Banks can learn from the Polish Banking Sector
Banking, Digitalisation, german market, Poland , Article , Digital Banking, Transformation
By Filip Mazurek, Senior Consultant

Poland is regarded a laboratory of the banking of the future as many European banks test and try new technologies and Polish companies follow. Polish banks are very innovative and modern institutions, offering their clients many new gadgets, efficient processes, up-to-date technologies and all the products you can think of.

There are three factors that contributed to the acceleration of digitalisation. The appearance of fintechs, the EU regulation that introduced the concept of open banking (PSD 2) and the challenges caused by the pandemic. The culmination of the accelerated digital transformation in the financial market will be the adoption of regulations, based on which also leasing services will be able to reach for an electronic signature and eliminate paper from circulation. COVID-19 is changing the shopping habits of Poles – as they increasingly switch to online purchases. Sales through online channels are expected to grow dynamically. The already digitally advanced banks are currently simplifying their offerings even more and they explore new sales channels, such as courier companies.

Banks pay a lot of attention to digital gateways

Polish banks pay a lot of attention to their digital gateways. Onboarding of new clients is possible fully remotely. Banks prepare their own processes via online and more and more often mobile banking or implement third party solutions. Face ID recognition ideas developed by fintechs, such as Revolut, have been successfully incorporated into the banking systems. It works not only with individual clients. There are more and more options for the business and corporate segment as well, supported by a growing number of chatbots. Almost all major banks in Poland use chatbots that help clients and ease the work of employees in areas such as deposits and investments, loan processing or general Q&A. These solutions are becoming more and more sophisticated. Moje ING mobile for example contains a function that allows navigation via the voice driven Google Assistant. The update of the app is available in Google Play.

Remote onboarding has become crucial during the pandemic lockdown and Polish banks were well prepared for that. The full onboarding process takes about 15 minutes. It consists of two steps . The first is the verification of personal data, ID photos and information stored in central bank databases. The system assesses whether the entered data is correct and, based on thata decides whether the app user can become a customer. After a successful verification, the contract is finalised using an electronic signature of documents. This step ensures that the person who has successfully gone through the remote account creation process can access the bank’s services or products right away.

Once the onboarding is completed there are almost no operations that make it necessary to come to a branch office. Opening a savings account, ordering cards, making deposits, applying for loans, leasing, or factoring, making investments, buying insurance and many more products and services are digitally available. There are two exceptions. The mortgage process requires a final signature of the loan, but the application process is almost fully remote. The second exception is leasing where due to legal requirements the process is still offline. But companies work on solutions to provide electronic signature here as well.

Success follows with digitalisation

The example of Alior bank demonstrates that success follows digitalisation. Alior bank was set up during the financial crisis in 2008 by one of the most renowned Polish banking manager and has grown to become one of the ten biggest banks on the market.

The manager has left Alior to build a new digital banking platform, Vodeno, which is available as a white label solution for digital banking. The whole mobile onboarding process is very fast and customer friendly. The platform is based on a cloud solution and supports virtually all banking operations and processes. The system is used by the former Belgian branch of Banca Monte Paschi di Siena that has been renamed and transformed into Aion Bank, a fully mobile bank that operates in the European Union. It charges clients not by transactions but with a fixed monthly fee for all services.

Cooperative banks are also in the midst of digital revolution

Compared to Germany, with its very powerful regional banks, the regional banks in Poland have lost popularity as they are lagging behind in digitalisation. But the digital trend is also starting there. Due to their small number of branches, online and mobile channels are an ideal option for smaller, mostly cooperative banks to grow. A small regional bank in Torun renamed itself to Nicolaus Bank to be more recognisable and to become digital. Other regional banks are following suit. The cooperation of Polish regional banks (SGB) has developed a highly rated and innovative digital platform.

It enables the integration of many different IT systems used by the SGB Cooperative Banks. It removes the main barriers to technological development in cooperative banking – multiplicity of systems and the lack of system compatibility. An API was created with banks and customers in mind. In the future, it will make it easier to take loans online, speed up the flow of information and documents, shorten procedures, simplify and tighten data verification, and also provide the possibility of setting up a bank account both from the level of the mobile application and in WWW channels.

Pandemic speeds up digital transformation

COVID made all these changes happen faster. Digitalisation was part of restructuring. The process accelerated during the lockdown. Financial institutions were forced to digitalise channels in order to keep in touch with their clients and to secure the staff working in the branch offices. Many banks demonstrate how digitalisation and end-to-end remote processes can be beneficial both for banks and clients. It helps to establish a more customer-oriented approach and positively influences banking results. This will also be important in Germany, where the ROE indicator is one of the lowest in Europe.