementing a new core system.
2:24
Which is now working nicely, but doesn't do any miracles.
2:31
So the miracles come with our application, with our IT people.
2:36
And it is a tough path because we are very bureaucratic.
2:41
I mean, the whole country is bureaucratic. That's a heritage of the Soviet Union.
2:46
And luckily, I know a little bit about that and I know a little bit how to break
2:50
it. And now we have a very innovative team, particularly in IT.
2:55
We are trying Agile. And so we're trying it because, yes, the real Agile is miles away.
3:03
It's interesting, though, because when people talk about Agile,
3:06
in my experience sometimes,
3:08
is that agility through transformation is often a path well trodden until it
3:14
gets to kind of the Exco level, where suddenly they want that waterfall approach.
3:19
So it's quite interesting you're talking about it no bureaucracy is
3:22
generally i tell the people bureaucracy is your friend you
3:25
do everything according to the book yeah it's your get
3:28
out of jail card yeah but if you do it too
3:31
much uh you are not getting anywhere so that's that's the problem there and
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um uh hierarchy and agility don't really don't really fit together sure so So
3:43
we are trying to jump from here to there for the time being quite successful.
3:49
But the major problems we faced in the getting more digitalized was that...
4:01
The old systems didn't work well together with the new systems.
4:06
Then we are heavily regulated.
4:08
We have anti-money laundering. We are a frontier state here.
4:13
So this is very important, anti-terrorism financing, and you have it.
4:18
Then we have this small territory of Transnistria here, which is,
4:23
they declare themselves their own state.
4:26
Luckily for them, nobody else did recognize them, not even Russia.
4:31
And we cannot do banking with them because it's
4:35
not allowed to send money there it's not allowed to receive money from
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there our bank mold income bank was involved in
4:41
the money laundering scandal before it was privatized so
4:44
you have immediately we have
4:47
to be more catholic absolutely you have to be whiter than white it
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has to be absolutely i get calls from customers they
4:53
say oh couldn't we do this and that and this and that and
4:56
i say don't even talk to me definitely no no
4:59
yeah in fact you're probably going to be regulated to even
5:02
higher level than some of your competitors because of the the
5:05
background yes i think this is this is
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the way but this is what we want to be we didn't have a dollar account
5:11
for very many years now we got it back we're working now with international
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organizations just today assigned a uh an agreement with the european investment
5:22
bank so we are slowly slowly getting back on the international landscape and
5:27
of course our But digitalization is necessary there too,
5:30
because we have a lot of customers outside of the country, the well-known diaspora.
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And it's big because a lot of young people and even older people are leaving
5:40
the country and working abroad.
5:42
So you started with a core transformation. It sounds like that went okay.
5:46
That went okay, yeah. And now you're looking at how do you start to digitize
5:49
maybe the front end of the customer experience and the colleague experience
5:52
to try and bring some of that digitalisation through processes so that you can get...
6:00
More growth uh speed to market your products out quicker um
6:03
ultimately expert like that customer experience but
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is that the bit that you're trying to do now that's what we're trying and
6:09
i guess the systems aren't now because the big mistake was
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as always is we um adapted um
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we didn't adapt our processes yeah we adapted the
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system to our processes and our processes are bad
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yeah they're old they're complicated and
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now we are thinking how to redo the processes which needs
6:28
a reprogramming there too and of course the user
6:31
experience is not that it's getting.
6:34
Better we can do things but still you
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spent a whole bunch of money getting a brand new core in
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and to make you go faster but actually
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you haven't changed the fundamental issues to get faster so
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i always use the analogy you've heard it before but you you
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buy a ferrari but drive it like a fiat that's exactly
6:52
it's exactly what it is and uh unfortunately a
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lot of banks are doing that absolutely yeah now we
6:58
have to reverse this process which is possible but it's a little
7:01
bit more cumbersome but we are we're fine with it it's interesting
7:04
because with most transformations comes an element of dysfunction
7:08
and uh chaos kind of organized chaos
7:11
in a bank and it's important to bring your colleagues along that journey with
7:15
you so if they've gone through a core transformation and for two years it's
7:19
a long period of time and they haven't seen things get better how hard is that
7:24
to kind of re-energize that your people to say things are getting better with
7:29
the front-end digitalization?
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They see it a little bit now.
7:34
Now we are at the stage that we, I mean, we do have the largest branch network
7:40
in the country and we want to keep it.
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So we really want to do the bricks and the clicks.
7:45
So for the time being, it is like that, that customers are queuing in front of the ATM.
7:54
So we have that. We wouldn't believe that. But I saw the queues.
