Center of Financial Technologies: Results of 2015
Center of Financial Technologies (CFT Group), solutions provider for the participants of the financial market of Russia and the CIS, has summed up the results of 2015. The total sales revenue for all business lines represented by products for core banking and all kinds of banking, and for participation in the payment market in the reporting period, has exceeded 17.5 billion rubles, which is 9% more than in 2014.
During the past year CFT has added 12 new-name contracts to its software customer portfolio, including Agricultural Bank of China, Development Capital Bank, Bashcomsnabbank, Gazenergobank, Baikalinvestbank, Transcapitalbank, State Savings Bank of the Republic of Tajikistan “Amonatbonk”, RBS (Royal Bank of Scotland) (Kazakhstan), Bank RBK (Kazakhstan).
In total, during the period CFT has concluded 420 agreements with credit organizations on acquisition of licenses for CFT banking applications. During the year of 2015, integration projects of CFT software solutions were carried out at Nordea Bank, Expobank, Devon-Credit Bank, Moscow-Paris Bank and many other credit financial organizations. In February 2015, a large-scale project at Russian Standard Bank was completed, with CFT-Bank being launched for 1,200 workstations. The project at leasing company “System Leasing 24” started and its first stage was successfully completed. Another project stage on centralization of the business of OTP Bank (in TOP-50 Russian banks) based on CFT-Bank system was completed. Multi-flow retail back office applications of CFT-Bank were implemented and launched at the bank, which allowed transferring the processing of the bank’s consumer loans granted at dozens of thousands of service outlets to a single core banking system.
A milestone of 2015 for the company was the market entrance of insurance and other companies, which will be obliged to keep their financial accounting and generate reporting according to the new standards from January 2018. At the end of 2015, the project on implementation of CFT-Insurance Company system started at Rosgosstrakh, Russia’s major insurance company in terms of the scope of business. The project will include automation of the company’s key business processes, financial accounting and reporting in accordance with the new industry standards of the CBR. In 2015, CFT also signed an agreement on implementation of CFT information system with Asia Life insurance company (Kazakhstan).
In the face of the growing pressing task of optimization of banking business and IT expenses, CFT focuses on development of the ABS outsourcing direction. Last year Korea Exchange Bank Rus, VESTA Investment Bank, and Vzaimodeystvie bank transferred to CFT outsourcing. The experience from the implemented projects has showed that projects that include outsourcing are more cost-efficient for banks as compared to in-house solutions.
Despite the financial crisis in 2015, dynamic development was shown by CFT processing, represented by Golden Crown payment service system, CardStandard processing center, Faktura.ru multi-bank online banking platform, and the National Gorod System, a universal payment acceptance solution.
Faktura.ru remote banking service provider connected 23 new banks to the service in 2015. New partners include Absolut Bank, Agricultural Bank of China, China Construction Bank, KEB BANK RUS, Koltso Urala, and other. As compared to 2014, the number of corporate customers which are Faktura.ru partner banks that use Internet banking has increased by 11%, and the number of private users has grown by 53%. The number of payments via the service has grown by 40%, with a 2.5-fold increase in the mobile application.
CardStandard processing center showed great results in 2015 with successful implementation of the projects of migration of the card portfolios of 16 banks to the facilities of CardStandard PC, including Nordea Bank, J&T Bank, Housing Finance Bank, FIA-Bank, Natsinvestprombank. The total number of CardStandard partner banks has exceeded 110. The total current issue portfolio serviced by the processing provider is 40m cards (74% growth as compared to 2014), and the acquiring infrastructure has exceeded 22 thousand devices across Russia.
CardStandard PC has become the first processing center in Russia with the status of Cloud-Based Payments Service Provider by Visa, which allowed the partner banks of the processing center and Faktura.ru to be the first in the Russian market to offer their customers the option of contactless payment for services using a mobile phone via HCE (Host Card Emulation) technology.
During 2015, 95 new agents became partners of one of the leading aggregators of the mass payments market, the National Gorod System; the number of services available for payment increased by 1.8 thousand, and the number of payments to government establishments doubled. The service of payment acceptance at Euroset and VimpelCom showed active development. Within the framework of extension of partnership with Russian Post FSUE, offices of the federal postal service of Saint-Petersburg and Leningrad Region were connected to the Gorod System, and the process of integration with offices of the federal postal service of the Siberian and Far Eastern Federal Districts. A new website of the Gorod HUS (housing and utility services) Accrual System was launched during the reporting period, and the Gorod Payment Cabinet, which allows paying for the most frequent services on the Internet with Visa and MasterCard cards, became much more popular – the number of payments has grown 4 times in 2015.
