20 Things You Didn’t Know about Tinkoff Bank

Tinkoff Bank

There’s no doubt about it, Russia has been in the news a lot as of late. That might make you wonder about Tinkoff Bank, as it’s based in Moscow. The truth of the matter is that a lot of Russian companies are facing sanctions right now, especially banks. Somehow, this one has managed to avoid all of that. If you’re curious, here are 20 things about the bank that you probably didn’t already know that will help answer your questions.

1. They’re the only bank not included in Western sanctions against Russia

When the news about Russia invading Ukraine hit, Western sanctions came swiftly. For the most part, that first wave of sanctions involved more or less neutralizing all Russian banks, with one major exception. This particular bank was spared from those sanctions. Why is this so? Authorities believed that there had to be at least one bank that could be left operating in the country in order to prevent the collapse of the global economy. This was the bank that was ultimately chosen. You’ll see why later on.

2. They’re currently the only option for global companies to send and receive payments

At the moment, they’re also the only method that global companies have for sending and receiving payments when they have business ties to Russia. The recent sanctions have hit tech companies especially hard, as a lot of them have ties to the country in one capacity or another. Fortunately, they’re still able to receive their payments but no one knows if that’s something that will last indefinitely or if this bank will also be included in sanctions at some point in the future.

3. The company is known as a neobank

If you’re wondering what a neobank is, you’re not alone. This particular bank, and others like it, are referred to as such because they are operated entirely online without any brick-and-mortar locations. A lot of them cropped up after the financial crisis that occurred at the end of 2006. In the United Kingdom, they are often referred to as “challenger banks.”

4. This bank was also founded in 2006

Considering the fact that the financial crisis that spurred this and many other banks occurred throughout 2006 and 2007, it shouldn’t come as much of a surprise that this particular bank was also founded in 2006. As a matter of fact, it was founded specifically as a way to make it easier for people to bank and to ease their financial burdens, largely by doing business differently than most traditional brick-and-mortar banks in the country.

5. They’re a major player in Russia’s economic system

Even before all of the sanctions, they were easily considered one of the most important banks in the country. As a matter of fact, they’re known for providing the second largest number of credit cards to Russian citizens out of any bank in the entire country. As if that’s not enough to get your attention, they’re very much on track to become the bank that provides more credit cards than anyone else in the very near future.

6. They are the biggest digital bank in the world

They are also considered to be the biggest digital bank in the world, based on the number of customers that they have. That’s right, this bank has more customers than any other digital banking operation. That was true before the sanctions began and it’s even more true now. This also played a major factor in the decision not to place sanctions on this bank when deciding which financial institution would be left free of them for now.

7. It’s based on a popular American bank

Oddly enough, the bank is actually based on one of the most popular American banks in existence, Credit One. When the bank’s founder, Oleg Tinkoff, was looking at models of digital banks from which to base his own, this was the one he decided on. As such, there are a number of similarities between Credit One Bank and Tinkoff Bank.

8. American companies have also invested in this bank

It’s true, American companies have invested in the bank, despite the fact that there seems to be so much tension between Russia and America at any given point in time. As a matter of fact Goldman Sachs was a major investor in this bank. Had it not been for their investment, it would have been much more difficult to get the bank off the ground.

9. It’s founder put up an initial investment worth several million dollars

Of course, the bank’s founder also put up more than his fair share of money. As a matter of fact, he put up no less than $70 million of his own money in order to get the bank started. Obviously, this was something that he believed in wholeheartedly or he never would have put up so much money with the chance of losing every bit of it. Fortunately for him, his plan worked out.

10. They almost went to court in 2013

In 2013, the bank was sued by Dimitri Agarkov, the individual who had written legal agreements for the bank about their credit card usage. He had written these agreements back in 2008 but claimed that the bank had not honored their part of the agreement as far as his work in the matter was concerned. The two almost went to court but they eventually decided to settle their differences outside of the court system for an undisclosed amount of money.

11. The bank is an award-winning institution

Global Finance magazine named this bank the Best Internet Retail Bank in Russia in 2015. As it turns out, this wouldn’t be the first award that the bank would win. More on other awards will be discussed later. For now, it’s important to realize that this was a major milestone for the bank, especially when you consider the fact that only a few years prior, the idea of a fully digital bank in Russia was something that many people believed would never happen.

