Tinkoff Bank Adds Online Financing Offers for Purchasing Used Cars

FACTS

• Tinkoff Bank partners with the online car selling platforms Auto.ru, and will be financing loans for Auto.ru customers interested in buying a second-hand vehicle.

• Tinkoff approves and issues the loans, while Auto.ru is in charge of securing the transaction as well as running background checks on sellers’ profiles and condition of the vehicles.
• Terms of the loan:
  • Amount: up to RUB 1 million (€12,800)
  • Term: 1 to 5 years
  • APR: 9.9%
  • Eligibility: used vehicles in circulation since after 2000
• Customer process: Customers may apply for a loan via Auto.ru website, from a vehicle ad, or through Tinkoff’s website, without having to specify which car model they intend to buy.
  • They fill out their application form online, scan their passport and driver’s licence
  • They are then contacted by an advisor within 24 hours to complete the application process
  • The amount is credited to a Black Card: credit card issued by Tinkoff Bank, enabling the user to take out the amount in cash, if he needs to.

KEY FIGURES (end 2018)

• 8 million customers
  • Aims to attract 20 M customers in 3 to 4 yrs
• $400 million revenue
  • Aims for $1 Bn in 3 to 4 yrs
• 12% share in the Russian credit card market
• 18,000 accounts opened each day

CHALLENGES

• Tinkoff Bank keeps consolidating their position as the second financial ecosystem in Russia, right after Sberbank. To achieve this goal, they try to include their technology in a certain number of digital customer processes.
• Their partnership with Auto.ru contributes to a similar goal: helping them enter the market for financing purchases of used cars online.

MARKET PERSPECTIVE

• According to Tinkoff Bank’s founder, they do not see themselves as a bank, but rather as a technological company with a banking licence. So much so that they may even be considering rebranding to just “Tinkoff” in 2019
• To this respect, their main competitors include search engines such as Yandex or Mail.ru. Yandex also stands out as a major payment player in Russia with a wallet named “Yandex Money” and their checkout service (Yandex Checkout).
• Tinkoff features online financial services, insurance policies, a MVNO, a tour operator, a ticketing service and they just launched a voice-based assistant called Oleg. This day-to-day companion is meant to assist their customers with managing financial transactions and administrative procedures.