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So they told me I didn't believe it.
8:01
Then I went there. I saw it even in Chichineau. Yeah.
8:04
So then they take the money. They go into the branch. They queue again.
8:09
And then they make a payment.
8:13
And now we have a person who stands there at the entrance telling them,
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well, what do you want to do?
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You want to just take the money or you want to make a payment,
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municipal payment, for example?
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And if they say municipal payment, they say, well, come here.
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You have our application.
8:28
We'll show you how you can do that. And that's quicker for you,
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even cheaper because you have a certain fee for that.
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And why don't you do that? So we want to transform our cashiers into people
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who consult our customers.
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So that slowly moves.
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Of course, it has the problem because a lot of people in the branch say,
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oh, you want to get rid of my job.
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And this is where I'm coming in. I'm traveling quite a lot to the branches.
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I'm telling them, well, your job will vanish within one year.
9:07
But you won't. But you have to change.
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You become a consultant to the customer.
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And we want you to talk to the customer because this was the mistake which Germany
9:18
made or Austria made in the 90s.
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They said, oh, no, no, we put the machines there. And behind that, the people.
9:24
And then everyone was going to the machines and they didn't like it and they hated it.
9:28
And all of a sudden the cross-sell dropped because no one was coming to the people.
9:34
And they said, well, I don't see my customer anymore. Transformation has always been...
9:40
It's about evolving as a business, as an entity, and as human beings,
9:44
right? Because you've been in bank a long time. I've been in bank a long time.
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You can imagine the transformations and the digitalizations that the banks we've
9:52
worked for has gone through and how we have evolved as individuals.
9:55
My first job at a bank was putting envelopes in stuff in statements and envelopes.
10:02
I did that too. So I hated it.
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And then you're getting checks, but then a check image came along.
10:08
But as individuals, you grow, you become more skilled, and you evolve as much as the technology does.
10:14
But the balance is, as you quite like put it, it's the blend between the human
10:19
and the technology, so that your customers and your colleagues still feel that
10:23
human touch. Right. And that's the balance.
10:26
And I think this is the chance for the banks.
10:30
I have to admit that some six seven years ago i thought okay the banks will die.
10:38
Blockchain will take take everything and it
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didn't happen and why because yeah
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we all want to cut out the middleman yeah that's that's fair
10:48
we don't want to pay for that but then if we
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have a problem immediately we need a person we
10:54
need a telephone number blockchain doesn't have a
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telephone number so bitcoin neither yeah so
10:59
ether doesn't have a telephone number so you do something wrong you take a huge
11:05
responsibility on you yeah if you do do it wrong on the on the application of
11:10
the bank and you put the zero too much or too less you call the bank and say
11:14
hey guys i made a mistake and if they have a good call center which we are trying to.
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They will tell you oh yeah let me stop that
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and let's change that and do that so i do
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think think really banks can survive
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they will survive because this this is
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the point where you really get the customer yeah you solve a
11:33
problem yeah for him i think you know you see you're the second
11:36
biggest bank here and so you're gonna you're market leading in
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a way so you're you're showing you know
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other banks the way to kind of blend that digitization and
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and human element and as you so you've done your core and now
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you do your front end so it's about redesigning those processes and
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procedures and those touch points bringing digital
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tools you know fintech players whatever it might be but then designing those
11:58
journeys so that every element has a human off ramp it has a touch point for
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your branch for your call center so that your customer is nowhere to go and
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they can be they can be relationship managed throughout their whatever product
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journey they're going to Exactly.
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That's the idea. And we want to turn a lot of our cashiers now in the branches, and we have about 1,000.
12:23
800 staff so quite a
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lot of people and we want to turn them into call center
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employees yeah to the cashiers in the branches because
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then we can say yeah and if you really have a problem come to me i'm sitting
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500 meters from you in eddie nets for example and then then they say oh really
12:42
and those those people in the branch you think of the years and wealth experience
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they've got of the products, the way banks work.
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They are the best people to be able to speak to, to get things done,
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often they know the ways around things.
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And they don't want to come to Chisinau and work in the classical setting of a call center.
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And they wouldn't like it. And we were thinking of outsourcing call centers
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as everyone does. And then you say, okay, fine.
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Then you have the Indian speaking Romanian.
13:13
Sorry to be there.
13:16
It's interesting because transformation, isn't about
13:19
isn't just about technology it is a it is it's
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about culture it's a culture of your business fully agree
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culture there eats uh the technology
13:28
if necessary and if you cannot put that together you
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you are totally losing losing the customers and that's basically the chance
13:35
for the banks because if you look look around all the neo banks all the flashy
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wonderful applications you get around you don't need a bank yeah unless you
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have a personal relationship why i'm still banking with my old bank from 40 years ago,
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because I know the lady and I can call her and tell her, listen,
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I have a problem with doing there and there and there.
