The coronavirus pandemic and its impact on the economy of Kazakhstan has prompted DBK to review its long-term development strategy and rethink its current business processes in order to keep its position as the country's largest financial institution and a leading operator in the assessment and structuring of major infrastructure and industrial projects. Thus, the meeting participants identified and discussed 5 key areas that need to be actively developed in the coming years.
Firstly, to reduce the share of project financing in the quasi-government sector and increase support for private enterprise, while heading for a sustainable development. According to participants of the meeting, such a step will allow the Bank to optimize the efficiency of capital distribution, diversify risks and strengthen its sustainability. Moreover, support was expressed for the initiative to use a “sustainable development assessment map”, which will make it possible to distribute capital efficiently and optimize human resources, while using and developing local talents and local intellectual resources. The crisis has highlighted the need to develop effective projects such as eHealth, e-commerce, and to review the approach to collateral valuation.
“Today's meeting is an example of best corporate practice, where members of the Board have the opportunity to convey information to both management and subsidiaries. Development Bank of Kazakhstan is an effective tool that helps to diversify the economy significantly. Whereas in previous years we were engaged in infrastructure changes, in particular, we had big problems with the fuel and energy sector, today there are no such difficulties - we have enough of our own oil potential and together with our partners we have fully supplied the country with light oil products. The next step that we plan to take as part of the new strategy is to actively finance the private sector, with a strong focus on sustainable development and support for renewable energy. We already have interesting and successful cases in this area. Moreover, we have taken note of the President's assignment to develop the waste-to-energy sector and are already working on a financing structure for recycling. Today we are actively working with such structures as AIFC, Kazakh Invest, KSM and Direct Investment Fund,” mentioned Abay Sarkulov, Chairman of the Management Board of DBK.
The second key area of the agenda has become the attraction of a wide pool of talents within the sustainable development, which includes not only men but also women of different races, ages and physical abilities. According to the roundtable participants, the ability to attract talent is a key to sustainable development. DBK has achieved great heights in this area and, in a sense, has become an example to others, but in the future the Bank needs to further promote such inclusive efforts, as they will have a positive impact on DBK in general and its international credit rating in particular. For example, according to Marcia Elizabeth Favale, independent director of DBK, Goldman Sachs, one of the world's largest investment banks, refused to accept companies for IPO if there are no women in the board. Thus, such efforts should become part of the “Sustainable development assessment map”, which in turn will open the door for joint investments with foreign partners.
Third, the round table participants discussed the need to use international best practice and current best practices to improve the Bank's operations in the realities of Kazakhstan. At the same time, participants agreed that it is not possible to copy them, taking them for granted, instead it is necessary to regularly and systematically update the catalogue of international best practices, policies and tools of comparable development institutions and international organizations, adapting them to DBK and transferring them into its effective tools.
The issue of digitalization has become the fourth point discussed at the meeting. The participants unanimously agreed that today the issue of IT development is not a luxury, but an urgent need. The pandemic has clearly shown that companies with a strong digital culture have significantly greater performance and employee involvement, which minimizes disruptions, helping to create a collective micro productive environment. Modern technology, especially machine learning applications, are set to become part of a renewed strategy for DBK, as technology is more than just risk management. Moreover, the Bank needs to promote this idea among its subsidiaries, in particular the Industry Development Fund. At the same time, special attention should be paid to technologies that increase communication efficiency and optimize productivity.
The final point of discussion has become the need to develop institutional knowledge and mechanisms to enhance impact on the value chain. In other words, participants emphasized the importance of strategic recruitment, preservation of institutional knowledge and training in the value chain - all these will increase the Bank's competitiveness.
Thus, the round table participants developed the draft new strategic initiatives, which will be included in the basis of the Bank's updated objectives until 2023.