Why Russian banks are suddenly turning into tech companies

With the rapid technological development and the new tendencies of the market, the Russian companies seem to find a very interesting move towards the direction of the tech, rather than traditional banks. The traditions and the conservative approach towards the topics are slowly getting to an end as it seems, according to the news. This might be indicating the new technological era in Russia and some vibrant and important steps being taken in the tech direction. 

The recent news which was very sudden and no one would have expected it, is the Sebrabnak becoming a technological company and leaving the bank part in the past. The change happened all of the sudden and the Russian state-owned bank has changed the name to Sber in order not to be relevant to the banking industry anymore, but rather be a tech innovation-oriented company with the massive aim and goal to revamp as one of the biggest tech companies in the country. 

This should not be hard, as the company has already implemented some of its innovations and gadgets into its platform and was always considered as the fintech company with the license of the bank, rather than simply a bank. This is what makes the representatives of the company even happier and makes them be sure of their success on the future road. 

The comments regarding the sudden change have been made by the company's representatives, stating that this change is the biggest challenge and the biggest switch in the 179 - year history of the company. The large transformation has already begun and we should very soon witness the major changes it offers. Sber has launched a series of digital services alongside its tech company revamp. 

Large Transformation 

David Rafalovsky, the chief technology officer said that it is a huge investment not only a big investment. This is the biggest challenge of the company, which always had a chip on the shoulder. The representative of the bank, as well as the whole team, considers the company to be called tech rather than the banks. 

The full investment of the company was not disclosed, and the numbers were not announced, but according to the reports and the overall value of the company, the numbers should be quite big. The Sber holds assets of around $401 billion in August and sits at a market value of about $67 billion. It serves almost 100 million active banking clients.

What is the investment future of Sber 

It has been announced that one of the biggest reasons, the tendency of switching from banks to fintech companies, is the new solution to the industry, which is the crypto payment method. The banks have identified the blockchain as a perfect new industry to focus on, which means they have to rebrand themselves as much as possible. The reason for that is the increasing demand for cryptos in the local market. The demand from the customers is increasing because of the popularity of crypto payments in almost every sector. 

One of the largest sectors they've taken over completely is betting and gambling. According to Esportsbets.ru a large majority of young Russian gamblers are completely dependent on BTC and other cryptos and Sberbank wants to tap into that market. These effects the banking sector obviously as well, as much more transactions are held in cryptos rather than in the traditional way. Thus, the local banks try to catch up with the latest tendencies and make full service available to the customers. 

Series of digital services 

Sber has always been holding the digital revolutionary and innovative niche in the market. The innovations and the gadgets include some platforms and features, which are already integrated into their platforms but promise to be more widespread in the nearest future. These include SberBox, a TV streaming device which the bank says, “morphs any TV into an entertainment center”. The retail price for this is RUB 2,990 ($30). SberPortal is a smart speaker with six mics and a screen that provides gesture and voice recognition. The device is going on sale later this year. It has also rolled out Salute, a family of virtual assistants which range from “cultured Sber, cheerful Joy and pedantic Athena”.  SberPrime is a basic subscription service priced at RUB 199 ($2.57) a month.

One of the biggest innovations which are the closest to the newest switch news is the bank’s SmartMarket has launched. It allows businesses and entrepreneurs to create their own apps and work with Sber via a revenue-share model. This service is especially handy and very comfortable for the companies and the small entrepreneurs, who are willing to attract new investors and refine their product from the very initial steps. 

Yandex VS Sber 

The whole news about the massive switch for the Sebr has been rumored straight after the announcement of the split with Yandex, which was the former partner of former Sebrbanks. The rumors about the Yandex bid $5.5 billion for Tinkoff, Russia's biggest online bank platform has spread all throughout the internet almost immediately. 

The idea of a combination of the two mentioned companies was born back in 2019, at the International Economic Summit. All after that, the founders have made certain comments and statements, about the key shareholders in Tinkoff and Yandex. According to the forecast, the partnership could bring the company to the worth of $20 billion, which is a 50% increase in the current revenue. 

On the other hand, the relationship between Sberbank and Yandex ended in June this year, and a decade-long partnership has now transferred to the perhaps decade-long competition. Sber is prompted to buy up to 45% share in Yandex.Market. Though according to the representatives of the company the end of the partnership was on the mutual ground and the fintech ecosystem will only benefit from it in the future.