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And can you please help me? And she says, yes, I can. And the next time you come and sign it.
14:03
I cannot do that with anyone it's back to relationships again yeah
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that's again the relationship and then i don't look at
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the fees they're charging me yeah you just ignore that bit
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that's relationship goes downhill really quickly i say well there's a
14:14
value in that that i can call um yeah for
14:18
that i have to pay okay fine yeah so see that sounds
14:20
like a moldencomb bank um you're definitely using technology
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as an as an enabler to to
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kind of push your business strategy along to the next few years so
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if you could if you could start to visualize
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that that next five years of of using
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technology where where do you think you'll get to obviously you have to redesign your journeys um
14:40
and possibly products as well yes as as customer behavior and expectations are
14:45
starting to change are you sitting down with your fellow ex-co and having that
14:48
discussion around that strategy yes we're doing we're doing that very very heavily
14:53
um and And we are fighting a lot about that. Yeah.
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And that's a good fight. That's a good fight. Yeah. Because if we all have one
15:01
opinion, we say, yeah, we go there, then we don't get there.
15:04
Yeah. So we are having a lot of discussions on that.
15:08
Now, for the time being, we envision kind of a very modern branch where you
15:14
sit side by side with a client. The client comes in with a mobile phone.
15:19
Can you set that up with this with this municipal payment or can you help me
15:23
on that or how do i get a loan with that and and we're doing it yeah so i think
15:28
it's really important then to,
15:30
have um your journeys and your products to to a point where it's omnichannel
15:33
so a customer can start their process on their mobile phone or their ipad or
15:38
laptop at home on the train in the car and then be able to come into the branch
15:42
and pick up exactly where they left off with that little bit of help and complete that journey.
15:48
And it's a difference. I mean, I see that with my kids. If I tell them,
15:51
well, go to the bank until they say, oh, no, I don't want to go in a bank. Absolutely.
15:55
So if I cannot do that online, I'm not doing it.
15:59
I get that. So that's different.
16:02
Pensioneers, they are bored. They want to go to the bank there.
16:08
But we're trying to get them on cards.
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So, we had a good project in Bälz, which is the second largest city here,
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and they have these buses, and we put two terminals in the buses where you can pay with a card.
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And we told the pensioners, well, we have now a special promotion instead of,
16:34
I don't remember, was it six lei?
16:37
Now it costs you three lei if you pay with a card.
16:40
So, um, trying to drive that adoption, that's sense, right? What's the bus tickets
16:46
cost. So we'll never make money with that. Yeah.
16:48
But we bring them into the, uh, the card, um, empire, so to say,
16:55
teach them how to use them.
16:57
Then we tell them, okay, you go then to the supermarket, you get a discount
17:00
of 7%, whatever for a pensioner.
17:03
That's a lot of money, but it's an investment needed because
17:06
a terminal costs between 100 or 200 euros and
17:10
um yeah so so there are a
17:13
lot of a lot of steps uh towards there yeah
17:16
i mean even in the story you said a lot about people queuing up outside
17:19
the atm taking their money out and then going to send it
17:22
in within the branch driving that
17:24
adoption curve for any segment of customer i
17:27
mean my wife's um um mom sorry
17:31
mother-in-law she she still won't use a
17:34
cashier she just doesn't trust them so she's one of those right and yet
17:38
even my wife she's the same age as me won't use
17:41
apple pay she'll still get her card out and i still
17:45
struggle telling us that this is safer it's more secure right you're
17:48
trying to drive this adoption but some behaviors are
17:51
just so heavy set right but that's why it's so
17:53
interesting here you're trying to provide some incentives to
17:57
to get drive that adoption rather than say here's a card i'm
18:00
going to switch off the old way and you're stuck with it actually trying
18:03
to help your customers slowly but surely to
18:07
to evolve and to adapt into into new ways and you know here in Moldova we are
18:11
lucky because even pensioners mostly have relatives or children or grandchildren
18:17
abroad so they know how to do video conferencing so they're used kind of to
18:22
a certain way of using technology and we tell them, well.
18:26
If you can use, earlier we told them, if you can use Skype.
18:29
You can use the mobile app. Yeah, yeah, absolutely.
18:32
And I guess, once you start getting...
