About Bruce Pon
Bruce Pon was born in Canada. He graduated from Saskatchewan University in Saskatoon (Canada), from the Engineering – Agriculture and Bioresource faculty. He is currently studying innovative business at the Massachusetts Institute of Technology, Sloan School of Management. From 1996 to 2002, he worked in the international consultancy company Accenture in Canada. Then he moved to Germany, where from 2003 to 2008, he was involved in IT projects at Daimler Financial Services AG in Berlin. In 2009 he became one of the founders and partners of Avantalion International Consulting GmbH, which provides consultancy services in the financial field. He has been living and working in Moscow since 2006.
Bruce was born and grew up in a small town in the North of Canada which had only one library of a few shelves for the whole town. While still at school, Bruce read every book in it from cover to cover. At 17, he entered the agricultural department of one of the most reputable universities in the country, where he chose energy-saving technology as his speciality, with advanced study of water resources. But straight after university, he went into consultancy, and became involved in a no less important sector – IT technology in the financial sector. As one of a Canadian Government working group, Bruce was concerned with the development and installation of the social security system, which is still in use now. At the beginning of the millennium, Bruce moved to Germany, and from there to Moscow.
– Five years ago I was invited to work in the Moscow branch of Mercedes, says Bruce. A year later I returned to Germany, and with a partner, set up Avantalion Consulting. We help in starting up financial projects and opening banks in various countries, particularly in developing markets. I am personally responsible for projects in Russia.
Bruce first came to Moscow in 2006. But he didn’t much like it here.
– It seemed to me as if I had gone back in time to the last century. Secretive, socially cautious people, an unaccustomed way of doing business. I had never come across this before, admits Bruce. Maybe I got the wrong idea, because I didn’t have much to do with Russians at that time.
But his impressions gradually changed. Bruce now has a quite different relationship with the Russian capital and Muscovites.
– The present generation of Moscow entrepreneurs is quite different, he says. They are young (many of them start their business at the age of 22-23), active, erudite, with their own particular views on the reality around them, having an influence on the environment and on the city’s culture. I like the fact that Russians understand present-day trends and use world experience in conducting business. Business in Russia has become a lot more open. Moscow today is a much more friendly and relaxed city. I particularly like the parks and restaurants here.
Bruce often has to cross the Russian border – about once a month. Each year he has to get a new visa – the visa-free travel between Russia and the European Union, about which they talk so much in Moscow, has not yet been introduced. It’s a bit of a bother, of course, but you can put up with it.
– I know what documents are required and how they should be filled in, so I bring them all together. The staff in the Russian Embassy recognise me now, and it only takes a couple of hours to complete everything, says Bruce, smiling.
It’s easy for a Western person to come to Moscow, but it’s obviously quite another matter to open your own business.
– It’s always difficult to start a business. It can be compared to the birth and upbringing of a child. After all, your business is your child. And wherever you open a business, the most important aspect is its idea, mission and general view. If you have an excellent idea, if you can offer your product to people for what they are prepared to pay, this works everywhere. Moscow is a very suitable place for putting a business idea into practice. The only thing required of a foreigner starting up a business in Moscow is that he should try to understand Russian culture and attempt to adapt to it.
The only thing required of a foreigner starting up a business in Moscow is that he should try to understand Russian culture and attempt to adapt to it.
Avantalion provides consultancy services in the field of car financing, infrastructure innovations and the management of business processes and projects. When Bruce first came to Moscow, he saw that credit for cars was developing fast here, and special banks were opening for the purpose. He realised that he could be simply irreplaceable. And that was how it turned out.
– We have hardly any competitors, because our company is the best, in fact the only, expert one for car financing in the Russian capital. Sometimes we cooperate with major consultancy firms and software producers – IBM, Diasoft and Ernst & Young. We consider our greatest success to be a new bank to open its doors. Thanks to us, this has now happened twice in Moscow.
Bruce Pon’s company does not particularly need to advertise itself, it is already well known in the professional community. There is no lack of clients either. Any commercial organisation dealing in car credit, and particularly one planning to open its own car credit bank, will be glad of Avantalion’s services.
Aleksandr Koloshenko, President of Toyota Bank:
“There are more than 90 auto-banks functioning on the Russian market today, of which only a few dozen are actively working to promote the product. The aim of an auto-bank is to attract, hold and retain clients for future car purchases. Auto-banks don’t have luxury offices in the centre of Moscow. There is no network of branches. They employ no more than 100-150 people, and are located next to the distributor, because their main job is to sell cars. The Russian car market differs from the Western one in that in this country, people tend to buy a car outright, and become its rightful owner. In the West, they have long been living by a different principle: the client pays an initial amount on a car, and then pays a small sum of money every month, then in two or three years goes back to the dealer, turns in the car and chooses a new one. In Russia, only Toyota Bank offers this service. In my view, the car credit system will develop very actively. In time, the dealers will pay attention to the banks of their own producers, and the market will grow by 50-80%. People will eventually realise that to pay out the full cost of a car at a loss to their own pockets is unprofitable. It is much simpler to pay an initial amount, pay a certain rate of interest, and after some time, move to another car with no significant risks to themselves.”
