Edward Mason
Boston Business Journal
Boston, Massachusetts
November 25, 2002

If you find the service at your local bank lacking, try opening a checking or savings account in one of the 15 former Soviet republics. You may be surprised.

More than a decade after the dissolution of the Soviet Union, and in spite of the capitalist immersion program the former USSR underwent in the 1990s, old habits cultivated and enforced by Marxist rule die hard.

So, former Communist bloc bankers are among an emerging class of executives traveling to the United States partly on the U.S. State Department's dime to learn how to do business by the American capitalist proverb, "The customer is always right." (Whether Americans really believe that aphorism is the subject of my forthcoming book, "Where the hell are your manners?")

One of those bankers is Oleg Betzel. At 26, he is one of Ukraine's young suits trying to adapt. This fall, he made the pilgrimage to Boston to learn about retail banking from $4 billion-asset Eastern Bank, which wields customer service as its weapon in the battle for customers against the Bay State big boys, FleetBoston, Citizens and Sovereign.

"I was surprised by how much attention was paid to the customer, making a good image of the bank, creating an environment where (customers) feel comfortable," said Betzel, an executive with the First Ukrainian International Bank.

Back in the day - the Soviet day - customer satisfaction wasn't a priority. Indeed, Betzel, whom Eastern officials say has a sense of humor about his country's totalitarian past, acknowledged that customer service was not part of the plan for a planned economy.

How quickly things have changed, though, with the help and contributions of people like Betzel.

Ukraine has had to do in a dozen years what it took America more than 100 to accomplish: create a fluid, working national banking system. "Ukraine got its independence in 1991" when the Soviet Union collapsed, Betzel noted. "We're building our banks from zero."

Banks in the heavily industrialized, 48 million-person nation on the Black Sea first specialized in lending to businesses, which needed capital and had collateral in exchange. Individuals, though, were slow to recognize the need for a savings account. And loans? By reputation, political dossiers were more common than credit histories in the former Soviet Union.

Betzel came to Boston last summer to study the U.S. banking system through a program operated by World Boston, which uses State Department grants to bring over businesspeople from the former Soviet Union. The purpose, said Brandie Conforti, the program's director, is to help those executives learn from us while living amongst us.

Betzel lived in Brookline while working at Eastern. His exposure to the ways of American bankers included time with many of Eastern's higher-ups, such as Stanley Lukowski, chairman and CEO, Richard Holbrook, president, and John Bitner, chief economist.

Although he was bullish about his stay, Betzel said as he prepared to depart at the end of October that not all of what he saw will be implemented back home. Tops on that list: electronic banking, which is prohibited in Ukraine.

"Unfortunately, we're limited by regulators," Betzel lamented. "I don't think we'll see electronic commerce soon."