18:35
Your clients onto the mobile app or into other
18:38
ways of banking it will drive hopefully you'll
18:42
find a new way of servicing them into kind
18:45
of uber personalized service rather than this one size fits all more kind of
18:52
life-centric products and services hitting your clients at the right part of
18:57
their life cycle for products and services that are relevant to them at that
19:01
point absolutely Absolutely.
19:03
This is the key, I think, to really get the clients there into their life.
19:10
This is too, if we, I mean, badly said, if we have five contact points with
19:15
the clients with their life, it is very improbable that they will change the
19:19
bank because they know, oh no, now I have to redo all these other things.
19:24
So we secure the client and at the end of the day, it's convenience.
19:28
So we have to be very convenient to the client.
19:31
We have to provide the full service. We have to say, well, what I do like in the UK, for example,
19:37
you know, that that kind of difficult moment when there's a round of people
19:43
and then you ask for the bill and it takes five minutes and then the waiter
19:47
comes and you look at the bill and everyone looks at you or looks on the side.
19:52
What is possible there with the reservation, you say, okay, this is my card
19:57
number. I will give you a tip of, I don't know, five, seven percent.
20:01
And then when we're finished, we're finished. We just leave. Yeah, yeah.
20:05
So that's all possible. And then even easier when you say, well,
20:09
we'll share it. Yeah, they split the bill.
20:12
No, they don't split the bill, but you have it in your application.
20:15
You say, well, the bill is, I don't know, 70 euros or 70 pounds.
20:20
So you have three people there you uh
20:24
require you send them a requirement
20:27
please pay me 20 yeah and and
20:30
that's it yeah yeah so convenience and
20:33
that's that's that's you've seen that through big like revolute and some of
20:36
the kind of leo banks that are doing that and they're really really good albeit
20:40
the flip side is fantastic on the technology side great user experience i mean
20:45
doing wonders now but it goes back to your point of who do you call when it goes wrong Right,
20:50
right. Quite got the back office bit, yeah.
20:53
That's really the problem. And then in addition, you have a lot of fraudsters running around.
20:59
I mean, we now have a genius way.
21:04
We discovered a falling fraud, which is very, very intelligent.
21:08
And two, a problem with the convenience. Because mostly you,
21:11
on the phone, you sign kind of with your face. Yeah. Yeah.
21:17
So what did they do? They called and said, we are from the telecom,
21:21
we have to redo your eSIM, we have to upgrade it, otherwise it won't work.
21:28
So you think, yeah, well, most probably, yes.
21:30
They say, will you grant us access to your phone?
21:33
And then you say, okay. And even a bank employee did that, who works with us in the bank.
21:42
And she granted them access. They blackened the screen and had there something, well, reloading.
21:48
And then they went into the mobile application. They said, can you please tell
21:53
us how much is loaded already?
21:56
And there was 5%. And she said, yeah, 5%. Signature.
22:01
Signature. Signature. It took three hours. I mean, this, sorry,
22:05
lady, unfortunately, didn't drop the phone or whatever.
22:09
And they managed in these three hours to rid
22:12
her of all her savings take out a loan in her name yeah
22:15
and the money's gone and always when when
22:18
they said well can you please look how much it is how much
22:21
is now 30 30 click face then
22:25
the bank wrote to her wrote sms but they all cashed in these sms's and just
22:30
had the screen black clever it is clever you think of all the technology advances
22:35
that we use to better customers experience you've got to remember but there's
22:38
also bad actors out there that are exactly the same technology advancements
22:42
to take advantage. Yep. You see it all the time.
22:45
We'll talk about AI later on, but AI is exactly the same thing.
22:48
We're all striving for a way to use AI.
22:50
And I think we've got to be very cognizant of the fact that these bad actors
22:53
are going to use AI to do that exact same scenario as well.
22:57
I guess it kind of leads me on to the next point around kind of technical advancements.
23:03
And, you know, Moldova, you've got a lot of experience in Moldova and you're
23:06
going to have your views on what technical advances are coming.
23:10
But how do you and your team keep up to speed of all the trends and what's coming up next?
23:16
And how do you then decide whether to implement them or whether to build them
23:20
yourself or buy them or partner with them? We are traveling quite a lot.
23:24
We just arranged now a travel of all managing board members to a bank in Europe
23:32
where we know that they are well combined combining the.
23:39
Personal uh service with the digital yeah
23:42
and uh they're using ai much much more than we
23:45
do yeah and we we go there from practitioner to.
23:48
Practitioner and say how do you really do it that's great yeah so.