– But we don’t only operate in Russia. Our company is running several projects in other countries. I am currently spending about one week a month in Moscow. I hope in future to live and work longer here.
Avantalion does not need a Moscow office – Bruce works in the offices of his clients. He lives in the Taganka district, where he rents an apartment in one of the historic buildings constructed in Stalin’s time.
– We have a very young team, only about twenty of us. In our business, experience is the main thing. For example, I am 40, and I have spent almost two decades in this industry.
Bruce does not work alone, of course, He is helped by local specialists and freelancers. Fortunately there are enough qualified personnel in Moscow.
– The standard of education in Russia is very high, says Bruce. I don’t know the finer details of the education system here, and I have no idea how universities are run, but their graduates are cultured people in the highest degree. I have worked in many Asian countries, but I have never met so many educated people. If you compare it with the level of education in the West, it comes out about the same. The only difference is that in Europe, university students are on average four to five years older than in Russia. At the age of 26 or 27, they have much more experience, but when they acquire families, they lose interest in studying. But Russian students, who start families as early as 22 or 23, considerable outdo Western students in energy and dynamism. There are many qualified specialists in Moscow, and they are much more ready to change. In Germany they stay in one job for decades, but here there is a new turn in their career every couple of years. After they’ve worked for six or nine months, they are dismissed! This shocked me at first. My career has gone quite differently. I have spent at least five years in each job.
Of course, if an employee has worked in one company for several years, this demonstrates his loyalty. However, everything is developing so dynamically and changing so rapidly in Moscow that the new generation of entrepreneurs and specialists is trying to make use of this and find the best place for themselves. It seems that Bruce likes this.
– In Moscow, people are not afraid of drastic change, they are always eager to learn something new, and that is very good, he concludes.
Yevgeni Davydovich, acting Chairman of the Board of Svyaznoi Bank:
“A lot of i’s will have to be dotted this year. The rules of the game for the retail bank market are changing radically. From July, banks dealing in retail credit must add extra funds to their capital, since the standard of capital sufficiency for banks with high credit costs (and this includes high-risk retail credits for clients “from the street”) will begin to be calculated with a multiplier. This means that active development will only be possible for those banks which are willing to increase their capital considerably and develop retail credit as a strategic line of business, rather than chasing after instant profit. Due to the need to adapt to the new rules, the growth of bank business this year is expected to be much less intensive than it has been for the past two or three years. In particular, our bank plans to increase its assets by 20-30%, whereas in 2012, we doubled them. But seeing where we are starting from, such figures are good. Also, the reduction in the rate of growth of development of retail credit has a positive effect. The system will become more stable. The banks, being unable to provide credit to so many borrowers, will prefer more reliable clients, and the overall quality of the credit portfolio will improve. The role of remote transaction services, in particular the internet and mobile banking, will also continue to grow stronger. Many years of effort by the banks to explain the advantages of cashless payment have led to a position in which cashless transactions in the economy have at last come to exceed the number of cash transactions. Paying for services remotely is more convenient and profitable than having to draw cash from ATMs or banks.”
There are also other distinguishing features of Russian business culture which differ greatly from the West at the present stage of our development. And not so much because the management is inclined to be high-handed (though this is not uncommon), as because employees prefer just to carry out their specified tasks rather than showing initiative.
– Here is a typical Moscow story: the boss sacks someone and tells him: “I took you on because you are young and clever, but you have not achieved the financial results I expected of you”. And the employee replies: “But you don’t tell me what to do!” This is a striking example of Moscow business culture. On the one hand, energetic young people aiming for success, and on the other, believers in the command system, who wait for instructions from above. Such people are not ready for complete independence.
Speaking of Moscow’s business culture, we cannot avoid the notorious problem of corruption. Is corruption as all-powerful in Russia as Western politicians say it is?
– I have worked with various companies in Moscow, including major international corporations, and I can assert quite categorically that I have never once come across corruption in the banking business, declares Bruce firmly. The Russian Central Bank monitors everything thoroughly, so the situation in this sector of the economy is the same as in any Western country. Bureaucracy, that’s another matter.
Bruce thinks that Russian bureaucracy, with a history of many centuries, is the main difficulty for a Western entrepreneur starting a business in Moscow.
– Every country has its own problems, he says, developing this thought. – You find bureaucracy everywhere, even in Germany. In Moscow, the situation is clearly improving. Moscow is moving in the right direction, and that’s the main thing. I live in Moscow and Berlin. Berlin is now probably the most dynamic city in Europe. By comparison with other European capitals, it is changing extremely rapidly. But Moscow is changing even more rapidly. This is really a place worth coming to. Five or six years ago, when Moscow was the subject of conversation, all I heard was: It’s dangerous there! There were even special courses for those going to Mexico, South Africa and Russia. Now, no-one would think this. Maybe it is safer in China. But if Beijing is the steadiest place, Moscow is the most dynamic. I have really come to love Moscow and the Muscovites, They have passion, and this makes a very good impression.
By the way, Avantalion International Consulting has this slogan: If you are not passionate, you won’t inspire others. This is important in any business, but particularly in consultancy. Bruce himself is full of passion, in whatever he is doing or saying.
– I have an explosive mixture of Asia, North America, Germany and Russia boiling up inside me, Bruce stresses. Moscow is an important part of my life.