BULGARIA IS A TEST AREA FOR BANK EXPERIMENTS
Mike Yansen, Director for Central and Eastern Europe in Hewlett Packard, to the BANKR weeklyMike Yansen is Director of the world-famous Hewlett Packard company, and heads the sector servicing the financial industry in the countries of Central and Eastern Europe, the Middle East, and Africa. Mr. Yansen has a grip on almost half of the world, and basically the recently established financial markets - from Russia to Africa. His clients include banks, insurance, social insuarnace and leasing companies, which buy technologies from Hewlett Packard. He is glad that it is not only a hardware company. Otherwise it would not be able to satisfy the business needs and purposes of financial management. My task is to understand the current problems of banks in order to offer them (tegether with my colleagues from my team) adequate business solutions, Mr. Yansen explains. He was born in Johannesburg, South Africa, where his home is. He has four children, the eldest of whom is 20 years old. For several years now he has been living with his wife in Vienna, where the regional office of Hewlett Packard is situated. Mr. Yansen has a bachelor's degree in maths, finance and computers from the University in Johannesburg. Later on he defended an MBA in France.Mr. Yansen, how do you feel in Europe, how would you describe your mission in Central and Eastern Europe?- It's a pleasure to work here. But I hope to go back home to South Africa one day. Presently, however, it's very interesting for me here because I participate in events that will lead to the establishment of a strong and stable economy in Central and Eastern Europe. I believe the application and mastering of westeuropean achievements from the last 30-40 years will create prerequisites for a quick economic development in the region. Examining the structure of expenditures for bank operations I established that financial institutions aim to make a quick progress. Easteuropean banks which for the first time engage in retail banking are already achieving positive results. I'm travelling very much and I talk with the bank IT management, I listen carefully to the problems these people face, and I propose them solutions through the information technologies and innovations of Hewlett Packard, which are of great value and applicability. The aim is to reach western standards of efficiency. Regretfully, financial institutions and companies in Southeastern Europe have problems, but do not have sufficient money for techonological investments. Therefore, they have to arrange their priorities according to their significance. Where would you place Bulgaria if you compare the state of countries in Eastern and Central Europe in terms of the development of IT in the financial sphere?- Bulgaria is a suitable bridgehead for some western banks that want to enter Eastern Europe. Greek, Italian, Austrian, and other western capitals have already gained positions. For them Bulgaria is a very important and stable market in Eastern Europe and the Balkans. But from the point of view of IT infrastructure I think a dramatic transition is yet to be made in order to reach levels, necessary for the development of the Bulgarian financial industry, which means a strong settlement, telecommunicational and transborder payment system. Bulgaria is in ideal postions to ensure that through its central banks and the commercial banks connected with it. Do you think Bulgaria has the protential to repeat Ireland's economic boom through the development of information technologies, especially on the grounds of the statement that we have talented and well-qualified IT experts?- Ireland became a highly developed country in terms of IT, thanks to specialized and unexpensive technological achievements for the financial industry. The profits from software licences are the highest in principle, they are the money-making part of information technologies. Regarding Bulgaria, language is its main problem and I don't see how it could be overcome. Irelenad is within the British community and its products are easily distribuited in the English-speaking countries. Due to the language barrier it is better for Bulgaria to direct its attention to IT tools for development than to programmes intended for the end consumer. Concerning the qualified personnel, variable quantities should be taken into consideration as well. It would be more appropriate for you to take up connecting technologies, rather than consumer interface which are the priority of established IT companies.What is the purpose of your visits to Sofia?- During my visits to Sofia I meet and talk with top IT managers from the domestic financial industry. I have visited Bulgaria about ten times in the last few years as Hewlett Packard offers and implements important projects in the Bulgarian National Bank (BNB), in almost all Bulgarian commercial banks, and in other financial institutions. We are trying to bring in technology, qualification and knowledge. My experience shows that valuable technologies are easily accepted by clients. We are conducting negotiations for programme renovation in some Bulgarian financial institutions, which will take about four to eight months. Thanks to our team the technological projects are developing very well. I can assure you that all Bulgarian banks have been equipped with technology of Hewlett Packard. Bulgaria is a relatively small market. Why does Hewlett Packard direct investments to this country?