The COVID-19 pandemic may push banks to jump more intensively on the digitisation wave.
People no longer have to come to a bank in person when they want to open an account. They can do so from the comfort of their home, where they need only a mobile phone and their ID card. This is one of the tangible solutions the digitisation of banks and their products have brought to Slovakia.
The Slovak Spectator spoke with Peter Ivanka, expert in digital banking at the Slovak IT company Softec, about the latest trends in digital banking in Slovakia, smart solutions developed by Slovak banks and fintechs, as well as what the Payment Services Directive (PSD2) has brought.
The Slovak Spectator (TSS): How much will the COVID-19 pandemic affect digital banking?
Peter Ivanka (PI): Firstly, banks hit by the economic impacts of the pandemic will not have much time to work on their innovations as they will have to primarily focus on their clients, either private individuals or corporate ones. The second level involves the current scope of digitisation of bank products and work at banks in general. Banks that are already able to sell their products online, eliminating the need for the customer to come to the bank while employees are able to fully work from home, can benefit from the current situation.
TSS: How would you evaluate Slovakia in terms of digital banking, especially compared to other countries?
PI: We are not an absolute leader; I personally consider Estonia and the Scandinavian countries leaders, but we are not badly off either. There are specific areas such as contactless payments at POS [point-of-sale] terminals or the use of facial biometry in the sale of banking products, in which we are certainly among the leaders.
In Slovakia, people can already set up an account or take a loan without having to go to the bank. They can do so from the comfort of their homes, while they need only a mobile phone and their ID card. Banks are digitising other products, for example investment ones. Slovakia also has the so-called mobile-first bank, 365.bank and payment services like Google Pay or Apple Pay are already available here, too. Slovakia is preparing for instant payments, while several countries of western Europe as well as the Czech Republic have already implemented this financial solution.
TSS: What reasons do you see behind Slovakia’s position as a leader in cashless payments and the popularity of payments by mobile devices?
PI: The reason may be that Slovakia is a relatively small market, and international companies test some of their innovations here. This was the case of contactless payments, which were introduced here as one of the first European countries. The second reason may be that Slovaks, as various surveys show, like innovations, smart technological solutions and improvements. Plus, the banking sector in Slovakia is not very old as it was actually created only after the fall of the previous communist regime in 1989, and as a consequence the banks are young and dynamic.
TSS: What new opportunities does the Payment Services Directive (PSD2) offer for digital banking?
PI: Here I see two areas. One of them, which at the beginning attracted the greatest attention, is the principle of open banking. This directive enables the access of third-party payment service providers to information on clients’ accounts and initiates a payment from their accounts. All of this is happening with the consent of the client while such providers have to hold a license issued by the country’s central bank.
The second one is security of payments. This directive became valid at the beginning of 2018 while rules pertaining to security went into effect on September 14, 2019.