Our Chairman at Innovation on Banking 4.0 Conference, Davor, Gasparac, Head of Group Corporates Division at Erste Group IT International GmbH is sharing his views about the banking industry, the upcoming PSD2 implementation and suggesting few innovative solutions. Read more about.
You are already with Innovations on Banking Conference from its begging and this year you are coming as a Chairman for the Conference. How is the experience so far? What is this conference offering to the audience and more precisely to European Bank Industry?
Davor: The last two conferences gathered very interesting mix of banking experts from different areas of business from banks with different business models and strategies, as well as software providers who offer solutions for variety of use cases. This helped all participants to broaden their views, consider solutions and business models they probably didn’t think of and come back to their companies with new ideas (which, they will hopefully work on). Considering the (growing) number and variety of participants, If each of them brings back home and implements at least one idea from this conference – European banking industry will evolve rapidly.
Representing the Erste Group IT (an IT daughter company of Erste Group Bank), which are currently running Innovative solutions that you are implementing and will shortly touch your clients?
Davor: My area of responsibility is IT support for Corporates business. In this area, we started several initiatives in order to speed up digitalization, and deliver state of the art solutions for corporate clients in order to help them manage their finances – no matter which bank(s) they are having their account(s) in. When Erste Group was founded (in 1819), our founders made a bold prediction: “In every district where a Savings Bank is opening its doors, there will be far fewer poor people.”. This year we are celebrating 200th anniversary, and our purpose remained the same: bringing prosperity to our region (Central and Eastern Europe) and its people. In corporate business this means helping entrepreneurs funding and properly financing their business at any stage of their life cycle, managing their finances and thus helping them in making prosperity for themselves and communities they are operating in. Translated into IT area where I’m responsible for, this means building solutions which helps our customers manage their finances in the most effective and efficient way, but it also means helping employees of the Bank, serving these clients in the best way possible. For our Bank’s clients, we are currently focused on simplifying cash management solutions.
Ceska Sporitelna, which is one of the biggest banks in the Erste Group, will hold a presentation of Open banking Business model. How is the Open banking service developing in entire groupation, Which technology you are using and mostly Which are the benefits for you and clients?
Davor: „Open banking“ is, in the essence, enabling clients to choose freely, transparently and simply which product(s) and/or service(s) from which bank(s) they want to use, and to combine these features easily into portfolio which brings the most benefits for them. Open Banking means a client can choose the best partner for each aspect of their financial life cycle. From bank side, this means we need to be ready we will not “own” a client anymore, but clients will cherry-pick services from different providers, which is something banks are not used to do – while in some other industries, like IT in general, it’s a standard since decades. This also means that banks will have to cooperate with each other more and more, and carefully decide where and how will they compete – and where it makes more sense to collaborate instead of compete. Open banking will increase competition which inevitably lower prices, and this decreases margins. This means that open banking will bring plenty of benefits for clients, but banks will have to rethink their business model and product/service strategies. Which technology is behind it is irrelevant. The most important is agreeing standards, so different technologies will be able to work together.
PSD2 is just around the corner. Share with us some of the practical experience of the implementation of the second European Payment directive.
Davor: PSD2 is already here and implementation was bumpier than expected. The concept and ideas behind PSD2 are rather simple, however, in implementation we faced many challenges which made clear how much Banks, IT industry and regulators need to learn about each other. I think that the biggest lesson learned for all was that each side underestimated the complexity of IT systems, banking products and compliance.
Is Erste Group currently running open-call for welcoming new technologies carried by the fintech community?
Davor: Erste Group is always open for cooperation. When it comes to new technologies, we regularly run PoC’s and consider implementing the ones that bring benefits for our daily business or our clients. However, I wouldn’t agree that fintech’s are bringing new technologies. Fintech’s have the advantage in their size and (lack of) legacy systems they need to deal with. For that reason, they are fast in developing new solutions (irrelevant which technology is behind), however these solutions still need to be integrated into bank’s environments in order to make them work. This is where fintech’s, in general, have less experience and this is where cooperation is needed.
Innovations on Banking 4.0 is inviting the prospective Financial Companies, Banks, FinTech/Startups, Consultancy, Solution Providers and Vendor Companies who bring value and rise the level of technological Innovations in Industry. Join us at this High-Exclusive gathering this September in Prague, Reserve your spot on time!