Tinkoff bank: Russian most popular neobank overview

Let’s learn more about Russian challenger Tinkoff bank

Tinkoff bank

Tinkoff bank: Russian most popular neobank overview. Source: wikimedia.org

Tinkoff bank is a Russian commercial neobank focused entirely on remote servicing, without any bricks-and-mortar offices. The bank is headquartered in Moscow. It has been recognized as the best mobile bank in Russia in 2013-2019 (as stated by Deloitte and Markswebb Rank & Report). Tinkoff has also recently been named Best European Retail Bank of the Year by Retail Banker International (RBI) at the 35th annual RBI Global Awards.

The bank’s founder, Oleg Tinkov, has had several successful projects before diving into financial services. The Russian billionaire developed a chain of household appliance stores, managed food factories, a music store, the record label, a brewing company, and the Tinkoff restaurant chain. However, the bank previously known as Tinkoff Credit Systems has become the billionaire’s largest business. In fact, it has grown to a whole financial ecosystem that offers a full range of financial and lifestyle services.

This year, Tinkov was put under investigation. The US authorities charged him with tax evasion that took place in 2013. The defendant allegedly concealed $1 billion in assets and income when renouncing U.S. citizenship. Although the allegations refer to Tinkov as an individual and have nothing to do with the bank itself, shares of Tinkoff Group (TCS Group) responded by falling in price. Numerous bank clients posted in social networks that they were closing their accounts. Although Oleg Tinkov has long been far from the operational management of the bank and owns only 40% of the shares, he’s built a strong personal brand. Thus, his arrest hit the bank hard.

A while later, the billionaire announced he had been diagnosed with leukemia. He has officially stepped down as a chairman of the Tinkoff Bank’s board of directors to focus on his health. That brought a new figure to the forefront of the brand. The permanent CEO and minority shareholder of TCS, Oliver Hughes, who previously stayed in the shadow of the charismatic founder of the group, now is an official bank’s representative.

Tinkoff bank history

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Tinkoff bank history. Source: unsplash.com

Here’s a brief timeline of the Tinkoff bank history:

  • 1994 – the bank was registered as Himmashbank.
  • 2005 – the financial institution became a member of the deposit insurance system.
  • 2006 – it was acquired by Oleg Tinkov and renamed Tinkoff Credit Systems (TCS Bank), being reoriented to work with individuals.
  • 2007 – Goldman Sachs, an international investment bank, appeared among the owners of the credit institution.
  • 2008 – the Swedish investment fund Vostok Nafta joined it.
  • 2013 – the bank conducted an IPO, whereas about $1.09 billion was raised on the London Stock Exchange. In addition to the existing package, investors were offered additionally issued shares of the bank.
  • 2015 – the financial institute changed its legal form and name to Tinkoff Bank JSC.
  • October 26, 2015 – the Federal Antimonopoly Service (FAS) recognized the actions of Tinkoff Bank as an act of unfair competition, as the bank attracted funds of individuals with one offering and then changed deposit conditions with the significant deterioration of their consumer properties. FAS also imposed fines on Tinkoff Bank and its officials in the amount of 300,000 and 12,000 RUB, respectively, for unfair competition in the deposit market.
  • 2019 – Tinkoff launches its super app. Tinkoff Bank was named the most profitable bank in Central and Eastern Europe (CEE) by The Banker, a leading international financial publication which is part of the Financial Times Group.
  • 2020 – Tinkoff announces a partnership with goods.ru, a marketplace that brings together Russia’s leading online stores. The bank also launches the Investment Box, Russia’s first service for micro-investing offered by a bank.

About Tinkoff bank

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About Tinkoff bank. Source: shutterstock.com

The sole shareholder (100% of the Bank’s share capital) is TCS Group Holding PLC (Cyprus). Tinkoff Bank is at the core of the TCS financial ecosystem. It’s one of the world’s biggest online banks with over 10 million customers and total assets of 579,5 billion RUB ($8,26 billion). The key segments in which this financial institution operates are debit/credit cards, cash loans, and private deposits. Except for individuals, the bank also serves legal entities, including SMEs.

