On 19 December 2019, the UN General Assembly adopted a resolution, which designated 4 December as the International Day of Banks. We talked to Grigor Hovhannissian, Chairman of the Board of Directors of AraratBank, about the revaluation of banks, relations between banks and society, withstanding the challenges of the digital world, and overcoming the crises.

- It is common knowledge that by creating special observances, the United Nations promotes international awareness and action on certain issues. The proclamation of the International Day of Banks takes the banks to a completely new level. Why the banks have been considered at this level of importance today?

- The viability of the modern day economy greatly depends on the health of its banks and the financial system as a whole. The banks have evolved from mere commercial lenders to institutions that serve as a vector for sustainable development. Even non-profit and government agencies now realize that while being an embodiment of capitalism, the banks are essentially a public institution with an embedded social responsibility.

By declaring the International Day of Banks, the UN recognizes the vital role and significance of the Bank in achieving sustainable development goals, thus lifting people out of poverty and paving the way for general prosperity. Today, banking is entirely based on the trust of customers and society, and on the expectation that banks must adopt a responsible work style, that factors in the interest of its customers and the society as a whole. The success, stability and liquidity of the banking sector are conditioned by the long-term well-being of the society because banks also exist thanks to the resources drawn from the public at large: as such the financial resources of bank belong to the society and they must serve the interests and the progress of the society.

- Mr. Hovhannissian, you have a vast experience in diplomacy, you have carried out many important missions in different countries, you were the Ambassador of the Republic of Armenia to the United States, and took the office of the Deputy Minister of Foreign Affairs of the Republic of Armenia. Your transition to the banking sector was abrupt. How do you intend to localize your experience in the financial sector?

- Changes in my professional career were frequent and sometimes unexpected. The most recent change took place in the 11th year of my fruitful and successful diplomatic career. I think it is fundamentally beneficial for the private sector entities, especially the ones with large client base and outreach, to engage experienced professionals from public, non-profit sector in order to expand their perspective and gain a better understanding of public interest they should serve. In my opinion, the bank is a hybrid structure with the characteristics of private and public sectors. With its forms of ownership, the banking sector is, of course, a private sector. However, when performing its classic function of a financial intermediary it becomes a "public contract", the success of which arises from the interests of the bank, the state and the society.

The public interest has always been a priority for me, I have tried to serve it throughout my professional activity, and I continue to work in AraratBank with the same mission. The Board of Directors is the body that represents the public interest in a private structure. At AraratBank, the BoD members and I, as the Chairman of the Board of Directors, strive to integrate the projects tailored to the customer expectations into the overall strategy of the Bank.

And, of course, the international experience I have enables me to be useful to the bank in terms of expanding, strengthening and developing the network of its international relations. It is noteworthy that AraratBank has quite a track record of strong and lasting relations with international financial institutions, and we intend to maintain and further expand this network.  Today we are working in several directions: while we engage funds from IFIs, we also develop products that are more competitive, with affordable terms and longer maturity for our clients. Through various platforms, we also make internationally financial products and transaction also accessible and available to our citizens.

As they say, it’s not how much you make or have, but what you make of it that matters. Hence, in some ways we also try to educate and help our clients to use their resources efficiently and sustainably. Recently, AraratBank has started a similar cooperation with the Dutch development finance institution Triodos Investment Management and signed a bilateral loan agreement for a total amount of EUR 3 million for further support of local businesses in Armenia.


Focusing on green lending projects and supporting women in business, this loan will enable AraratBank to further expand its tailored financial products to meet the needs of SMEs, as well as will foster the development of this important sector.

- AraratBank owns a brand which is very valuable and dear to Armenians. How effectively do you think this advantage has been used so far? What new ideas are there to position it more efficiently?

- AraratBank bears the name of the most important symbol of all Armenians, which is a great honor and responsibility. Ararat symbolizes strength, stability, reliability, realization of goals and aspirations, which is reflected in the corporate culture, philosophy and activity of our bank. The area, where Armenia, Artsakh and Diaspora converge, is where AraratBank sees its role. We are a nation with a global, world wide network, hence, over time AraratBank seeks to become a partner organization supporting pan-Armenian programs and support the implementation of the ideas of all Armenians. Today we have many repatriates for whom AraratBank is in the active stage of developing programs. We will have the opportunity to present them in the near future. We eagerly stand by our compatriots from Diaspora who settle down in Armenia and we are ready to help them to integrate into the society and build their future in their historic homeland..

- Digital trasformation has become a priority for banks. In global markets, advanced approaches are aimed not only at financially successful customers, but also at millennials and zoomers. What ideas do you have for the development of the fintech sector?

- Like other Armenian banks, AraratBank has also started the process of digital transformation, which is evidenced by the sharp increase in the number of online and mobile banking transactions and users over the years. At the Board of Directors, we fully realize that the development of fintech is one of the pillars of the viability of financial institutions. The demand for digital technologies grew exponentially as a result of the pandemic and already today we find ourelves in a completely new reality. Now the millennials, zoomers and the representatives of my generation, the so called X-generation, not only are they willing to make seamless and contactless transactions, but they also expect prompt, decentralized and custom-tailored financial services, and are increasingly developing appetite for more complex financial instruments. The customer centricity is henceforth a high-tech: by using the capacity of artificial intelligence, today banks manage to predict customer behavior, assess their needs, and provide appropriate services and products. Today, AraratBank has adopted the strategy of developing and applying fintech in its activity in order to provide more affordable and accessible financial services.

- The year 2020 was a series of successive crises. Every crisis, no matter how unpredictable it is, yet has situational solutions. What is the role of banks in such situations? What are your approaches and vision for overcoming crises?

- The year 2020 has been tough for everyone and the yearend seems to be just as rough. Fortunately, and despite formidable odds, our banking sector remained stable and successfully withstoond several consecutive shocks. AraratBank has been operating normally without any disruption, and continues to deliver its service in full and to meet customer expectations.

There are different causes and reasons for crises, but they have their own cycles and never last forever. One should get prepared for an economic upturn and, eventually growth, already during the crisis, when it is still unfolding. Many financial experts now predict a growth of the world economy when the pandemic subsides, and in some sectors, such as technology, the growth is expected to be quite breathtaking. We must also be prepared to keep pace with that speed. We must get prepared to finance new sectors and segments of the economy, make serious investments in far-reaching areas, start long-term cooperation with the youth, startups, develop effective programs that do not require excessive collaterals and guarantees, foster technological development, and follow global trends.

At this stage, for the public it is essential to continue to have trust in the reliability and stability of our financial sector. The financial sector has already proven its resilience and with the public trust it will successfully transition from these testing times to a period of growth, which will not bypass our country.