12. The company also has its own subsidiary

These days, the company has their own subsidiary, Tinkoff Travel. They have an app for the bank that links to this particular subsidiary. It allows you to book movie tickets, hotel rooms and even reservations for restaurants. Of course, everything that you book can be linked to your bank account so that it’s all paid for as soon as you book it. The idea is to make the app something of a one-stop shop where people can do their banking and book all of their travel and entertainment needs in one place.

13. More legal troubles came in 2020

Eventually, the bank’s founder was indicted by the United States Department of Justice for questionable business practices. It was believed that he was skimming money off the top from virtually every customer he had. At the time, he owned roughly 40% of the shares in the bank and there was a question as to whether or not the establishment would survive taking such a hit. Despite his indictment, the bank does continue to operate. As a matter of fact, it bounced back fairly quickly after his departure.

14. Despite everything, the bank is still turning a profit

Just before the sanctions began, it had been reported that the bank and was actually making a 33% profit, something that a lot of people didn’t believe would be possible after Tinkoff’s departure. As a matter of fact, many people actually began to consider the possibility that the bank would do better without him than it had done while he was heading everything up. In reality, it doesn’t seem that his indictment in the United States or his departure from the bank have had a major impact on the financial institution’s ability to operate successfully.

15. The bank was recognized again in 2021

This was the year that The Banker named the top 50 banks in Russia and Tinkoff Bank came in first place. Obviously, the bank had managed to weather the storms from the previous year and find its own footing in a major way. It seems that this continues to this day, despite everything going on in Russia at the moment.

16. Even Forbes magazine gave them an award

As recently as last year, Forbes magazine named them one of the five best banks in the entire country. They may be a bank that operates digitally throughout Russia, but they have clearly become a global force. It’s easy to see why so many people decide to utilize them when they’re doing business on a global scale, as this bank is now recognized as one of the best and most trustworthy banks in Russia.

17. The bank has now gone into portfolio management for its customers

Considering the fact that the bank previously went into what essentially amounts to the travel industry (think back to Tinkoff Travel), it really shouldn’t come as any surprise that they have expanded further. This time, they’ve gone into portfolio management. Customers who want to invest in the stock market to grow their portfolio can now get asset management directly through the bank as opposed to being forced to go through someone else entirely. The idea is to streamline the process and give customers an opportunity to benefit from asset management from someone who has intimate knowledge of their bank account and thus, their finances. In theory, this is supposed to make it easier for them to get the advice they need about participating in investments that would truly work best for them as opposed to going through a third party that may or may not have this knowledge available to them. From the bank’s perspective, it’s all about diversifying so they can make more money.

18. The bank seems to have some music fans in its midst

It shouldn’t be that big of a surprise that the bank sponsors certain large-scale events, as businesses do this type of thing all the time. Granted, it is a little bit different for a lot of companies in Russia, as the overwhelming majority of them don’t sponsor outside activities. By the same token, it’s a little different when you consider the fact that there is no physical business to be had here because you’re dealing with something that is operated entirely online. Nevertheless, Tinkoff Bank recently sponsored a Depeche Mode concert, something that comes as a surprise to some individuals who are familiar with politics in the area. Nevertheless, it seemed to be a major success so there is a fairly decent likelihood that they will do something similar again in the future.

19. They even have their own e-commerce department

Speaking of expanding, the bank has also expanded into another area where they have their own e-commerce division. They realize that e-commerce is a major factor in today’s world and they’re trying to make it as easy as possible for their customers to order items online or even to sell their own items online with as much guidance as possible. It would seem that the bank is attempting to diversify into a number of different areas so that they can remain relevant as more than just a bank. At the same time, they’re also helping their customers grow their portfolios, buy and sell with confidence and better manage their funds.

20. They appear to have a sense of humor

Last year, the bank also started sponsoring a Russian comedy competition that’s televised called “KVM.” They have a three-year contract with the show. Currently, they’re using it as one more way to make customers aware of their services while simultaneously increasing their level of popularity.

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