Is open banking (also) coming to Croatia, is the question that the conference of the same name held at the Croatian Chamber of Commerce on Monday, March 19, tried to answer. In short, the answer is yes, but what does that mean?
The PSD2 Directive (Second Payment Services Directive) is a regulation of the European Union that requires banks to open their customer databases to licensed financial service providers, so-called Fintech companies. The reason is the insufficient competition in the financial services market. The consumer, in this case, the bank client, will have the authority over whom they will share their data with. It is up to the banks to ensure a smooth transition for other financial service providers, including Fintech companies and telecoms.
Zdenko Adravić, director of the Croatian Banking Association, stated that market liberalization will be a threat for some (banks), an opportunity for others (Fintech companies), and a challenge for the third. The question of how our domestic companies will respond to this was raised by Zvonimir Savić, director of the Sector for Financial Institutions, Business Information, and Economic Analysis at the Croatian Chamber of Commerce, emphasizing the possibility that Polish and Irish payment companies could enter the Croatian market before local competition gets on its feet.
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– Is open banking coming to Croatia? Yes, because the law is the law, replied Gijs Boudewijn, chairman of the Payment Systems Committee of the European Banking Federation, adding that it cannot be expected that all banks will adopt an aggressive stance towards Fintech companies, which means that if significant changes occur, there will be some casualties from the banking sector.
The Deputy Governor of the Croatian National Bank, Neven Barbaroša, emphasized that the directive regulates payment services, aiming to encourage innovation and competitiveness among all players in this field, including banks and Fintech companies.
– The initiative needs to be accelerated because we do not want to fall too far behind EU trends. We see that in Poland, Denmark, and the United Kingdom, there are already companies successfully providing financial services, he added. However, he believes that the final outcome largely depends on the policies and banks and their openness to change.
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In the panel discussion that followed, the first speaker was Dijana Kladar, president of the Consumer Association.
– Surveys and research have shown that Croatian consumers do not pay attention to security, and I fear that the cost of transaction fees will play a larger role in consumers’ decisions for service providers. Consumers are afraid of card misuse in the digital world, but looking at the surveys, I think they will still switch to those offering cheaper services. Therefore, we need to present the advantages and disadvantages to consumers in simple language and do this together, through cooperation between consumer associations, banks, and other payment service providers, Kladar emphasized.
Speaking from the perspective of Fintech companies, Dejan Miklavčić from Monri Payments and Tomislav Sessa from Trilix joined the discussion. They emphasize that they currently do not see themselves as competition to banks; initially, they expect to provide their services in cooperation with banks, with which they have had excellent collaboration so far.
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Luka Tomašković, director of the Delivery Channel at Zagrebačka banka, generally agreed, stating that changes will certainly occur, but not in the short term. The executive director of the Payment Systems Sector of the Croatian National Bank, Ivan Biluš, said he expects banks to primarily apply the principle of waiting until the last moment to see how the situation will develop before deciding on potential changes.
This is also supported by the expectations of Zagrebačka banka, which does not believe that the implementation of PSD2 will manifest in either job creation or a reduction in the number of branches. Conversely, upcoming Fintech companies think that they will increase their number of employees due to an increase in workload and greater growth opportunities provided by the European directive. Tomislav Sessa from Trilix emphasized that they see themselves as competition to card companies, to which Luka Tomašković from Zagrebačka banka asserted that card companies will survive, just as cash remained after cards appeared.
The conference concluded with a presentation by Marco Folci from PwC Italy, who concluded that banks should view the European PSD2 directive as an opportunity because the concept of open banking offers new possibilities and sources of income compared to the traditional offering of banking services, which can ultimately result in more satisfied consumers due to increased innovation.
