First of all, how are you and your family doing in these COVID19 times?
Eduards Lapkovskis: There is no doubt that pandemic has been challenging enough for both companies and each of us on the individual level. Apart from remote office routine and more cautious socializing, nothing much has changed for me on a private level. I am lucky enough to be living in Latvia where COVID-19 outbreak was slowed down before reaching the peak and infection cases here only amounted to a few hundreds over thousand. Now, as restrictions have been eased and emergency state in the country has been cancelled, we have partly returned to the office, but still keeping the option of working from home for a few days per week open.
This has also been a new experience for me as a manager as our company rarely practiced working from home until the pandemic. Such work organization pushes leaders to develop deeper trust in employees and letting go of hairsplitting, but rather focusing on overall goal orientation. I can agree with managers seeing this new work organization as the future for companies providing digital-based solutions as pandemic has proved this model to be rather effective.
Eduards Lapkovskis: Tell us about you, your career, how you founded or joined VIA SMS Group.
Eduards Lapkovskis: Prior joining VIA SMS Group, I have gained experience by working in various large financial institutions. I started to work with VIA SMS Group in its first year of operations when we launched consumer lending brand VIASMS.lv in Latvia. It was an exciting time as the industry was relatively new then and we were just acquiring our market share by living through the ups and downs. Now VIA SMS Group has grown into the international company that is present in 8 markets including Vietnam that is our latest venture. If we look back it is amazing how at the beginning a team of roughly 4 persons was executing all lending process by themselves and now we have highly skilled, global team specializing in various aspects of alternative finance business.
How does VIA SMS Group innovate?
Eduards Lapkovskis: Up until now, our approach has been to keep the key functions of the company in-house. As data analytics is vital element in lending business when building high-quality customer portfolio, we have a strong data science team with PhD degree holder as a frontrunner who are main innovators along the way. Customer scoring has never lost its importance over the years and it surely takes creativity to combine multiple factors affecting the potential outcome of the loan issuing to be compliant with regulation, ensure portfolio growth, keep default rates low and customer satisfaction – high. Because of changing nature of the legislative environment affecting consumer lending marketing is another field where we have to be innovative to stay competitive and stand out in the noisy crowd of consumer lenders.
How the coronavirus pandemic affects your business and how are you coping?
Eduards Lapkovskis: COVID-19 outbreak has surely affected many industries including fintech, also putting some pressure on VIA SMS Group. However, in the last few years, we have been working to diversify sources of company funding by establishing P2P platform VIAINVEST and digital payments platform VIALET, issuing company bonds, operating savings product VIASPAR in Sweden and, of course, intensively developing lending business in various countries, so despite the fact that we observed a drop in our volumes, we were fully prepared to move forward with the business and to introduce more strict measures if needed.
Currently I can say that rather conservative attitude towards spendings and diversified funding options helped us to recover from the crisis much faster. Also, the company was founded during the financial recession of 2008, so I believe that consumer lending will survive potential economic downturn and will become stronger, more resilient to changing operational environment.
Did you have to make difficult choices and what are the lessons learned?
Eduards Lapkovskis: As pandemic hit, we were looking for ways how to optimize company costs without losing effectivity. Unfortunately, we also were forced to make a decision of few layoffs – it is never an easy thing to say goodbye to someone who has dedicated knowledge and time to build something together and there is no “obvious” reasons for such step. In our case, those turned out to be only a few cases, but it is still a painful decision for both management and teams.
The other challenge was ensuring the work from home – we were never used to work-from-home practice on a daily basis; it was only practiced when some sort of emergency occurred, otherwise the whole team was usually present at the office. At the beginning of the pandemic we had only few days before the state of emergency was declared in Latvia to solve technical and organizational issues, so no interruptions in the processes occur. I think we did pretty good.
How do you deal with stress and anxiety, how do you project yourself and VIA SMS Group in the future?
Eduards Lapkovskis: Fintech is a very dynamic, breathtaking, but sometimes also a stressful industry to work in, so I believe all of my colleagues have experienced stress once in a while. Probably, the best way how to cope with stress is not to let it under your skin – it’s not a secret that everyone will definitely fail on the way to success, maybe even multiple times, but the failure does not define who we are. It is very important to be excited about something outside the work – sport, hobbies, spending time with family, anything. For me it is a time I spend with my family that allows me to take my mind off the work.
Who are your competitors? And how do you plan to stay in the game?
Eduards Lapkovskis: For a long time our main market was Europe, but recently we have partnered with another consumer lender TWINO to enter Asia-Pacific and explore consumer lending market in this region. Exploration of new markets is one of the main drivers of development as we have enough knowledge and experience to take a risk by entering completely new regions and markets. Asia-Pacific, Vietnam in particular has been challenging enough, but we are excited about what this venture will bring.
Regarding our competitors, as VIA SMS Group has a wide product portfolio, our competitor might be any fintech company developing mobile payments solutions, offering online banking services, P2P investments or online lending products. We are constantly looking for new opportunities in terms of both markets and products and are not afraid of challenges so up until now, this has been the main driver for VIA SMS Group.