Iulia Malioukis, Horváth & Partners: “There is still potential for banks’ investments in digital innovation”

“The results of a study conducted last year show that banks have invested heavily in digitization in 2020. Banks ‘digital competence has been measured, and all banks’ digital channels have been analysed. The study shows that Romania rises to international standards from the perspective of digitalization, and in the international top 10 there is also a Romanian bank, namely Banca Transilvania. The strengths from a digital point of view are online onboarding, loyalty programs and the visibility of the innovation strategy,” Iulia Malioukis, Senior Manager, Banking Expert, Horváth & Partners said during the Financial Forum 2021 organized by The Diplomat-Bucharest.

At the national level, it was observed that the online onboarding product reached a maximum level in 2020, being a priority for many banks in the context of the pandemic. About 60% of the analysed banks offer customers the opportunity to open an online account, compared to 25% in 2019.

We have noticed a substantial improvement in mobile digital banking applications. In 2019, about half of the banks offered such applications, and in 2020 all banks offered mobile applications for the customers.

We believe that there is still potential for banks’ investments in digital innovation, especially regarding tariff transparency and omnichannel communication.

From the discussions we had at the top management level, we found out that the banks had to de-prioritize investments in innovation. If we look back at the crises of 2008 and 2012, we can see that companies that have invested in innovation have grown by 20% more than other companies.

We believe that investment in innovation is necessary to overcome complicated periods. There is a lot of unused potential in Romania, but also in Europe for creating platforms and applications that are as personalized as possible and address the needs from a 360-degree perspective, not just purely banking.

There is a desire and a need for transparency on IT costs, on investments in digitalization. This transparency facilitates decisions to direct investments in projects that bring more value to customers and more revenue to banks.

The pandemic has completely changed customer behaviour and expectations, and this will have a medium and long-term impact on relations with banking institutions. We expect banks to continue to invest in digitization and the development of online financial services.

The Diplomat Bucharest organized Financial Forum event in online format, on April 21,2021. The conference joined leaders spearheading digital initiatives in their organizations to offer insights into their digital transformation journey’s in fintech & banking, as well in capital markets and insurance.

The fast evolution of digital in all industries mirrors in the behaviours and innovations brought by banks,  financial institutions to meet the clients’ needs to abstain from overspending, navigate risks, and usually deal with their finances better. FinTech services and products are more and more designed for particular functions inside the financial ecosystem and customization is key to win more clients and portfolios.