Settlement Centre at VTB Bank: green, efficient and innovative.
As the world looks to the future, environmental, social, and governance (ESG) is at the top of the agenda for all major global banks. The Russian financial industry is no exception to this, and it is showing a growing interest in taking action across various areas in order to adopt ESG principles. We are on an ESG journey and at the moment only 10% of Russian banks apply ESG methods (according to Deloitte), however the majority (67%) are preparing for the transition to ESG banking, according to the Association of Banks of Russia.
At VTB Bank we recognise the responsibility that comes with being a global financial institution in stepping up efforts around increasing the adoption of ESG standards in all front and back office processes. This is why we took the decision to bring our ESG strategy forward by a year, for delivery in 2021, and we are proud that this commitment has been recognised by the PayTech Awards, after being named Best Green Initiative for our Paper-free Office project.
Our renewed focus on ESG has already seen results of an 80% reduction in paper usage at our Settlement Centre, with an ambition to make that number 100%. We are taking this seriously and are determined that all of our 2.7 million operations daily will be carried out digitally. Whilst hard copies used to be essential to banking procedures, this is no longer the case and new technologies allow us to carry out those tasks without a reduction in quality or safety.
We went from printing 1,051,201 documents in 2019 to 218,493 documents in 2020, which has saved more than 50 trees in just one year. The Covid-19 pandemic allowed us to review all of our processes and procedures to dramatically reduce waste. We’ve reworked the regulatory documentation and have developed paperless storage methods. We have also implemented a number of related initiatives including “Give a forest to a friend!”, aimed at restoring forests across nature reserves in Russia. The project has been running for 6 years, with more than 4 million trees planted.
To make a big difference you must start small, which is why even the smallest initiative contributes to broader sustainable goals and aspirations across the whole industry. That is why we collaborate with partners on green practices. For example, we provided a proposal to Russia’s financial regulator, the Central Bank of Russia, to eliminate the printed versions of all confirmations that could be provided online. It may take time to change age old practices, but we must innovate and deliver value.
Partnerships across the financial services can enable positive change and it is via close collaboration that we can contribute to a better future. For example, in June 2020, VTB partnered with Mastercard and the Foundation of the All-Russian Society for nature conservation to launch the “Mission: Clean Water” project, the purpose of which is to help clean up more than 146 reservoirs in eight federal districts of the country.
We have also started a trend of positive change within our own organisation with other VTB departments, such as lending for all credit processes, which are also now looking to follow the Settlement Centre’s lead on green initiatives, including the move to paperless. We started a bank-wide programme called Paperless Bank aimed at transforming all processes to paperless, and we have achieved the first results. Not only in remote channels, but in the branch network clients can buy a product or make a transaction fully digitally, without paper. More than 30% of documents with counterparties are also digital, signed with an e-signature. We are really keen to see this happen across the whole bank.
At the VTB Settlement Centre, our work is based on improving efficiency and ensuring frictionless processes. We have been recognised by both the banking community and a number of external accolades including JP Morgan Quality Recognition Award with MT202 STP Rate 99.97%, US Dollar Payments Straight Through Processing Excellence Award by Citibank, STP Quality Award 2018-2019 by Raiffeisen Bank International AG and Outstanding STP Rate by BNY Mellon.
We take this award-winning approach to our ESG initiatives, so whether it is creating new standards for global payments, or delivering for the planet, we are committed to a better future.
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