According to The Banker’s Top 1000 World Banks 2019 ranking by capital, Tinkoff Bank topped the list of the most profitable banks in the CEE region with a return on assets (ROA) of 7.22% and a return on capital (ROC) of 46.41%. Tinkoff was also named the second most profitable bank globally by return on capital.

The bank stands out among its competitors with the super app uniting its vast financial ecosystem that enables customers to assess and plan personal spending, invest their savings, earn loyalty program bonuses, book trips, buy movie tickets, make restaurant reservations, health & beauty appointments, and much more.

SEE ALSO: Super-app: what is it?

A key element of the Tinkoff super app is its own marketplace. In fact, it may be described as a mini-app store inside a super app. Thus, external partners will be able to connect to the marketplace (via the Open API) using the App-in-App model and embed their products and services for Tinkoff customers directly into the application interface.

Currently, a major national Goods.ru marketplace is also featured in Tinkoff super app. Customers can shop at goods.ru right from the Tinkoff app and receive 5% cashback for each purchase. The service is now available only in Moscow and the Moscow Region, but Tinkoff plans to expand it to all Russian regions. As of today, it supports only selected categories. By the year-end, however, the app will offer the full range of items from goods.ru (more than 1.7 million goods in 16 main categories).

This year, Tinkoff mobile bank has introduced a new technology for recognizing QR codes. The technology from the Russian developer Smart Engines is available to users in the Tinkoff mobile application for iOS and Android. By scanning the QR code, bank customers can pay taxes, fines, utility bills and other receipts, as well as make purchases and money transfers directly in-app without the need to enter details manually.

All this functionality reminds more of the Chinese fintech industry than the offers of Tinkoff’s European competitors. It makes the neobank unique in its realm.

Tinkoff also makes active use of AI and machine learning technologies to streamline communications: over 30% of customers’ chat queries are resolved with the help of chatbots, with zero employee involvement.

Products and services

SMS business messaging

Products and services. Source: unsplash.com

Tinkoff bank offers its customers numerous financial services and technological solutions:

  • debit cards, current accounts, and deposits;
  • credit cards and unsecured cash loans;
  • loyalty programs which include cashback, bonuses, air miles, and other rewards. Customers can choose between the Bank’s own loyalty programs and co-branded offerings in partnership with AliExpress, eBay, S7 Airlines, CSKA Moscow football club, and other major brands;
  • four types of insurance: personal accident insurance, personal property insurance, travel insurance, and motor insurance;
  • Tinkoff Business suite of services that includes RUB and FX-denominated checking accounts, working capital and overdraft facilities, credits at favorable rates for small businesses, Point of Sales (PoS), and online payment acceptance, online bookkeeping, a website builder, invoicing, etc.
  • Tinkoff Mobile MVNO – a flexible mobile service that allows customers to tailor their mobile plan to their own needs and offers a number of value-added options such as virtual numbers, music and video streaming services, etc.
  • Tinkoff Travel is a platform for flight and rail bookings, hotel deals, car rentals and tour packages from members of the international Star Alliance, SkyTeam and Oneworld alliances.
  • Tinkoff Investments – online brokerage portal, offering customers a range of securities (ETFs, stocks, bonds, etc) including Russian and international shares.

Tinkoff also offers a range of award-winning mobile apps that are free to download on all mobile platforms:

  • Tinkoff
  • Tinkoff Business
  • Tinkoff Investments
  • Tinkoff Mortgage
  • Tinkoff Mobile
  • Traffic fines
  • Card-2-card money transfer
  • Taxes
  • Secure personal document manager

Finally, its super app is a great innovation in the Russian fintech market. It is already available in beta for some users and will be released shortly in version 5.0 for iOS. An Android version will follow. The app will be personalized with the help of AI algorithms. Its core features include its own app marketplace and Oleg voice assistant. The assistant’s basic functions will include financial advice, navigation, and reminders.

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