In 2015, over 30 million transactions between individuals to the amount of over 665 billion rubles were performed using Golden Crown – Money Transfers service. Even in the falling market Golden Crown – Money Transfers service continued showing positive development dynamics, with 9% growth in turnover during the 12 months of the past year. 58 organizations in Russia, the CIS and beyond became the new service members. The geography of presence of Golden Crown money transfers extended in 2015 to new directions – Great Britain, Latvia, Bulgaria and Cyprus. Today Golden Crown money transfers are available in 27 countries of the world, and the service infrastructure exceeds 49 outlets.
Due to integration with Golden Crown – Money Transfers, during the reporting period Golden Crown – Loan Repayment service tripled its infrastructure. Currently, the service network includes over 38 thousand outlets across Russia, which has allowed creating a vast walking-distance infrastructure with dense and uniform coverage in the whole territory of the country. In 2015, holders of cards of Visa and MasterCard international payment systems issued by any Russian bank got the opportunity to replenish them online at MTS, Beeline and Svyaznoy mobile shops. Besides, several tenders of the Deposit Insurance Agency were won during the reporting year, with borrowers of the banks whose licenses had been revoked (including, Eurocommercebank, Probusinessbank, RSB24, and other) being allowed to repay their loans without fees in the whole service infrastructure.
In 2015 Golden Crown – Loyalty Programs service won the national award “Customer eXperience Awards Russia 2015” in the category “Vendor of the Year”. At present over 100 million customers who participate in coalition and local loyalty programs operate on CFT technologies. The total scope of transactions of these loyalty programs is over 600 million per month, and the average processing speed is over 500 operations per second. In 2015, CFT’s new loyalty project customers became PANDORA, operator of one of Russia’s major loyalty programs for frequent flyers, as well as Inventive retail group, which comprises mono-branded chains re:Store, Sony, Samsung and LEGO.
During 2015, Golden Crown payment system actively developed the direction of corporate gift cards designed to solve various tasks under motivation and stimulation programs. By the end of 2015, 40 projects were implemented, including corporate gift cards of M.Video, MediaMarkt, Sodexo restaurant passes. In September 2015, the service of pre-paid gift cards for banks was launched joined by 14 partner banks during four months. Today, the cards are distributed at 455 banking service outlets in 150 Russian cities. The total issue of pre-paid gift cards implemented on the basis of technological solutions of CFT and Golden Crown PS doubled in 2015 as compared to the previous year.
In the reporting year CFT Group continued cooperation with microfinance market players within the framework of the product complex “Golden Crown – MFO Services”. The microfinance organizations that are partners of Golden Crown have issued over 500 thousand cards, and the turnover has grown 80% as compared to 2015. Such important market players as SrochnoDengi, Otlichniye Nalichniye, and MoneyMan became its new partners.
Electronic Travel Card system created by Golden Crown payment service system within the framework of implementation of social and transport projects developed actively in 2015. The system geography extended to new regions, among them Moscow Region, Jewish Autonomous Region, and Novokuznetsk. In the past year Electronic Travel Card system entered the CIS market – it was the basis for creation of ONAY automated travel accounting and payment system in Almaty. At present the system successfully operates in 18 regions of Russia and in the Republic of Kazakhstan. As of the end of 2015, over 6 million transport cards have been registered in Electronic Travel Card system. Over the reporting period Golden Crown – Transport Card cards have been used for over 500 million rides.
In 2015, Standard & Poor’s rating agency confirmed the credit ratings of the operator of Golden Crown payment system, Payment Center NSCA (part of CFT Group) – long-term “ВВ-“ and short-term “В”. Also, based on the annual results the CBR included Payment Center NSCA in the list of credit organizations which have the right to open accounts of enterprises of strategic importance for the military-industrial complex and security of the Russian Federation.
“The financial market is going through a hard period of transformation,” says Chairman of the Board of CFT Group Andrey Visyaschev. “Like the rest of the market, we are trying to find new opportunities and new drivers amidst these conditions, we are trying to help our customers achieve their goals and adapt the business processes to the current situation. The year of 2015 promised to be complicated, but in fact it turned out to be rich in unusual projects and in general its results can be deemed positive. It is obvious that today information technologies form the basis for creation of modern and dynamic business, reduction of costs, increase in efficiency, and improvement of communication between a service provider and a service consumer. We plan to develop our cooperation with players in various market segments, from banking and payment to insurance and retail, and we look into the future with great interest.”