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The personal touch in banking


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“We are quite ambitious in our growth and aim to double our total assets to half a billion EUR in the next three to four years,” enthuses Jaka Vadnjal, President of the Management Board of LON d.d. since 2015. LON offers clear banking services with a personal touch to consumers and businesses alike, and intends to develop its private banking services as well.

“We are a challenger. The big banks are becoming even bigger through mergers and acquisitions, and we believe there is much room for a boutique bank such as we are,” Mr. Vadnjal adds. He is quite confident that the personal consultancy and services that LON offers add great value to its products and will remain important in the future. This applies not only to consumer loans and mortgages that require detailed information and tailored advice.

The bank also offers clear and friendly advice for young people who are getting a grip on how to handle their finances, or detailed explanations in person to elderly clients who are new to mobile banking.

“We see the improvements in banking technology as an important opportunity for our sector, and quite early on we started cooperating with FinTech companies,” observes Mr. Vadnjal. In September 2017, LON launched an interesting project: Through its classical ATMs it sold vouchers that could be exchanged for Bitcoins. Although the regulators put a hold on these activities eventually, it was quite successful at the time and turned out to be an opportunity to learn how to cooperate with companies from different cultures.

“Another important FinTech project that is already in operation is our offering of consumer loans at the points of sale of our retail partners,” the President adds. Consumer loans are a key financial product provided by LON, that allow for innovation and application of new technologies.

“For instance when someone wants to buy a new television in an electronics store but needs some extra money to do so, the retail staff can offer him a consumer loan at LON,” Mr. Vadnjal explains. For this to work, LON needs reliable data that the consumer will be able to repay the loan and it has to take into account recessions and the fact that a certain percentage of loans may not be paid back.

We are a challenger. The big banks are becoming even bigger and we believe there is much room for boutique banks like LON. Jaka VadnjalPresident of the Management Board
Jaka Vadnjal, PhD, President of the Management Board of LON d.d.

And once the consumer makes the decision to buy that particular product, the amount of money involved in the loan should be available at once, from a few hundred EUR up to 30,000 EUR. This particular project was started in the autumn of 2018 and might even be exported across the Slovenian borders if it proves successful.

LON was established in 1992 by about 20 people who were active as local entrepeneurs in Kranj. They were far from pleased with the banking services that were available to consumers and small businesses in their area. Kranj is the fourth largest city in Slovenia and is located half an hour by car from Ljubljana.

It was just after Slovenia declared itself independent from Yugoslavia and at the time, most financial institutions were focussing on the Slovenian capital. The regulatory demands were not that high and LON started out as a savings bank. By 2001, the regulatory demands increased dramatically and hence the overhead costs as well.

“This forced us to decide whether we would want to remain a small organization that was active only locally, or grow substantially,” Mr. Vadnjal recalls. “The owners decided to back up the company with additional capital and expanded the business.”

LON set out to cover all banking functions and expand its local and personal approach to all of Slovenia, opening one branch a year since then. Currently, the bank is truly national with eleven branch offices all over the country, and in the future the company will not limit itself to Slovenia.

“From 2015, when I became the President of the Management Board, we drafted a new strategy and decided to focus on more than consumers, micro-businesses and small and medium enterprises,” says Mr. Vadnjal. “We set out to improve services for larger companies as well, and also added solid private banking services that specifically target wealthier individuals.” LON introduced additional retail services and high-level added value services, and in the long term these activities will expand into a substantial asset management portfolio.

The activities and expansion of LON have not gone unnoticed. “The acclaimed Slovenian magazine Moje Finance named us the most favourable retail bank of 2018,” Mr. Vadnjal proudly states. “We will keep distinguishing ourselves with personal consultancy, and for the second year we managed to maintain the highest interest margin in our sector!”

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