Economy
Banks on the web - Germany, Poland are well ahead of Hungary
The importance of direct banks has been increasing only moderately in Central and Eastern Europe. In effect, there is no such player in Hungary and according to reports, Raiffeisen Bank International will also sell its direct bank. Is it possible that direct banks are not the appropriate response by the banking sector to their challenges posed by digitalisation?
How would you assess the market of direct banks in Europe today? How important would you say they really are in Western Europe?
In Western Europe, most digitalisation was done by direct banks and newcomers, which managed to capture most of the new market. They play much more of an important role as they moved the market and changed customer perceptions. Another example is in Poland, where the new digital banks have become the leading players and have evolved into combination banks - still with an emphasis on digital, but backed up by a physical branch network.
The market share of external challengers from the fintech sector has been rising both in the USA and in the UK in lending, on the savings market and in transaction banking too. In which areas do you think these can pose a danger to CEE banks over the next few years?
The new wave of fintech companies are small, agile, and unencumbered by the legacy systems and structures which impede the traditional high street banks. This means that they can pivot their business model and react to changing customer needs much more quickly. But at the same time being small and light means that they lack the resources and existing customer base. A real game changer can come from combination of the fintech’s reinvented business model and the scale of established bank. Through acquisition or partnerships they can create a force that will move the market. I see another potential threat: large companies from other industries with this scale who could build on their existing customer bases and skills to move into certain areas of the banks’ business. To respond, banks will have to look beyond their traditional channels to be where customers are with relevant offerings.
How far did Sberbank progress at setting up a direct bank in Germany?
We only launched last year, but we have built a very successful savings bank. As a pure online play, we focused solely on online distribution channels and an easy-to-understand product range, which has won multiple awards from independent test institutions. And we’re planning to build on this growth by expanding our product range and improving the customer experience to push digital transformation even in the direct banking area and compete with the fast-growing fintech solutions.
For what reason did you choose Germany to set up a direct bank in?
Of course Germany is the largest economy in Europe, with the growth potential which that brings. But it’s also an interesting and developed direct banking market, with customers who are used to saving online and would respond to our positioning and proposition.
Germany is core to our strategy. Every day we are gaining more experience and understanding of the market, and together with the experience we have from our other European markets we are building the digital bank of the future.
András Hámori will also attend the CEE Financial Summit conference. You should register too!
