The Polish banking market is one of the most modern in the world when it comes to technology. Adam Marciniak, vice-president of the management board supervising the IT area, speaks to Briony Richter about the implementation of innovative solutions to bring new life to payments
Banks in Poland are accelerating their efforts in payments. As more consumers turn to digital channels, banks are focusing on transforming their infrastructure to facilitate digital technology.
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Just over 11 years ago, the first contactless cards took to the stage on the Polish market. This kicked off a trend that had a huge impact on the payments industry. For PKO Bank Polski, its IKO mobile app has been an integral part of its digital transformation.
Speaking to RBI, PKO’s Adam Marciniak says: “We are proud and happy that our app turned out to bring such satisfaction to our customers.
“We came up with the concept of IKO as early as 2013. When you look back at the Polish market, advanced financial apps were practically non-existent, while IKO provided our clients with the mobile banking services and very comfortable payments. At the same time, we never let user experience out of our sight and our clients appreciated it. That’s why IKO was a breakthrough.
“Then we could take IKO to the next level – our app served as a basis for BLIK, the Polish mobile payment standard that gave Poles the possibility to pay, withdraw and transfer their money via smartphone. At the beginning it was PKO Bank Polski and five other major Polish banks that decided to co-operate as a joint venture. Due to BLIK’s success, the service is available in 11 Polish banks right now.”
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By GlobalDataA phenomenon that is spreading not only across the Polish market but the global stage is the BLIK mobile payment system, which was created on the basis of the IKO application. IKO is gaining significant popularity for both Android and iOS users.
It also facilitates real-time peer-to-peer payments, while other popular features include transactional and value-added services such as currency exchange and travel insurance. Customers using the mobile banking app can assign a PIN to BLIK vouchers and use them for payments at retail outlets that accept BLIK, bringing both applications together to offer a personalised and convenient service.
The mobile banking app continues to gain new customers on a daily basis. Its quick responsiveness and modern platform is enjoyed by over 3 million customers, and has revolutionised the image of mobile banking in Poland.
“We have just reached 3 million active applications, which is the best result in the Polish market. We have grown rapidly since 2013, and have promoted the app both online and in our branches. Today we can boast that our customers make an online mobile payment every second, and that for the last five years they have made overall over 130 million mobile transfers and payments,” Marciniak notes.
BLIK has quickly become the most popular mobile payment system in the country, enabling millions of customers to make secure and convenient online payments, withdrawals cash deposits, and instant transfers to a mobile phone number without needing to know the recipient’s bank account number.
Consumer behaviour
Today, customers have a wide range of banking apps and services to choose from. Competition is fast and fierce, so it is critical for banks to offer engaging customer services coupled with innovative products that meet the needs of their growing customer base.
It is clear that, globally, consumers are rapidly shifting to digital payment methods. It is obvious why: they are convenient, fast and secure, as well as offering easy ways to access deals from the provider. And with digitisation in the financial industry growing significantly, banks are battling with old infrastructure and new competition to retain the top spots.
“It doesn’t come as a surprise that more and more clients turn mobile. The numbers are growing steadily, especially among people between the ages 18 and 26,” Marciniak highlights.
“This age group finds it less and less necessary to visit branches. Customers between the ages 25 and 34 prefer mobile to desktop. Those over 40 years old, who used to fear the mobile trend the most, have started to trust it; yet, they see the need to visit a branch from time to time.
“To sum up, there is a wide range of people who have tamed mobile banking and are happy to use it. And since the recent years have brought an important shift from the branches to the digital channel, we concentrate on delivering best-quality digital products. However, we keep in mind how important it is to maintain excellent branch service regarding more complicated products, such as mortgages.”
Although PKO Bank Polski now focuses firmly on its digital offering, it cross-sells digital products and services in its branches, so customers who prefer to head in for a conversation can learn more about how to use certain services online. PKO has, inevitably, cut its branch network in order to drive investment into its online developments; the reduction of the branch network is around 45% over eight years.
Asked whether the explosion of fintechs entering the market has disrupted its plans, Marciniak states that the bank has embraced the new entrants and formed strategic ventures for joint profitability and innovation.
“There are about 200 fintechs we are working within our own accelerator, Let’s Fintech with PKO Bank Polski,” he explains. “One of the most interesting fintechs in our accelerator is based on blockchain technology with direct impact on banks’ operations.
“Within our accelerator, we started cooperation with a British-Polish company specialising in regtech. As a result, we implemented a blockchain-based solution to confirm the authenticity and immutability of documents sent electronically by the bank. It was one of the biggest consumer-facing practical implementations of blockchain technology in the banking sector all over the world – a historical dispatch reached over 5 million customers.”
Looking ahead at the potential of blockchain technology, PKO Bank Polski established the Blockchain Competence Centre at the beginning of 2018. In this dynamic group, the team concentrates on blockchain technology research in the technological, business and regulatory areas, co-ordinating implementation works and searching for new areas for its practical application in banking.
The bank firmly believes that blockchain can help create extremely sophisticated use cases for the future that will not only drive innovation for PKO Bank Polski, but for the whole financial sector.
Keeping up with PSD2
In the Open Banking environment, banks can no longer think of themselves as just banks: customers now expect a sophisticated and tailored financial experience. Simply providing basic banking services is no longer enough.
It is a new world with completely different challenges, and to continue to keep pace, banks must create harmonious relationships between APIs, infrastructure and partnerships. That may be easier said than done, but Marciniak is confident that PKO Bank Polski is well equipped to sail through the new regulatory requirements while offering the best available services.
“The PSD2 is our obligation; each bank has to meet its requirements. We had to transform our architecture to be in compliance with the common standard that must be applied for all institutions in Poland.
“Each bank has a responsibility to provide tight security, and this is vital for the customer. PKO Bank Polski will always have the highest standards for customers. We are always working to innovate our services. We work with other institutions to improve services on the Polish market.”
Embracing all the opportunities that Open Banking has to offer will enable PKO Bank Polski to place itself at the forefront of this financial revolution. Looking ahead, the bank aims to set its mark across the world, expanding its reach and developing new banking services that match the expectations its customers demand.
Looking to the future, Marciniak states: “We will continue what we are doing now: delivering modern, innovative and trustworthy bank services. To excel at this, we have been changing our methodology of business development.
“We realise that quick reactions to constantly changing market trends and customer expectations are essential. This is why we decided to become a bank that uses open APIs. The PSD2 regulation obliges the banks to provide data and services through APIs. By collecting this, data we can customise and personalise our offer. We are also working on machine learning that will optimise services within the mobile app; we want to build our offer on that.”
