Banks: On the road to the digital age: what changes lie ahead for merchants

By | April 30, 2023

With its digital transformation programs at an advanced level, the national banking system is already in the next day allowing merchants to carry out almost all their transactions, if they wish, digitally without their presence in the store.

In this way, the banks also face the competition that has arisen in recent years from the so-called third parties that have entered dynamically both internationally and in our country in sectors of services and individual payments that until recently were almost exclusively a banking issue. system. But at what specific stage are banks currently in the digitization arena, and why will they resist the entry of new players? What can customers expect? What services are experiencing growth?

As stated by Alpha Bank’s Chief Digital Officer, Michalis Charbopoulos, from the Delphi Forum, it is a fact that we are seeing more and more applications for social networks, messaging, etc. to add services with the most basic value transfer, debit card issuance and bill payment. In essence, though, as you said, until today, we haven’t seen any such company offer a truly new service, a true innovation that banks haven’t offered for years, and in fact on top of actual bank accounts that are also covered by the deposit guarantee framework.

IRIS payments were mentioned, pointing out that a citizen can send money directly to another citizen or to a professional, knowing only their mobile number and of course with the security of deposits that does not exist in a simple digital wallet. This is a much higher added value service, since it covers the actual transfer of money between different banking institutions and not simply the transfer of value between users of the same organization.

– 100% digital services offered

Today, through banking applications, a customer has a much more complete service, since they can send money to all countries and banks in the world, pay the bill they want, issue debit or credit cards, digitize their cards and connect them to digital wallets. , obtain a personal loan, carry out transactions with investment products, obtain insurance coverage, etc.

One of the main challenges facing banks now, said Alpha Bank’s chief digital officer, Michalis Tsarbopoulos, is in the nature of designing in the digital environment solutions that offer something between art and science, so that clients, in a wide range of products and services, to be able to find and use them easily and quickly.

Focusing on Alpha Bank, he noted that it has designed and is implementing a comprehensive plan to further enrich digital services and enhance its customers’ digital experience for years to come. The key pillars of this plan are the digitization of 100% of day-to-day customer services, the ability to provide all simple banking and bancassurance products through fully digitized journeys, the enhancement of the provision of complex banking products and services. (eg, property management, housing loans) through the use of modern technology, such as e.g. teleconferences through video, exchange of digital documents and signatures with clients and, finally, the redesign and modernization of its basic digital applications, both on the web and on mobile devices.

– Start a banking relationship without presence in the store

On the other hand, Christina Theofilidis, General Manager of Retail Banking at National Bank, highlighted the impressive progress that has been made in the last decade in Europe, with the penetration rate of digital banking jumping to 60%, from 35% in 2011. Especially in Greece, transactions through digital networks increased significantly, limiting transactions in store networks, which currently handle only 3% of cash transactions.

Greece, along with Germany and Italy, is at a level of digital banking of just over 50%, a long way from other European countries such as France and Spain, which are close to 68%, and certainly from the Nordic countries, where digitization of banking has reached 85% public penetration. For National Bank’s digital maturity, Ms. Theofilidis cited a recent Deloitte global survey, in which National Bank is ranked in the top 20 proposals out of a total of approximately 300 banking institutions, including traditional banks and neobanks.

Today, Ms. Theofilidis said, every Greek can become a National Bank customer exclusively from their mobile phone, open their first account, obtain any type of card (debit, prepaid, credit), request and receive a personal loan in a few minutes, to invest in time deposits, mutual funds, and stocks, to insure yourself, your family, and your property.

– Tech giants and banks

Regarding the entry of technological giants, such as Apple, in the availability of banking products, Mrs. Theofilidis estimated that it is a trend that will intensify in the future, since these companies dominate the offer of services through mobile phones.

The challenge, however, is not whether they can offer a single product at a very good price. They can certainly do that, just like a new bank if it wanted to gain a clientele. We have to study and we are already looking very closely at the experience that big technology companies offer the customer. There we have a lot to learn as a banking system. And we must continue to be better, more human-centric and improving the experience of the customer who transacts with us digitally. This is how we respond to the Big Tech challenge, and this is how we also increase our digital penetration.

– Investments that exceeded one billion euros

To bring the national banking system into the new digital era, total investments, according to converging estimates that have been made public, exceeded one billion euros and were extended to its entire organizational structure. Specific transformation programs that were planned for at least three years are in most cases in an advanced state with the changes now visible to the common customer, the most typical example being the change in appearance of the physical branch network banking.

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