- Yes, it is indeed a small market in comparison with Russia, Croatia, Slovenia and other Easteuropean countries. But many Western banks set up their Balkan centres in Bulgaria. We work with those credit institutions and they bring us to Sofia in order to ensure the technologies they need for their business, to support their start in the Bulgarian financial industry. Our main aim is the integration of bank technologies and software programmes, provision of adequate programmes for insurance and leasing companies. We have specialized in interface components for the end consumer because every bank that wants to operate with its products should be able to manage the electronic connections. We produce and offer IT products that help financial institutions service their clients. Seventy five per cent of all transactions in the world are carried out with technologies of Hewlett Packard. The London Stock Exchange, Wall Street and other capital markets are functioning with the technologies of HewlettPackard. Financial managers are interested in our open IT systems due to their high functionality and low prices of transactions. Retail banking in Bulgaria needs a qualitative leap in terms of technologies in order to turn the credit institutions really competitive. Currently, new functional systems are entering at a high speed. The Bulgarian bank market (as that in Eastern Europe as a whole) is a kind of a test area for new technologies and business models on the part of Western financial institutions.This cannot happen in their own countries. If a new business model fails in Germany, for instance, the bank that introduces it will lose, say, half of its clients within a month. That is why the financial industry in Western Europe takes no risks of making experiments. But the Eastern markets are suitable for tesing quick changes in the business models. According to my personnal observations, financial managers here are not conservative towards business innovations; they rather aim to achieve lower prices. Is it necessry to change the computer hardware when introducing complex IT solutions? This would considerably increase the banks' expenses?- Hewlett Packard aims at achieving high functionality of its systems, which is only possible if high technologies are available. We know that the young and affluent clients would prefer to trust their money to a modern bank branch, run by high technologies that guarantee security of operations. This psychology makes the banks carry out technological renovation. For us that means replacement of the software and mobilization of the bank personnel to use it. Distance training of staff is already used and the employees do not need to quit their working places. Thus, thanks to high technologies, when the companies Compaque and Hewlett Packard merged - each with a personnel of 60,000 - a common e-mail system was introduced within a single day.Security is absolutely necessary for banks, including the protection of their information systems. What does Hewlett Packard offer for the management IT risk?- IT security is a complex issue. Hewlett Packard has focused on highly reliable technological solutions. In that way the company offers security and uninterruptedness of the bank business as per the Basel II agreement for risk management. Through its technologies Hewlett Packard guarantees that the banks will be able to manage the operational and system risk. E.g. it is our concern to safely carry out a bank operation from Bulgaria to Switzerland where the transfer is guaranteed by the Hewlett Packard system.Trust in electronic bank services increased after passing a law on the e-document and e-signature in Bulgaria. What are the new tendencies in e-banking and what should Bulgarian credit institutions not omit?- The main thing about e-banking is the considerable reduction of expenses for the banks. It is also a convenience for the clients who can effect deals outside the bank. Quickly developing credit institutions manage to attract a large part of the young people, although they do not get new bank services. Well-managed banks try to maintain personal contacts with their clients. The finance business is specific, it requires guarantees for trustworthiness and confidentiality. That is why, the personal contact with the client is indispenable. What would you recommend for the development of the Bulgarian bank system?- It is very important that the BNB ensures fair conditions for the development of competition in the sphere of finance and credits. Electronic financial documents and the e-signature should be valid in court, which means harmonization between financial and legal requirements. The central banks should work out regulations and supervise their implementation, and the legal framework should conform to the requirements of the European Union, which Bulgaria is to join.