23:51
We are spending quite a lot of money to to
23:54
get there then we are at fairs um i
23:57
was in uh dubai recently then
24:01
i'm going to to to singapore and really
24:04
see okay what are you doing there yeah so constant learning
24:07
constantly looking around but to seeing what
24:10
doesn't work for example uh some of
24:14
the new banks they have problems yeah they they
24:17
are selling now the customer data because this
24:20
is this is wonderful this is definitely not what i i
24:23
want to do and at the end of the day banking is
24:26
a trust business sure is so we need to
24:29
get the trust of the customer the trust is easily lost so.
24:32
We have to constantly remain there yeah
24:35
we have this institutional trust which is a good idea i
24:38
mean if you have 10 000 pounds to
24:42
save and want to put it away for three years
24:45
you don't go to your neighbor whom you know for 30 years
24:48
and say would you please keep that for me and uh give
24:51
pay me maybe some interest no but you go to some
24:54
some institution where there's written bank you
24:57
talk to the lady mostly it's their ladies and without
25:00
any hesitation give her the money yeah yeah so
25:04
this is the institutional trust yeah but it's if it's lost if you have a fraudsters
25:09
there if you have problems then this is very difficult to regain i think it's
25:12
great that you as a leadership team go and travel to other countries other banks
25:18
and talk very openly about.
25:21
What they're doing, what they're doing well, what they're not doing so well
25:25
and keeping up to speed for your roadshows and these innovation centres because
25:30
I think that just shows a real open-mindedness from yourself and your team to look.
25:38
We've been banking a long time. We don't know everything right.
25:41
And we're not technologists, we're bankers.
25:44
Fundamentally, we're bankers. We're not technologists, but we're learning.
25:48
Yeah, that means we're conservative.
25:49
Exactly, exactly. Yeah, and we're risk averse.
25:52
Exactly. But the fact that you're open-minded and say, you know,
25:55
actually, I don't know what I don't know.
25:57
And rather than try and make it up as you go along and make a lot of mistakes,
26:00
you're able to say, you know what, let's go talk to people that do and go learn from them.
26:04
And you'll make Molnir Khan Bank
26:07
a far better place and also you'll you'll drive that innovation
26:10
across other banks within the country as well yeah for the
26:13
time being we are not the leader in innovation but we too
26:16
look at the competition we see what they are doing so we're learning
26:19
that too and sometimes you know being a follower is a good strategy it is indeed
26:23
so so let's talk about some of the barriers to being that innovation center
26:27
right um it wouldn't be a lot it wouldn't it wouldn't didn't think it'd be a
26:30
long time for I brought up the regulators and the reg and the regular say relicative
26:34
frameworks that may or may not exist here in Moldova.
26:37
Do you see some of those regulatory issues really pausing innovation,
26:45
or do you see a pathway where banks and regulators in Moldova can work together to really push through?
26:53
Well, I'm trying. I know you're quite outspoken on this.
26:57
I'm trying to talk very, very much to the regulator.
27:01
The regulator is even more conservative and more restrictive,
27:06
which from a certain point of view, I do understand.
27:10
From the other point of view, it's very difficult to work with them,
27:14
particularly on the anti-money laundering, on these issues.
27:20
Because what I was, I mean, crypto assets are forbidden in the country.
27:26
For three years, I'm talking to them and say, well, give us a chance. Take us into a sandbox.
27:34
Do it with us. Try it with us. Now we have Mika.
27:38
Mika will be coming. You want to join the European Union. I was talking to them
27:42
just last week. They were saying, yeah, we have our own Mika now ready to go to the parliament.
27:50
And I said, please discuss that with us. Talk with us about it.
27:55
There can be easy ways. I mean, Europe is working with that.
28:00
There are fintechs who know how to deal with it.
28:02
So don't just make a law and then say, oh, it doesn't work.
28:06
And don't make a law just to make it so difficult that it's not possible.
28:09
I mean, normally you say the U.S.
28:12
Is innovating, China is copying, and Europe is regulating.
28:15
Yeah, thank you. That's what we are. But there's some plus in the regulation.
28:19
If you do it right, you can get it right.
28:23
So, I mean, a lot of people here are investing in cryptoassets.
