Taking digital banking to the next level in CEE in 2021
Retail customers used extensive digital banking during the Covid-19 pandemic, as street offices remained closed and cash transactions fell. As a result, many banks are rethinking their digital strategy, Rob Langston reports.
Local demands around the world to prevent the spread of the coronavirus have increased retail customers in ways few could have imagined before the pandemic began. Covid-19 acted as a catalyst for long-term trends that were already underway before the virus reached Europe.
A trend that has begun in recent years is the use of digital banking by consumers, as offices are still closed and many aspects of spending and saving have been brought online. During the pandemic, the digitalization of global businesses took a leap that would take five years if the crisis did not exist, said Pierre-Yves Guegan, UniCredit Sales Manager for Central and Eastern Europe (CEE).
The pandemic has significantly accelerated the digitization of our products and services that were already underway [across the region], he adds.
The transition to digital banking has been underway for many years before the Covid-19 boom, and SEOs are more likely to get involved than their peers in Western Europe. Guegan reports that UniCredit CEE enables retail clients to perform fast digital banking transactions in the region, particularly in countries such as the Czech Republic, Hungary, and Romania.
Our customers are rapidly adopting digital solutions and active digital users are still growing with digital sales, he says. We are also seeing an acceleration in the service model as fewer customers enter our facilities, paving the way for the future development of our omnichannel service model.
Mastercard’s Evolution of Banking 2020 survey found that Eastern European users are much more optimistic about digital banking platforms than their Western counterparts. Exactly half of the Eastern European respondents regularly carry out financial transactions online or via an app, compared to only a third (39%) of Western Europeans.
Pawel Rychliński, president of the CEE Division of Mastercard Europe, says that although Covid-19 has undoubtedly a significant impact on the digital transformation of everyday life, there are historical and cultural reasons why Eastern Europeans use digital banking. more enthusiasm.
In CEE, mobile banking application development is even more advanced in terms of innovation, functionality, and consumer adoption, he said. Rychliski. ‘The reasons are doubtful, but one of the most important factors is certainly the fact that banking activity in Central-Eastern Europe, after the political and economic changes of the early 1990s, started almost from scratch from a technological point of view. . Resources.
In recent years, a healthy environment has emerged for fintech and neobank firms, with a strong digital infrastructure and talent in the region. According to Raiffeisen Bank International’s 2019 CEE Fintech Atlas, that year was another highlight in many CEE markets. It identifies Belarus, Poland, the Czech Republic, Slovakia, and Slovenia as the best digital banking markets.
The expansion of Fintech is supported by initiatives such as open banking, which has increased competition in the market by offering traditional banks and new products and services to retail clients.
Eastern Europeans accept innovative digital banking services offered by established traditional banks, especially since these institutions already offer many innovative solutions, said Rychliński. However, this does not prevent consumers from taking advantage of what many fintechs in our region offer in terms of payments and personal financing.
In addition to being a key player in the CEE market, Guegan says fintechs have played a key role in transforming the banking sector in the region. Banks have different strengths than fintech startups: capital, customers, security, and trust, he explains. [Businesses of the future] use fintech firms as inspiration to transform and improve customer offering and services through digital platforms and analytics.
Beyond the pandemic
It is difficult to underestimate the long-term impact of the pandemic on digital banking adoption. For many banks, it was an opportunity to improve their existing offerings and expand the range of digitally available products and services to increase sales.
In the first quarter of 2020, we made more progress with our digital transformation than in the past three years, said Guegan. It was all possible thanks to our previous work and our investments in digital transformation. We are now leveraging our previous investments in mobile banking, internet banking, contact centers, and paperless offices.
For example, in recent years UniCredit has increased digital penetration by offering a shared customer experience on its mobile banking channel in seven CEE countries. This has led to a 55% increase in active mobile users and a more than 200% increase in mobile transactions, he says.
It has also led to the development of new services, including more than 200 Covid-19 initiatives in Central and Eastern European markets, Guegan added, allowing customers to provide early banking services during closed periods. For example, within a few months we have developed a complete end-to-end online account opening in Hungary and new digital and automated standard query processes in Slovenia, he says.
While digital banking will likely remain a feature of life after the pandemic, Rychliński argues that it doesn’t mean banks can afford to be complacent. They will need to prioritize investments in innovation, personalize the customer experience and focus on data security and privacy, he notes.
The prospects for growth and use of digital banking at ESS in the coming years are promising, said Rychliński. Opening up consumers to digital solutions is accompanied by greater availability and progress, including the pandemic.