Sberbank may be the largest lender in Russia but it is not resting on its laurels. The bank is striving to become the 'ecosystem of first choice' in the country, and is branching out into numerous other fields while embracing fintech start-ups. Graham Buck reports. 


Emerging technologies such as artificial intelligence (AI) and machine learning have fuelled competition between non-US contenders to be the next Silicon Valley. Russia’s ambition to become a major technology hub is supported by its banks, with its biggest institution, state-owned Sberbank, and popular online bank Tinkoff, a comparative newcomer, among the leading fintech incubators. The two have even joined forces in areas such as mobile peer-to-peer payments.

In February, Sberbank hosted its first tech Demo Day in Moscow, in partnership with 500 Startups, a San Francisco-based early-stage venture fund and seed accelerator. During the event, 30 fledgling Russian IT firms – shortlisted from more than 840 applicants for a start-up accelerator programme launched in late 2018 – gave US-style presentations to a judging panel and audience of potential investors. The 30 were whittled down to seven firms for the second stage, which takes place in California in April 2019 and includes mentoring from 500 Startups and the opportunity to pitch to US investors.

A global stage

“When planning the launch of the accelerator programme a year ago, we wanted to bring strong business competencies to Russia,” says Lev Khasis, first deputy chairman of Sberbank’s executive board and compere of Demo Day. “From the beginning, we understood we would only be able to interest international investors if we offered the best, pre-educated start-ups to them. That’s why the accelerator has a second part, a month in Silicon Valley. The geopolitical situation obviously isn’t favourable, but we haven’t seen it stop investors from investing in Russian companies.”

The aim is to help Russian companies successfully export their products and occupy a “clear place” on the global technological stage. “It is important that the Sberbank brand and 500 Startups place a mark of quality on the projects; this will make it easier for major companies to engage with them and agree to pilots,” adds Mr Khasis.

He says the bank was encouraged by an enthusiastic response to what is likely to become a regular event. “We plan to launch the second wave of the accelerator, which will of course finish with a Demo Day,” he says.

The School 21 initiative

The accelerator programme highlights Sberbank’s increasing involvement in the tech community, as does the event’s venue, School 21, a 4890-square-metre former industrial premise at Factoria Business Park in north Moscow’s Tverskoy district. Herman Gref, Sberbank’s CEO and chairman for more than 11 years, announced plans for its formation at the St Petersburg Economic Forum in May 2018 and the institute opened its doors just six months later.

Sberbank describes School 21 as a “unique educational initiative” that follows the model established by Association 42, the non-profit and tuition-free computer programming school set up in 2013 by French computer scientist Nicolas Sadirac and funded by billionaire Xavier Niel.

The new institution aims to be a key source of Russia’s future programming professionals, with two application cycles per year and 1000 students. The curriculum covers algorithms, graphics, cybersecurity and mobile developments. A second School 21, in St Petersburg, is now under consideration.

A first choice goal

Sberbank senior executive Mark Zavadsky says the bank is committed to supporting the start-up culture and has “moved from being the biggest bank in Russia to its ecosystem of first choice”. 

Mr Zavadsky was named head of SberX, Sberbank’s newly formed ecosystem development division, in late 2018. He says: “SberX’s primary task is coordinating the comprehensive development of Sberbank’s ecosystem together with the bank’s other business units and functional units, companies that are part of Sberbank Group and organisations that have partnered with the bank.

“We want to shift from being an intermediary to become a partner, adviser and provider of end-user services. We have tens of millions of retail clients and millions of corporate clients, which all interact with Sberbank in one way or another, and many interact with us daily. They shop using our bank cards and visit our branches, but generally the bank acts as an intermediary. But we want to become the goal. We want our clients to perceive us not as the means to getting something, but as a source of joy and happiness.”

Mr Gref recently floated the possibility of a name change at some point – at least for Sberbank’s non-financial services – as the group is “significantly more than a bank”, with its ecosystem extending to more than 20 companies that encompass these newer areas. These include Beru (e-commerce), VisionLabs (identification) and DocDoc (medicine), as well as Sberbank Telecom and SberCloud.

Beru resulted from a $1bn joint venture with shopping comparison site Yandex. Launched in October 2018, it has ambitions to become the ‘Amazon of Russia’ – not unreasonable in a country where online retail still accounts for no more than 3% of total spend (against 18% in the UK, for example).

“SberX makes two types of investments. First, strategic investments, where we acquire a share in a company, join the board of directors, start overseeing management and immediately integrate the company into our ecosystem – for example, DocDoc, Yandex.Market and Foodplex,” says Mr Zavadsky. “Second is venture investments, where we see potential but don’t directly participate in management. In these cases, we operate either as a venture fund or as an accelerator.”

Breaking out

Further evidence of Sberbank’s major involvement in IT came at the Russian Investment Forum, held in mid-February at the Black Sea resort of Sochi. Exhibits at the forum highlighted projects such as Business Class, a Russia-wide free online business course for small businesses and budding entrepreneurs, launched jointly with Google in 2016; an AI-based programme for processing and sorting messages as part of its ongoing initiative to develop the technology; the Dialog Enterprise corporate messenger (whose developer Sberbank acquired a stake in in 2018); and Smart Neighbourhood, an Internet of Things-based package that provides automated control of utility systems.

Mr Khasis says the bank is also interested in companies that pitched at Demo Day but did not make the final seven. “We like to say that acceleration didn’t end at the Demo Day but is just getting started. With each team we will look at the possibility of holding pilot projects both within Sberbank and with our partners – major Russian corporations,” he says.

“We have already held a special Sberbank evening where our senior executives took a closer look at the teams’ projects in order to work out how to integrate their technologies and what pilots to launch. We will release information about successful projects later.”

Looking east

The pace of Sberbank’s expansion into emerging technologies is enough to alarm its competitors, such as VTB Group, that they risk being outpaced. VTB recently announced plans to develop its own ecosystem, although CEO Andrey Kostin stressed it would pursue an alternative approach. “We don’t want to be Alibaba, but are prepared to be Alibaba’s wallet,” he said. “Sberbank wants to be Alibaba; this is the difference in our approaches.”

Each initiative promises to ease dependence on Western technology, particularly if Russian-US relations cool further. Sberbank is still under US sanctions, imposed back in 2014; as such, the bank could simply decide to bypass the country. “We have thought about holding a joint accelerator with a Chinese partner, but haven’t yet started considering this issue in detail,” says Mr Khasis. However, the bank has confirmed plans to join China’s banking payment system in order to speed up currency payments in the country.

Meanwhile, so far in 2019, Sberbank has announced several tech landmarks. They include the development of Auto ML, an algorithm that produces forecasts to match the work of data scientists and creates other models to solve application tasks quicker than a human. Following a pilot in January, the new algorithm will be employed in sales campaigns for the bank’s corporate and investment business.

The bank also expects to automate most of its foreign currency operations by the end of 2019. Having increased the percentage of clients’ foreign currency transactions processed by robot algorithms from 50% to 90% in 2018, its target is to further increase the figure to 99%.

There may sometimes be bumps in the road – Mr Gref recently revealed that AI glitches, although minor, had produced a significant loss – but Sberbank’s drive to become “the ecosystem of first choice” continues unabated.


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