Tinkoff Bank & Tink

Retail Banker International takes an in-depth look at two of the most innovative offerings in Scandinavia and Russia. They are utilising new technology in very different ways. The only thing they have in common? They have similar names.

Daniel Kjellen

Transforming Russia’s financial services market

Oliver Hughes joined Tinkoff as CEO in 2007, and under his leadership the branchless innovator has grown into the world’s largest independent digital bank by customer base.

Russia’s Tinkoff Bank is little more than 10 years old, but has made quite a splash in its short history.

In 2017, Tinkoff cemented its position as the number two credit card player in Russia with a market share of 11.6%, acquiring 1.8 million new credit card customers. The self-styled online financial supermarket in the cloud is now making waves in the current, SME and investment account segments.

At first glance, Tinkoff’s current profit forecasts may appear ambitious – it says it is on track to hit net income of at least RUB24bn ($390m) in 2018, up from RUB19bn in 2017 – but, if anything, the forecasts appear somewhat modest given Tinkoff’s track record.

Tinkoff Bank CEO Oliver Hughes, tells RBI: “We are opening over 400,000 accounts per month across all products. In consumer current accounts, we are opening 120,000 new accounts per month.”

Tinkoff is successfully disrupting the existing market, while its current account net promoter score of +57 is sector-leading.

Tinkoff’s move into the SME sector in 2016 has kicked off so well that that business line reached break even in June 2017. As at year-end 2017, Tinkoff served about 250,000 SME customers, a fivefold increase in one year. For fiscal 2017, SME business contributed RUB3.2bn in fees and commission income and over RUB800m in net segment income.

Diversifying Tinkoff into new sources of non-credit revenue is giving it an increasing share of customers’ wallets and it is proving that it can build and scale in new segments profitably. Tinkoff Black and Tinkoff Mortgage both broke even in 2017, while its into the investment sector is also proving a hit.

Notes Hughes: “Tinkoff Investment, a retail securities trading platform-broker also exceeded expectations with over 70,000 brokerage accounts opened by year-end 2017. We are already a big player in retail securities in Russia.”

In May, Tinkoff rolled out its own platform, offering brokerage accounts directly to customers. As a result, the overall contribution to total gross revenue from all non-credit-related business lines, including Tinkoff Insurance, doubled in 2017.

Hughes continues: “We remain on track to report net income growth per year in the 20- 40% range to the end of fiscal 2019.”

Segmentation strategy is very much the mid-market, but Tinkoff is increasingly moving into the mass affluent and lower end of the high net worth segments, as evidenced by its launch of Tinkoff Black, which offers concierge services.

Highlights for 2017 included Tinkoff launching its own ATM network, initially with 200 units, but Hughes already has plans for an additional 400, and says the network will hit 1,000 before long.

“We do not need branches and will not have any branches of any format. Some [digital] banks have experimented with fancy branches or cafe formats or used the branch to promote their brand. We do not need any branches for brand presence.”


Scandinavia is often cited as a hub of innovation and Tink is no different. Based in Sweden and founded in 2012 by Kjellen and CTO Fredrik Hedberg, Tink’s goal is to bring “financial happiness” to its customers.

Kjellen says: “We kind of felt that there might be something more to life than working for one of these financial institutions. We saw an opportunity to mix technology and finance.”

“Tink is a product and an engineering company at heart. Today, we have half a million users in Sweden. Taking that journey onwards, we allowed customers to make payments from our API. Basically, any type of payment or transfer you could do with you bank, you can now do with Tink.”

Its direct-to-consumer app is live in Sweden and allows customers to transfer money, pay bills, save towards goals, borrow loans, and open new accounts. It can also suggest the best financial services for each customer.

However, while the app is aiding customers in Sweden, Tink’s work in the back-end is making waves globally. This is expanding “dramatically” and the firm is pushing this rather than the consumer-facing app. Kjellen states that around 90% of Tink’s efforts are on the B2B side.

Since the launch of the API, it has been integrated with banks such as Nordea, SEB, BNP Paribas, and ABN Amro, but the potential is limitless. Starting off in Sweden and Holland, the API is now available in over ten markets and doubled the amount of customers.

“They partner with us because they share the vision that consumer banking will be data driven in the future,” Kjellen says.

“The winner of this will be the one who makes sure that they have all data that’s relevant, that uses all that data to help the user understand their finances, and to be able to provide advice to the customer and sell products on top of that understanding and advice.

“The one who gets those three things together will be the Holy grail of data driven banking.”

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