28:28
Which i think to be a good idea but now they
28:31
do it on the on the kind of the hidden hidden side
28:33
it's it's it's not allowed yeah and uh now we
28:36
want to get that uh legal we want
28:39
to protect them too from fraudsters yeah and
28:43
um uh here there is the possibility
28:46
i think we're on a good path we're not yet there but
28:49
uh they are listening okay so actually the regulator
28:52
is quite open to having kind of joint sandboxes
28:55
with with banks we hope or they just
28:58
about to get there they hope so we will i'm selling this
29:02
idea that's a big leap forward that's that'll be good yeah it's happened
29:05
in england so that that that really works well so i
29:08
see it's good to hear it's going to happen here i think you'll see some some more positive
29:11
progress if that happens i don't think
29:13
so yes yeah because often you know
29:16
technology ai innovation especially in
29:20
today's world the pace of it is so quick now
29:24
even today's idea is he's just he's
29:26
a newspaper it's all right so not only
29:29
have you got to deal with the pace of innovation but you know regulation
29:33
regular regulatory bodies and regulations is always going to
29:35
be lacking behind so there could be this issue where innovation runs at this
29:41
pace and regulations kind of runs at this pace it's the the vast the gulf between
29:46
is longer and longer and longer so you know they will never catch up but that's
29:51
uh To get really this distance smaller,
29:54
I think that's the issue.
29:56
And have you seen a similar thing? You listed off many, many countries you've
30:01
worked in over your 35 years.
30:03
Where do you place Moldova, then, in terms of that lag behind?
30:08
Are they further behind than some of the other banks and countries you've worked
30:14
in, or are they more progressive?
30:17
No, unfortunately, they are further behind, which is an opportunity,
30:22
too, because you can leapfrog some things.
30:25
You don't have to go through the checks and then the cars and everything.
30:29
You can immediately jump through there, like Africa does, for example.
30:33
Yeah. but um or vietnam but um
30:36
yeah it's uh it's a longer way to go yeah because moldova
30:40
is not not so well so well prepared so you're
30:42
pretty well placed because i'm pretty sure when i was researching molding
30:46
con bank and yourself there was a term that was used
30:49
on internet it's not a bad term so don't have to worry that you
30:52
is you is nicknamed a a um
30:55
a sharpshooter somebody who could
30:58
who could solve a problem yeah a real problem
31:01
solver so are you going to be bringing that you
31:04
are bringing it to Moldova but are you going to bring that experience and the fact that you can
31:07
change with some of your problem solving skills
31:10
that the ability to I'm trying and you know this is this
31:13
is why I really decided for this job because what I do like is if I can move
31:19
things in the last three years there was the possibility to move quite a lot
31:23
a lot of things and we're still moving on so that that's interesting if you
31:27
work in a bank in Austria you move small you have very very small steps.
31:33
And even if you are, I was heading up a bank in Austria, even if you want to
31:37
do something, it's extremely difficult because the environment is much, much more restrictive.
31:43
Here, jumps are possible. Yeah, you have the regulator. Yeah,
31:46
you have other problems.
31:47
But within the bank, we made quite some interesting steps.
31:51
And this will remain. And this is what makes me going, kind of.
31:56
So we've kind of started touching on AI. Let's go there now.
32:02
Right. Let's go there now. so yeah,
32:04
Obviously, you've got a bit of a pathway to go in terms of digitizing that front end.
32:09
But let's assume that's done. You've done a great job.
32:13
How do you then start deploying AI in some of those journeys?
32:18
Or internal journeys or external ones? Yeah.
32:22
I mean, you will not find a bank who says, no, no, no, we don't do AI.
32:28
But if you then scratch a little bit and look into the reality,
32:32
I mean, AI for them means that you have access to ChatGPT.
32:37
Great. Yeah.
32:38
Which doesn't really help. Can your staff actually access ChatGPT?
32:43
Do you allow them to use it?
32:44
Yes, we do allow them to use it. Good. We have several licenses there for the more upgraded version.
32:52
And we tell them, please do use it.
32:56
But we make a short training with them, telling them what AI can do and what
33:03
it can't do. So, you set the guardrails, the mitigations, and you set the rules in which they use it.
33:07
We always tell them, be careful, we have banking secrecy.
33:10
So, you cannot, it's easy to say, oh, we'll throw our portfolio at AI and ask
33:15
them, so where are our risk factors? No, you cannot do that.
33:20
We even had a discussion on our internal regulations. We have about 400 internal regulations.
33:28
No person in the bank really knows them all. And they're definitely contradictory. Yeah.
33:34
So what do we want to do now to load them up into AI and say,
33:39
let's make a bot and then ask the bot from a cashier perspective,
33:46
this is a payment now going there, there, there, there. Can we do that?
33:49
Is this according to all the rules? And the bot then says, yes, you can. No, you can't.
33:54
So this works fine, but still we are not doing it yet.
33:58
We are having discussions if we are giving too much information from ourselves
34:03
to AI, to the whole world, basically.
34:07
But if you do that in a restricted area, I mean, you have no additional intelligence.
34:13
And that's what it lives from. Yeah, absolutely.
