Vira: Mariusz and Evgeny, it’s a pleasure to have you on Navigate's Spotlight Series. Over the last few years, we have all witnessed a dramatic transformation in the payments sector, driven by consumer expectations, with an increasing shift to digital and a reduced reliance on cash. Do you still feel the impact and influence of this digital shift, and if so, how has this manifested?
Mariusz: PrivatBank is arguably the most digitally enabled bank in the country. Information technology has always been and remains our top priority, especially when it comes to protecting customer data, funds and access to their accounts. Therefore, both during the pandemic and since the beginning of the war, we haven’t needed to restructure internal procedures or create new customer service channels.
Our cash centers have continued to operate almost continuously, and still deliver cash to all available ATMs and branches. We have also identified and equipped about 150 "standby" branches that are able to provide services in the event of a power outage. As for tactical solutions to ensure customer security, our transition to the cloud and the implementation of cybersecurity measures have been essential.
Evgeny: During the pandemic, customers were forced to migrate to online stores and increasingly began preferring non-cash payment methods. Subsequently, however, even after quarantine requirements were eased and activity in-store resumed, shopping digitally remained popular. With respect to the onset of the war, due to the significant migration of customers and the closure of a significant number of businesses, there was, of course, a decline in activity, but overall the proportion of online purchases continued to be high.
Vira: The digital transformation has, of course, driven a boom in eCommerce, as consumers have sought to access the global marketplace. In the CIS countries, and in Ukraine more specifically, what are the consumer trends and opportunities you’re witnessing regarding e-commerce?
Evgeny: We are seeing higher penetration of e-commerce with many merchants who have not used these tools before turning to them now. In general, if we look at the industries that have been growing most actively over the past year, we can highlight public transit, cinemas, cosmetics stores, advertising services, insurance, supermarkets, food outlets, home appliances and clothing stores.
Mariusz: Technology drives the development of financial markets and competition is increasing, whether from fintechs or non-financial players, as well as higher standards from customers with rising user experience expectations. We are also transforming our existing products and services to take advantage of these opportunities by providing our customers with more comprehensive solutions beyond payments.
For instance, thanks to our voice biometrics service, a client's voice can be used for a more secure and simple service over the phone, without additional security questions. Elsewhere, we have been able to accelerate the introduction of technology to call the bank through the Privat24 mobile application, both simplifying and expediting the consumer payment experience.
Vira: I’m sure you agree that there are no opportunities without risk – and eCommerce isn’t an exception. In your opinion, what are the main challenges being enhanced by activity in this space, and what is being done to address them?
Mariusz: Above all else, everyone in our team is focused on ensuring operational stability. Our employees do more than we could ever expect, at all levels, and demonstrate great agility and dedication in their roles. This is why we are able to adapt to new conditions that arise practically daily. In fact, PrivatBank made the first transaction under the DAF 3DS in Ukraine enabled by Visa. By partnering with Visa in this way, we continue to pursue the latest technologies to make digital commerce safer and more convenient for clients.
Vira: PrivatBank recently switched to Visa’s Cloud Connect platform. Why was this switch made and how did it bolster security?
Mariusz: The transfer of services to the cloud was as much an extension of the digital sophistication of the bank as it was an issue of security. It allowed us to provide continuous access for customers to essential financial services. Safe access, at any time, was our objective for all customers across the country and it was made possible with Cloud Connect.
Vira: We understand that PrivatBank is the leading bank in Ukraine working with SMEs which is testament to the bank’s continued focus on driving innovation. In 2021, Visa and PrivatBank announced the launch of the “Terminal” solution, based on Tap to Phone. How has it been received by your SME clients?
Evgeny: The app has been very well received by customers, especially small businesses, for which it was primarily developed. The simple sign-up and transparent pricing model allowed us to attract 5,000 customers in the first two months, and today more than 30,000 have tried the solution.
The blackout in the winter of 2022, oddly enough, also played a big role in popularizing the program. At the time, many entrepreneurs installed the app as an alternative to an "iron" point of sale, but even afterwards, a significant number remained active users, thanks to the positive user experience.
Vira: In your opinion, how do acceptance tools such as Tap to Phone empower SMEs in Ukraine? What benefits do they offer SMEs as they seek to capture customers’ demand?
Evgeny: First, and most importantly, it is mobility (payments can be accepted anywhere and at any time, without being tied to a store). Secondly, it is affordability. Most phones that have been produced over the past five years already have near-field communication (NFC) functionality. You don’t need to buy any additional equipment, and your phone is always at hand. Thirdly, it is the ease of connection and use of the service (registration itself takes five minutes, after which you can immediately accept payments for goods and services).
Vira: One final question for you, could you tell us what trends you see on the horizon in the payments landscape and how that might translate into new areas of focus for PrivatBank?
Evgeny: Regardless of the events that are currently taking place in our country, we are seeing encouraging activity in the payments market. We expect even greater integration of web-based technologies on the ground, and the emergence of even more interesting collaborations between banks, fintechs and other market players.
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