The Quest for New Customers

Garanti Bank is Turkey’s second largest private bank by asset size. The bank has more than 8 million customers, 770 branches – including five foreign branches and four international representative offices – and over 2700 ATMs. Garanti also has 1.4 million monthly active online banking users. In May 2009, the bank launched an ‘online only’ international money transfer service with Western Union. This service allows Garanti Bank customers to both send and receive funds internationally through Garanti’s online banking platform, which is linked into the Western Union network completing the transaction. The Turkish bank branded and built its own proprietary system for its online bank.

Remittance Solutions

Remittances are an important area of business for Garanti Bank. Turkey as a whole is a large market for remittances because it is a large sending and receiving nation. Assistant general manager at Garanti Bank, Ali Fuat Erbil, explains: “Turkey is one of the largest markets in the world in terms of remittance business. So as one of the largest banking players in Turkey, Garanti Bank has to be in this business, so it is very important for us.” The bank developed an independent domestic remittance solution but felt it was too large an undertaking to extend internationally, which is why Garanti decided to co-operate with Western Union for international money transfers.

“We launched the service in May 2009. And because it is only for our online banking platform, it is a new approach to offer Western Union services. Our branches are not serving Western Union customers and we are not doing any transaction on behalf of Western Union in the branches – this service is only online, for both inbound and outbound funds. With this functionality it is the first of its kind in the world with Western Union,” says Erbil.

The service allows customers who want to send money abroad to do so by logging into Garanti’s online banking site, then choosing the function they wish to use and the amount they want to send. Garanti sends the entered values to the Western Union system, and then the bank and Western Union clear the transaction between themselves. The receiving customer will be able to log into the online banking platform with a reference number – the Money Transfer Control Number (MTCN) – and the money appears directly in their account. The interfaces were developed by Garanti bank, but are all connected using the Western Union system.

Gaining Marketshare

The relationship has been successful, says Erbil. In just a short time Garanti Bank’s internet platform has been very successful in the Turkish market. “With only this online presence we already see significant growth in Western Union money transfer transactions within the past five or six months,” says Erbil. Another success is that the demographic being attracted to the online-only service is a wealthier segment than expected. Erbil explains: “A different segment of our customers are now using Western Union with this functionality. Traditionally more lower income groups are interested in international money transfers, but in our case the upper income segment of customers are using the service.” Erbil puts this down to the convenience of the online service.

Erbil says linking up with Western Union was an obvious fit for the bank. “First we were attracted to Western Union because of its size and unparalleled agent location count internationally, and second because of the openness of the relationship.” Erbil adds that the two companies’ teams are very comfortable with one another, which he says has helped to create the trusting co-operation that now exists. This agreement is in line with Garanti Bank’s move to focus more on its retail banking sector. Erbil says: “Because of the current climate we are trying to leverage retail banking as much as possible.”

Choosing the Right Demographic

Interestingly, Erbil says the launch of the new service has not led to an upswing in customer numbers at Garanti Bank. “To be able to use this service you have to be a Garanti Bank customer already, so I don’t think that we are gaining customers. Since they are already Garanti customers, Western Union functionality was one of the services to be cross-sold, rather than getting them in with Western Union and selling them other banking products. So it is the reverse in our example, partly because we are in an interesting position of only offering this service online and because of the demographic of the people are using our services.

“Being the first bank to make ‘online only’ Western Union transfers is a real success for us. But we are still trying to add some innovation to the existing system. Other than just online banking, we are working to offer Western Union services through other alternative delivery channels, such as mobile banking, ATMs and call centres, to interact with different segments.”


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