Upon taking his permanent role as CEO of Advanzia Bank it was a “pivotal time in Advanzia’s strategic development”. One case in point: in February, the bank plans on moving into its new headquarters in the Emerald building in Munsbach. Developed by Anando Group, the building was designed with sustainable, climate-neutral concepts at the forefront.

“We have shareholders that are very occupied with ESG. We, as a bank, are occupied with that as well, and it helps that our shareholders are at the forefront of ESG topics,” Fafalia told Delano during an interview.

The CEO hinted that there will be other initiatives going live next year “which will have a big impact in how the customer sees and experiences us,” and Advanzia’s tech-enabled approach is key to further enhancing the bank’s interactions with its customers.

Focus on talent, digital transformation

Fafalia, who had been appointed interim CEO in March before taking on the permanent role, said the ambitions of the bank remain the same, even if dynamics change in different markets: “We do see significant growth ahead and have the opportunity to grow more in line with the track record.” The bank reported a €122m profit in 2022.

Accustomed to surprises that can pop up, having also been a long-standing member of the board of directors, Fafalia believes no challenge is insurmountable. Nevertheless, he cited the main challenges as finding the right people and talent to continue such growth, as well as coping with regulatory changes. Speaking in mid-December, the CEO stated that while the current interest rate situation “has very different dynamics for us compared to, let’s say, traditional banks,” that broadly, “challenges in 2023, 2024, are very different because things change quicker than they used to in the past.”

With Advanzia’s roughly 2.5m customer base, Fafalia also sees opportunities in the utilisation of AI to improve the customer experience. While the bank is already using it for scoring and creating models, he believes it could also further improve its customer service.

“We have many calls and interactions with customers where you could use AI as a first bigger step, not to make it more efficient, necessarily, for us--because the human touch needs to be there--but it will give the customer a much better experience, in that they’ll get an answer much quicker.” Here, once again, he added that attracting the right talent will be key.

Economic outlook

So what else is in store for 2024, from his perspective? “I think a lot will come down to getting control over inflation, and then you’d understand if these interest rates are peaking or not,” he said. “If you had asked me four months ago, it would have been different, the peak was probably ahead of us. It’s really hard to say.”

While he said that the bank isn’t that worried on the macro level, even as it keeps a close eye on it, “From my view, we have great data understanding of the credit risk, which is really key… It’s extremely important that we follow it carefully, we have it in our models, and that we work very closely with credit risk.”

Founded in Luxembourg in 2005, Advanzia Bank is a digital bank specialising in credit cards and payment solutions.