TAS Group, a financial and industrial group owned by business mogul and veteran politician Serhiy Tigipko, is launching a new mobile-only bank, Izibank.
Tigipko’s daughter Anna Tigipko, who’s leading the project, announced the launch in an interview with Novoe Vremya magazine.
The internet banking tool is now available as a beta version. It is expected to release 300,000 cards by the next fall, according to Anna Tigipko. It will operate under the banking license of TAScombank, a bank from the TAS Group.
Izibank’s services will be accessible exclusively online via a smartphone app, falling under the category of a neobank, or a financial technology firm without physical branches.
Its main competitor, Monobank, is the largest neobank based in Ukraine with over 2.5 million users. Monobank, the first-ever Ukrainian neobank, was formed back in 2017 by former top executives of PrivatBank – Dmytro Dubilet, Mikhail Rogalskiy and Oleg Gorokhovskiy – who left PrivatBank following its nationalization in 2016.
Monobank operates under the banking license of Universal Bank, another bank of the TAS Group. By launching Izibank, TAS enters a competition with the group’s partner.
Yet Tigipko, the founder and head of the project, says she is convinced that there is space for two active players on the market and that the competition will ultimately benefit the Ukrainian consumers.
“We are very similar to Monobank in terms of concept and functionality,” she told Novoe Vremya. “But I wouldn’t rush to compare us. We are unique in terms of our story, positioning, and strategy.”
Both TAScombank and Universal Bank are ranked among the top 20 largest banks in Ukraine and together had around Hr 1 billion ($41 million) in profits in 2019. Serhiy Tigipko, who owns the TAS Group, was a co-founder of PrivatBank, Ukraine’s largest bank. He ran it in its early years in the 1990s before switching to politics and his own business projects.
In an interview with the Kyiv Post in 2018, Monobank’s Dubilet refused to elaborate on the terms of Monobank’s agreement with Universal Bank, saying only that the conditions are “commercial.”
If Izibank manages to mirror the success of Monobank in Ukraine, it will cast an even bigger shadow over traditional banking online services such as Privat24 of PrivatBank, according to Anna Tigipko.
“Today we see a lot of traditional banks trying to adapt to the modern-day tech-friendly user,” she told Novoe Vremya. “But much of the developed technology and IT systems inherited from their past is of poor quality and no one has managed to create a truly decent product.”
In order not to fall into the same trap, Tigipko says that TAS Group has decided to launch Izibank as an independent project rather than an extension of the TAScombank, with about $2 million already invested.
Furthermore, the bank’s team of about 170 people employs IT specialists from outside the banking sector as well as young trainees for the customer service department. This, claims Tipiko, will help Izibank become a modernized app that easily communicates with its target audience: middle-income Ukrainian millennials aged 25-35.
Under the motto “Izibank – easy life”, the bank promises to be a better, faster and cheaper alternative to traditional banking systems with the help of its user-friendly technology.
As stated on the bank’s website, the lax tariff policy gives special advantages for Izibank users like a longer grace period that allows customers to delay short-term loan repayments for up to 72 days and a 1% cashback on all purchases regardless of product categories.
The users also won’t be charged for money transfers, cash withdrawals/replenishments from the bank’s ATMs, and house utilities payments.
Tigipko believes that the app will break even on its costs after two years and further suggests that the financial backing of a traditional bank, like TAScombank, is a good thing.
“We saw what happened with neobanks operating in Europe,” she says, “Most of them have not become profitable yet, and very few of them survive without the backing of an experienced partner like a traditional bank.”
