The “war” of traditional and digital banks

A new reality has taken shape in recent years in the way Greek consumers choose to make their purchases. Specifically, the model BNPL (Buy now, pay later) It has achieved great popularity, especially among younger age groups, up to 35 years, who do not have a credit card.

In our country, this service is mainly provided through TBI Bank OKlarna, Who were able to transfer small loans from financial institutions within the same shops Electronic shop, Even clinics.

The convenience of this option is that credit is approved within minutes and is offered at the time of the transaction. This development has achieved a triple benefit. First for the digital banks themselves that have been able to achieve significant profits, then for the companies that provide specific services, and finally of course for the consumers themselves, who have the ability to easily access products and services, without using a credit card.

How the service works

Direct loans have become particularly popular with the public because they are easy and instant.

More specifically, the given sector is divided, at a given moment, into two subcategories.

Buy now, pay later (nobly): This is a service that the majority of consumers have heard of or used. In our country it is mainly offered by two digital banks, and TBI Bank And Klarna. Those interested can even make their purchases 4 interest-free installments, according to the following system. The interested party is required to pay the first installment with the purchase, while the rest follows in monthly payments.

It is a solution that is usually at the top of the preferences of young consumers, who do not have a credit card and are looking for an easy way to obtain products such as technology goods (mobile phones, video games etc.), cosmetics, clothing or other fashion products. Evidence of the attractiveness of these loans is that the amounts in which… Grants awarded in 2023 reached 50 million euros, an amount ten times higher than in 2022. It is worth noting that the market is in a development phase because the appropriations in this category are expected to double in 2024 and reach almost 100 million euros. .

Consumer loans up to 60 months for large purchases: This special solution is offered to those consumers who want to make purchases of greater value. They have access to a consumer loan that they can repay in up to 60 months. There, the customer first chooses the product he wants and then the process is followed through by the merchant. It is noted that we are talking about a market whose value in 2023 reached 250 million euros, while those who choose it usually buy furniture, cars, and electrical household appliances.

Klarna: Impressive performance in just 1.5 years

Can the Klarna To start offering its services in our country only in September 2022, but this did not prevent it from becoming a new favorite habit for Greek consumers.

According to official data,More than 240,000 consumers in our country use Klarna's “Buy Now, Pay Later – BNPL” service, while with the interest-free payment service in 3, Klarna, supported by artificial intelligence, has introduced to the Greek market a sustainable and flexible payment solution that offers a new possibility for shopping. Online and in physical stores.

Klarna is now a powerful growth engine for more than 1,500 merchants operating nationally and internationally, in sectors as diverse as electronics retail with Public, home furnishings with IKEA and Leroy Merlin, fashion with H&M, Tommy Hilfiger and BSB, and in sporting goods with Cosmos. Sports and Zekreet. According to recent Klarna research, consumers are increasingly turning to buy now, pay later (BNPL).

It is worth noting that all over the world Klarna he have Over 150 million active users worldwide, with nearly 2 million transactions daily.

tbi BThat you: In constant development

It is also at an important stage of development You want Yank, With its deposit portfolio exceeding €1 billion as of the end of September 2023. This is the largest in the given market, while showing a steady increase of 54% year-on-year.

By the end of September 2023, TBI Bank had submitted 1.7 million loan applications in Greece, Romania and Bulgaria, double the number recorded in the same period in 2022.

TBI Bank recorded an increase of about 50% in its total assets at the end of September 2023, reaching 1.35 billion euros (from 910 million euros at the end of September 2022). The loan portfolio increased to €979 million at the end of September 2023 (an increase of 36% compared to the third quarter of 2022).

Based on this positive business performance, TBI Bank's revenues increased by 30% to €150 million, mainly due to a 30% increase in net interest income, but also a 26% increase in net fee income. This brought operating profits for the nine months of 2023 to 104 million euros.

Regarding our country, TBI Bank It began its activity in April 2022 while planning its entry into the deposit products market in Greece.

In particular, as mentioned by Costas Toffel, President of TBI Bank in our country, the bank comes to cover the important gap that exists for ordinary depositors in deposit products with competitive interest rates. In consumer credit, the bank aims to gain a 10% share of the total market in Greece in 2027, from 3% in 2024. The bank has already granted more than 150,000 consumer loans.

Mr. Toffel notes that TBI will continue to invest in Greece, because he believes it is a market where the economy is on a positive path and the outlook is positive.

Who's reaction… loses

It is understood that the traditional powers in space do not want to be excluded from this market under any circumstances.

For this reason, entering the market is in their immediate plans BNPL, As they look for ways to collaborate more with specific market temples, such as malls, department stores and of course popular online marketplaces. They were thus able to create a parallel sales network that allowed them to grow their loan portfolios.

They also continue to create and provide new products, such as in the field of credit cards. There, you are offered balances that can be paid back within a few months and without charging interest, instead of just a one-time commission per transaction.

Finally, as a whole, banks offer the possibility of acquisition Connected Consumer loans (up to €15,000) can be credited to the customer's account within a few minutes of submitting the application In mobile banking or e-banking.

It is worth noting that in Greece, 45% of consumers said that they would choose BNPL services for payments in interest-free installments, while 31% would resort to using a credit card. In addition, consumers around the world find it advantageous to be able to pay for an expensive product in equal installments, without additional costs or benefits.