You can also listen to the interview in the audio version.
The coronavirus pandemic started an avalanche of electronicization, in which the entire Czech Republic was involved. Companies started to modernize their websites, and consumers learned to shop online. Banking has not escaped the digital transformation either.
The consequences brought by the fact that Czechs in most cases deal with their finances via their phones forced banks to make fundamental changes. They set about closing brick-and-mortar branches and laying off employees.
Specifically, Česká spořitelna reported in September about the planned layoffs of hundreds of managers and service workers.
Even more digital
However, according to Česká spořitelna board member Daniela Pešková, the process of electronicization is far from over.
“I don’t think that digitization in the area of the banking market is already at its peak. I think there will come a time when there really will be almost no client who does not use mobile banking,” says Daniela Pešková in the program Agenda SZ Byznys.
According to current figures, the bank already records approximately 60 million interactions per month in mobile banking. On the contrary, approximately 250,000 clients visit brick-and-mortar branches per month.
Nevertheless, there remain requirements that clients do not yet dare to meet with just the help of the phone.
“The composition of visits is changing a lot. Previously, clients dealt with bank account service at branches, came for cash or to set up standing orders. Today, in most cases, they go to counseling meetings, which are planned and primarily deal with the client’s financial health,” says a member of the board of directors of Česká spořitelna for SZ Byznys.
Czech Savings Bank
- The largest bank in the Czech Republic by number of clients. In September 2023, it had 4.5 million.
- The bank operates 369 branches in the Czech Republic.
- The owner of the savings bank is the Austrian financial group Erste Group Bank. Erste acquired a majority stake in the savings bank 20 years ago, and is now the sole shareholder of the savings bank.
- Apart from Česká spořitelna, the largest banks in the Czech Republic also include ČSOB, Komerční banka, UniCredit Bank, Raiffeisen Bank, Moneta and others.
As a rule, these are situations that clients deal with only a few times in their lifetime. Typically for a mortgage loan, the start of investing or, for example, life insurance.
“Clients will not solve these requirements over the phone for a very long time. For now, they still need advice and reassurance that they are doing it right.”
Fewer branches in the Czech Republic
Banks respond to changes in client needs. A number of them started to close part of their brick-and-mortar branches after the internet banking boom. In the case of Česká spořitelna, there were approximately 270 branches over the past 12 years, but their complete abolition will not happen.
“The brick-and-mortar branches of banks will still be here in ten years, and there won’t be dozens of them, but hundreds. The combination of the physical and digital world will ultimately be the winning one,” says Pešková.
With the modernization of its network, the savings bank also started selling some buildings where it operated individual branches more than ten years ago.
“The biggest wave of sales is probably behind us. We have chosen roughly two dozen buildings that are flagships for us and are deeply connected to the bank’s history, and we plan to keep them. We are gradually selling the others in accordance with the plan, and mostly we only rent the premises long-term,” said the member of the board of Česká spořitelna.
In recent years, the bank has sold two or three buildings a year. Sales should continue at the same pace, she added in an interview for SZ Byznys.
According to Pešková, however, the internal setting of brick-and-mortar banks will gradually begin to change.
“I expect that the opening hours of a number of branches could change. The highly visited branches of Česká spořitelna are in shopping centers that also operate on Saturdays and Sundays and copy its opening hours. The use of remote consultations, i.e. video counseling, will also change. Today, roughly five percent of the total consultancy is involved, but interest will certainly grow in the future,” he describes.
More people in IT
As a result of the electronicization of banking, Česká spořitelna is also changing from the perspective of the employees. It is going to strengthen in the field of IT, on the contrary, the number of service and managerial positions will decrease. At the same time, the entire IT team of Česká spořitelna already makes up roughly a quarter of all employees.
“Banks are now technology companies. This is something that was not the case 10 years ago. Due to the enormous demands on security, volumes and numbers of transactions, there is an ever-increasing need for IT specialists. At the expense of this, we will be laying off employees from managerial, support and service positions,” adds Daniela Pešková.
A quarter of an hour about business first hand. Interviews with top Czech business leaders, company founders, experts.
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You can watch the entire interview in the introductory video.