Non-Financial Services: Models to Maximize Effectiveness

Prioritizing NFS Products

Simla Ünal of TEB, whose world-class non-financial services have recently been profiled in a GBA Case Study, shared results from a recent IFC study that found a majority of banks provide non-financial services in order to differentiate themselves in their markets. Three GBA banks then walked the group through their non-financial service offerings for women. Participants learned about RBS’s accelerator program for entrepreneurs, which actively seeks a 50:50 gender split, and about Bank of Palestine’s services for women entrepreneurs, which have overcome vast challenges to reach more than 1,000 women this year. BAC San José shared their NFS experiences in four markets in Central America. All banks found partnerships with local organizations and senior level support to be critical to success.

Key Points

    • Non-financial services include information, education, networking/access to markets and recognition. They should complement the financial offerings of a bank. They are not a marketing effort, not part of CSR and not one-size-fits-all; they require a business strategy in order to ensure sustainability.
    • In 2010 the IFC surveyed 21 banks in 18 countries and found that banks’ main reason for offering non-financial services was to differentiate themselves in their markets.
    • Strategic partnerships allow for less cost to deliver services, allow the bank to reach more people, and also allow access to more knowledge and expertise.
    • Key performance indicators need to be set into business strategy and long-term goals in order for the programs to be sustainable.
    • In the UK, start-ups have increased by 50 percent in the last four years. The majority fail within the first year. Twenty percent of businesses are female-led, and women see more barriers to entry into business.
    • RBS partnered with Entrepreneurial Spark to support the scaling up of start-ups. They opened hubs – “hatcheries” – in 13 RBS buildings all around the UK, where they created space for entrepreneurs to work in the bank’s environment. Working with entrepreneurs in RBS’s premises has changed the culture of the organization and helped them to better understand their customers and be more innovative.
    • The start-ups are allowed to stay in the hatchery for up to 18 months, where they have access to skill-building programs, trainings, finance and support. The gender split in hubs is 50/50.

Non-financial Services 2016 GBA Summit

  • Through the program, RBS has worked with 700 companies, and those companies created 2,000 new jobs in the last year. For companies that have been with them for more than a year, the survival rate is 88 percent.
  • In Costa Rica, 40 percent of MSMEs are led by women, and they are actively finding new solutions to serve MSMEs with innovations in products and services. Almost 40,000 MSMEs in Costa Rica have been trained by BAC through their non-financial services offerings, such as education on business practices, their annual seminar for MSMEs, webinars and mentoring. BAC has also partnered with FMO and Vital Voices to offer one-on-one training.
  • BAC’s key lessons are to be innovative, keep momentum and listen to your customers to be sure you are serving their needs.
  • In Palestine, only 20 percent of accounts are held by women, and most are savings accounts. In addition to a financial offering, Bank of Palestine’s Felestineya program, which means “Palestinian woman,” offers a training component.

 

Non-financial Services 2016 GBA Summit

  • This year, the offering has reached more than 1,000 women. Trainings are held in the branches, which is less intimidating. Thirty percent of participants opened an account or applied for a service right after the sessions.
  • Bank of Palestine partnered with a few key organizations, including a local organization to launch an awards program. They also worked with the IFC to develop their Mini-MBA program (a seven-month, 14-session program to support women-owned businesses) as well as with E&Y to deliver sessions on financial management and taxes. As a result of the program, many women are now included in the formal banking system, and many of them registered as a formal business (with support from the bank).
  • Tips from group discussion included:
    • In order to get participants to show up, charge them money and then give it back when they show up.
    • Engage senior management from the beginning. Ask them to attend sessions and perhaps teach or be judges for business plan contests. They will see the women as potential clients and begin to take them seriously.
    • Banks can teach women how to present themselves seriously in order for banks to take them seriously.
    • Tell women’s stories – narratives have power.

Panels Button

Non-financial Services 2016 GBA Summit

SPEAKERS

MODERATOR: SIMLA ÜNAL
Marketing and Business Development Director, SME Banking, TEB
Presentation (members only)

JANE HOWARD
Managing Director, Branch and Private Banking, Royal Bank of Scotland
Presentation (members only)

RAYA YUSUF-SBITANY
Division Head of Department, Business Development, Bank of Palestine

JAVIER SANCHO
Head of SMEs, Banco de América Central
Presentation (members only)

IN THEIR
WORDS:

“Non-financial services complement the financial offerings of the bank. They are not a marketing effort or CSR.”
— Simla Ünal

“Our support for enterprise fits with our plan to become the No. 1 UK bank for customer service, trust and advocacy by 2020.”
— Jane Howard

“30 percent of the women who attend our trainings open an account immediately afterward.”
— Raya Yusuf-Sbitany

“Coaching and mentoring services should continuously evolve to meet customers’ needs and expectations.” 
— Javier Sancho