VCB Take A Tailor-Made Approach To Banking
Victoria Commercial Bank’s targeted approach to their clients has ensured 95-97% retention since its foundation.
Growth has been consistent over the last fifteen years, with a quick bounce back from the initial economic decline that followed the COVID-19 outbreak.
The bank now searches to better serve its niche market by establishing its identity as one of the sector’s leading technological forces.
Since its foundation thirty four years ago, the goal for VCB has been to be Kenya’s leading private bank. Moving away from retail banking and focusing on “family run enterprises and those who had a certain defined model and certain defined turnovers”, the aim has been to corner a niche rather than try and cover as much of the market as possible. CEO, Dr Yogesh Pattni goes on to explain that VCB “wanted to establish a bank which would be a highly service-oriented one, a bank which would understand the clients’ needs and provide tailor-made solutions. We firmly believe that a one glove fits all cannot work in a highly competitive era.” Therefore, a distinctive approach to its clients is perhaps the bank’s defining factor. Dr Pattni explains the discrepancy between VCB and other institutions by saying that VCB “works the other way around”, targeting their clients, doing their own due diligence and inviting clients to join based on their own research, rather than leaving the door open for anyone to open an account. Once they’re onboard, VCB works on enrichment initiatives such as the online training offered to clients on how to protect themselves against fraud, which in turn contributes to overall security across the bank’s network. The result of such programmes and the targeted client approach has yielded 95-97% retention rates. It is these retention rates which Dr Pattni attributes as being the key factor in the bank’s consistent growth over the last fifteen years, as a “chain-reaction” of customer recommendations is behind the growth which has brought them to where they are today.
Of course, 2020 has presented a uniquely challenging time for companies across the board, and VCB is no different.
Nonetheless, the bank was able to make gains in total assets, customer deposits, loans and advances, shareholders’ equity, and net interest income last year, according to the bank’s yearly report.
The recovery has continued into this year, with an upward trend in cash flows coming in from August 2020-February 2021.
Ultimately, the bank has been able to restabilize the previous trajectory and align itself with its original projections within a short space of time following the initial pandemic-induced slump.
Given the growth of the fintech sector in the region, and the general global centrality of technology in the finance sector, being a leading technological force in the market is a quality that VCB prides itself on. Dr Pattni underlines that they “put great emphasis on innovative products and their applicability to the local market. The bank’s Board of Directors has recognized this critical component to the future of any business and allocated a substantial budget towards technology software products for the banking industry.” The advantages of the evolving systems have been crucial to the pandemic response, as clients have simply not needed to go to their local branches in person. Such advances are also contributing to a positive environmental impact, as paper usage has been slashed as a result.
“We see ourselves as being one of the leading institutions as far as technological products are concerned and we still want to maintain the advantage that we've created over the years on service levels and specialization on corporate and high network clients within a niche model market”
A recent collaboration with SwedFund has contributed significantly to VCB’s CSR programmes. The funding from the collaboration with the development arm of the Swedish government has brought additional funding for the bank itself, but also for the women’s empowerment programmes which Dr Pattni talks us through.
“With partners like Swedfund, we have training programmes for women within the bank and as a result of this training we have effected changes that have positively affected the entire organization. Recently, on Women’s Day we held a Pop-up Women’s day market and fully sponsored almost 50 women groups”.
Looking to the future, the ambitions for VCB are focused on both technology and going up a level. Dr Pattin explains “we definitely see ourselves being in the tier 2 level.
We see ourselves as being one of the leading institutions as far as technological products are concerned and we still want to maintain the advantage that we've created over the years on service levels and specialization on corporate and high network clients within a niche model market”.
In order to reach this tier 2 level target, possible acquisition of another institution is highlighted by Dr Pattin as one of the possible routes to their primary objective. Nonetheless, as they move towards this target, and also look to establish themselves as a technological leader in Kenya’s finance sector, focus remains on — “service levels and specialization on corporate and high network clients within a niche model market” — where the bank has traditionally excelled.