Fierce competition for
deposits in Bulgaria is pushing banks to become more innovative to
generate additional income. Tsvetanka Mincheva, the deputy head of
retail banking at Bulgaria’s largest lender, Bulbank, tells Duygu
Tavan about the bank’s strategy that includes the launch of a
women-only branch.


Box showing Bulbank factsCompeting with local banks that offer interest rates
as high as eight percent has proved a challenge for Bulbank,
UniCredit’s Bulgarian subsidiary, who had to comply with group-wide
pricing policy.

Segmenting specific banking
services can drive and accelerate customer retention and
acquisition in tough financial times.

So Bulbank UniCredit, Bulgaria’s
largest bank with a market share of 15.3%, fine-tuned its
segmentation strategy and – besides introducing a women-specific
product range – has opened its first women-oriented branch in the
country’s capital, Sofia.

Tsvetanka Mincheva, deputy head of
retail banking at UniCredit Bulbank, discussed with RBI
the bank’s female product-range and branch.

She told RBI that the
launch of the Women Branch was a pilot project, which could be
extended to the group’s network across central and Eastern Europe
if the project bears fruit in six months time and if the Sofia
outlet proves to be a winner.

According to Mincheva, the Women
Branch has a more modern atmosphere, using purple and violet as its
flagship colours instead of the traditional red and white, and
providing a more comfortable and convenient atmosphere for women to
bank in.

“The women branch in Sofia is a
starting as well as turning point,” Mincheva said.

“We plan to run it as a pilot
project for between six months to one year; and if it is
successful, we plan to open more dedicated service centres for

The Women Branch has specialised
branding according to the preferences of women as identified by a
group-wide study and dedicated areas for relationship management
for all financial groups, including affluent and small businesses
besides the mass retail female client base.

Customers are served by female
advisors only, an aspect of the needs and demands of female clients
the study revealed.

Pull quote by Tsvetanka Mincheva, UniCredit BulbankThe service
extends to a women-specific product range, titled Donna.

“We offer a dedicated and
specialised relationship model and tailor-made products under the
Donna product range to cater for the needs of modern women,”
Mincheva explained.

The Donna range is a package
programme including women-oriented deposit, consumer and investment
loan offerings as well as a credit card and will be offered
in-branch throughout the bank’s 230 branches across Bulgaria.

Mincheva said that the product
offer widens the offer for Bulbank’s female clientele because it
responds to particular periods in women’s lives, such as maternity
leave, during which the customer receives a wider repayment option
on loans and mortgages.

She added that the consumer loan
can, for instance, be used to finance plastic surgery.

Although the Donna range was
launched in time for World Women’s Day on 8 March, Mincheva said
the product range will remain a permanent offer.

The Donna package includes:

  • Donna deposit with a deposit
    period of 180 days and interest paid every 60 days
  • Women with children of up to
    3 years will receive a higher interest rate on the Donna deposit
  • Unico Donna package
    programme with two current accounts free of charge, one in the
    Bulgarian currency and the other in foreign exchange
  • A free debit card with an
    additional two attached debit cards, at preferential conditions, on
  • Three free-of-charge utility
    payments per month
  • Unlimited internal banking
    transfers via electronic channels
  • SMS notification
  • Bulbank Online electronic
  • Donna consumer loan, with a
    preferential interest discount period
  • Mortgage loan for private
    investment initiatives
  • Visa Classic Donna credit
    card with no service fee for the first year and with a preferential
    monthly interest rate of 1.33%

There is a beneficiary part to the
Donna range, according to Mincheva: a lot of Bulbank’s female
customers are interested in supporting charities and part of the
turnover of the Donna range will be dedicated to such

Mincheva was confident that the
current range on offer for women satisfies the segment’s
requirements; but added that as a general rule of thumb, the bank
continuously works on improving its service and product ranges.

This strive may, one day, even lead
to a change in the bank’s segment categorisation method.

“We currently distinguish target
groups in terms of assets,” Mincheva said.

“But in the future, it could be
that we target customers in terms of social circumstances. We are
in a process of change.”

She said that the bank currently
distinguishes target groups in terms of assets.

“But in the future, it could be
possible that we target customers in terms of social circumstances.
We are in a process of change after all,” she added.

But despite the move to
segment-specific products, the bank is not migrating aggressively
to self-service channels, such as Microsoft tables or iPads, in the
female branch.


Multi-channels a hot

Table showing Bulbank financials 2010However, Mincheva
emphasises that multi-channel banking was another hot topic on the
bank’s agenda.

“The multi-channel service is one
of our strategic points for future development. We are working on
such a service, but not on anything specifically relating to the
women branch.”

The bank has invested BGN3.3m
($2.5m) in alternative channels in 2010, including for its internet
banking platform, call centre, new POS and the second generation of

“Multi-channel banking is one of
our top strategies. It is a very important channel and
complimentary to our branch network,” Mincheva said.

“In Bulgaria, we are not as
developed as other European, even other CEE, markets. General
internet penetration is high, but the number of internet banking
customers is very low.

“We are investing in this channel,
educating our customers and adding new products – but we are still
in a development phase as a country.”

Bulbank recently introduced
services to request loans and credit cards via its internet banking
platform and Mincheva said that the bank was about to launch a
second generation of ATMs to offer cash deposit opportunities.

The roll out of these ATMs will
kick off with a pilot phase again, during which the bank will test
15 such ATMs in Sofia.

“But we do plan to roll them out
this year, covering the main branches,” Mincheva said.

Mincheva added that the bank will
not replace all of its 600 ATMs “as the service is not popular with
customers yet”, so customer education will take place in accordance
with the upgrade.

Customer education will also play a
major part in the bank’s launch of mobile banking services. The
bank is in the process of an application-based mobile banking
service for the iPhone, which will be launched during the middle of
the year, Mincheva said.

“We educate customers by
informational campaigns,” Mincheva said.

“We show customers in-branch how
the technology works, show them the benefits, such as the speed and
convenience. We show them that it is not difficult and that there
is no security threat.”

But when it comes to branches,
Bulbank will only receive a small amount of the 180 branches the
group is planning to roll out in Serbia, Russia and Bulgaria by
2015, however Mincheva would not disclose any exact figures.

Overall, the bank is looking to
optimise its presence and preserve its market share, which –
despite still being higher than local rivals – has gone down in the
past few years.

Looking ahead, Bulbank is focused
on further growth, including increased customer numbers, a higher
cross-selling ratio, better customer satisfaction, and better
relationship management.

Mincheva emphasised that the bank’s growth strategy was not
product but customer-orientated.

Photograph of Bulbank's Women Branch compared with the original branch