34:15
It sounds to me like you've set the foundations, you've put the right policies
34:19
in place, some governance around it as well, which is really important.
34:23
Pinpointed a few good use cases that's a good use it's not
34:26
the most exciting one no actually i had a very
34:29
helpful it's incredibly helpful uh i was with a cto it's
34:33
actually on a on a previous podcast where i said if you
34:35
had all the money in the world and you you could you could pick one use case because
34:38
there's millions right what would you do it is exactly that
34:41
use case because really the amount of time
34:44
energy effort internal user have sifting through
34:48
policies that are often outdated they're hundreds of pages long to
34:52
speed up decision making actually having that
34:54
conversational element with you know your policy back
34:57
book is actually incredible and actually
35:00
if you couldn't get that library installed you can then do some really good
35:05
stuff with that you could start benchmarking customer um origination loan request
35:11
against the back book and start making speedy decisions but that's the foundation
35:15
it's right so you've got to get that right first Yeah.
35:19
So we are heavily trying to do that. I mean, our programmers are using it, of course.
35:23
And I'm a little bit uncertain if we all have the controls there because,
35:29
you know, one wrong line of code and you're in problems and it's difficult to test.
35:35
What we're using uh ai is more
35:38
and more is for testing yeah testing that's that's
35:41
wonderful you have a crawler who goes there over over test scenarios and you
35:46
have it and you don't have valuable people testing three four days i used to
35:51
love writing test scripts i didn't but i used to write loads of test scripts
35:55
but the fact you can just load these scenarios into an ai and it runs it for you is just,
35:59
again, saves sometimes days of effort,
36:02
but I guess with using AI though, it comes, there comes some risks around ethics
36:08
and ensuring that the, the, the, the eyes are pulling out the right thing,
36:12
the consistency, um, the transparency.
36:15
From a CEO's perspective, you and your executive team are on the hook for that.
36:21
Yes, we do see the problem with AI, particularly regarding responsibility and accountability.
36:27
So what if they do things wrong? So I'm kind of interested in mathematics.
36:34
I do these math problems, which come from right, left, up and down from the
36:38
mathematics Olympiad, just because I'm interested in that.
36:41
And you check that with AI, and you get the wrong answer. and you get a very
36:45
confident wrong answer. You do, yes.
36:48
And then you say, no, sorry, that's wrong. They say, yeah, you're right, that was wrong.
36:52
This is the solution, and it's again wrong. So they're getting better, of course.
36:56
But then, this is ridiculous. I mean, mathematic solutions, okay, fine.
37:02
But if you do that, then, for example, if we do a payment, if the bot says,
37:08
yeah, you can go with the payment, and then the regulator says,
37:11
well, you cannot, and then we check it, and yeah, you cannot.
37:14
And the bot just was mistaken.
37:18
Who takes the responsibility? And this is a heightened responsibility and accountability
37:23
for the management because I signed that in.
37:27
I allowed that. So I take the full responsibility for that. And two, you have all the biases.
37:32
So we had a case in Austria where they had to throw away an AI which they had
37:38
employed for HR where they tested it.
37:46
Having an IT job, exactly the same CV, but one's for a female,
37:51
one for a male, you know that.
37:53
And then the AI rejected all the females because they said, well,
37:57
statistically, 90% of IT workers are male, so why bother?
38:01
Yeah, yeah, that's right, yeah. I mean, there's been some...
38:03
So the bias is then difficult.
38:05
And I don't think you can program the bias out.
38:09
That's not possible. No. No. Again, we've talked about it so many times today.
38:14
It is that blend between digital and human.
38:17
You still need that human lens, that emotion, that intuition.
38:23
The banker's intuition is so important. It is. Yes. They can't put a price on that.
38:28
So you still need that overlay. And I wonder, with any new tool that comes into
38:33
our sector, there's an element of dual running.
38:35
There's an element of, let's see how the AI does. let's
38:39
see how the human does it's a perfect test but but
38:42
then you you need the a little bit
38:44
the human too and then if you rely too much you take
38:47
a huge uh responsibility and yeah again something goes wrong who's to blame
38:53
yeah exactly if you especially from a risk perspective in in say they're going
38:57
to jail they get it wrong and they're getting fined personally so it's a it's
39:01
a massive liability i'll get the fine i cannot tell the national bank okay go go after.
39:08
It would take a brave AI to go up against you in terms of financial analysis,
39:12
I can well imagine you typing away financial ratios and going, no, that's wrong.
39:17
I can well imagine you doing that so many times. I bet you've taken a lot of fun in doing that.
39:23
So, next five years, last question on AI, I'm not going to talk about AI after this.
39:29
Where do you see Moldingcom Bank and Moldova generally adopting AI?
39:35
Do you see it being a slow curve or do you see it being one big bang?
39:38
As always, no, no, I don't think there will be a big bang. But there's a future
39:42
for AI here. There is, definitely there's a future.
39:45
And if they are clever enough, I mean, they're very well doing on the digitalization.
39:49
Now we have this Evo, which is all the electronic documents and so on.
39:55
So that's doing very well. it's not all the all
39:57
the dots connected and not all the t's
40:00
are um are crossed but they
40:04
can get into that and as soon as you have such a system ai is the logical next
40:08
step yeah and then you can can do that and then you have to be careful okay
40:13
do you do social profiling do you do racial profiling do you say well you're
40:17
living in this area this is why you don't get a mortgage yeah So,
40:22
you need then an officer most probably who does a random check and then goes
40:29
a little bit deeper and does then a general checks on checks and so on.
40:33
I do think it's possible. Yeah.
40:37
Difficult and and i mean luckily we are not in
40:39
the u.s where you are sued then by millions
40:43
of dollars so that won't happen here if we say no i
40:46
mean it's our discretion but um we we should know about that yeah and i guess
40:51
ultimately what underpins ai and that intelligence is the is the data making
40:56
sure that the data that you're sourcing whether it be from open source or from
40:59
your own internal system is clean it's usable it's consumable yep and we all know that i knew.
41:07
It's not the case data is always scrambled and
41:11
it just starts when when someone enters data into
41:14
the into the form and they do it wrongly yeah and then
41:16
then it keeps on for years yeah i have
41:19
not come across a bank in my years that has
41:23
called that has never called one piece of data the same thing through
41:26
various systems it's called a spade it's
41:28
called a shovel it's called a fork it's called a knife it's never
41:31
called one thing because the regulator in that
41:34
wants it in that format your finance director wants it in that format
41:37
yeah coo wants it in that format and suddenly you have this massive
41:40
data dictionary it's pulling this all together no we put it together we have
41:44
now one data czar in the bank uh he's running this uh this uh he's the head
41:51
of the all the data all data has to go over him and we i'm fighting heavily
41:55
that there are other data centers other crms other,
41:59
ways and um yeah we have to centralize that
42:03
and have uh for data governance data star he's going to be
42:05
the most valuable person in your business at some point i'm sure i
42:08
tell you i'm sure he will be okay look we're
42:11
coming to an end um alex it's been fantastic talking to you so i always kind
42:15
of finish this podcast with a couple of kind of open-ended questions and and
42:19
the first one i wanted to post to you was um if you could just solve one problem
42:23
here in moldova one problem whether it be people, process technology,
42:29
culture, whatever it might be, mindset, adoption.
42:34
What's that one thing, if you could wave that magic wand and solve it for Moldova?
42:38
It might not be any of the things I mentioned. It could be just one thing.
42:41
No money. No money needed. Just one thing. Legal system.
42:45
Legal system. Legal system. They have been grappling with that for years.
42:50
They didn't find a good solution.
42:52
I don't know. I'm not the magician who could do that. But if I could do that,
42:58
I would maybe install something like the reconciliation policy like they did in South Africa.
43:05
The problem is, I mean, the system is so rotten, so corrupt,
43:09
that it is very difficult to find judges, public prosecutors,
43:17
lawyers who are not corrupt.
43:19
But that would bring the whole country a huge step forward and show to the population, too.
43:25
I mean, we can do something about that. Do I see a run in politics for Alex at some point?
43:30
No, no way. no no you still no i'm staying
43:33
in the in the the cozy banking or professor alex
43:37
i think could be coming up at some point could be interesting but
43:40
but um yeah so on on a
43:43
side on the side i'm sure it is so um if we're sitting here five years time
43:48
2030 seems a long way away what does um what does success look like to to you
43:54
alex to molding come bank and and to moldova Would be being in the European Union.
44:02
And if not being there, being very closely related to the European Union.
44:09
World Income Bank should be really the people's bank. So thrive in the retail
44:15
sector where we are already almost number one, in some cases number one.
44:22
For me personally it would be to have a real
44:25
to get more agility in the team and to
44:28
have in the team the understanding some problems
44:32
can be solved agile some problems will be solved the old way and to to know
44:37
the difference and to work in in the difference that's fantastic alex appreciate
44:43
your time thank you i've loved my time here was a pleasure we've got tomorrow
44:46
we've got a nice panel tomorrow with a few other folks. Looking forward.
44:49
Thank you very much and I'll see you again soon. Hopefully yes. Thank you. Cheers.