“Long-term success for banks will depend on their ability to improve efficiency. This will determine their position in the competition for customers over the next 3, 5, or 10 years,”- says József Nyíri, Co-CEO of Finshape.

József gave an interview at the Portfolio Financial IT conference in Budapest, Hungary, about the challenges of banking digitization, regional digital development trends, expected development directions, efficiency improvements, AI, and talent management.

What are the most important challenges in banking digitization developments in the CEE region? What projects are you working on, and what is in demand?

At the banks we work with in the CEE region and domestically, we see a consistent effort to accelerate their digital capabilities. Digital initiatives can focus on various areas depending on the situation (integration, customer development, process improvement), but most have recognized that long-term success hinges on improving efficiency. This will determine their position in the competition for customers over the next 3, 5, or 10 years.

In recent years, several banks in the region have been burned by trying to develop everything in-house or committing to seemingly promising platforms for years that promised solutions to every challenge.

We see that most banks have realized that the truth lies between these extremes; a balance of having a vision and a flexible framework that allows for the integration of ready-made solutions is essential. Two principles are crucial for success: reducing technological complexity and acquiring colleagues or partners with relevant experience.


Many banking products are already available through digital channels beyond everyday banking: personal loans, insurance, and investment products. Do you think it’s worthwhile to digitalize the still non-digital products? How can we improve the digital banking UX on the front-ends?

Different banks face different challenges and, thus, different projects. Some are focused on consolidating their interfaces, while others are enhancing customer experience with innovations like AI or hyper-personalization. The expectations of retail customers have forced almost every player to digitalize basic daily banking and the most important product application functions.

We see two important trends. Firstly, high-level service for the business segment is becoming more common. Secondly, there is an increasing focus on extending customer focus to colleagues. This is because it’s often harder to find experienced colleagues than new customers. Additionally, a user-friendly interface for customer service staff and the associated stress-free experience positively impacts the customer experience.

What about internal employee service? What developments are underway, and where can improvements be made?

Due to an ageing population and increasing competition for skilled labour, every bank will eventually need to invest in improving the employee experience. Given the vast number of internal processes at each bank, advanced players focus on improving their renewal capabilities rather than renewing individual processes. They aim to quickly and flexibly define customer service forms and processes or break down challenges related to remote customer service through developments like customer identification or screen sharing.

We expect AI technology to first ease the lives of customer service agents. For example, it’s much easier to fill out a long form with voice commands than to type in each piece of data individually.

How much cost-saving potential is there in banking digitization? How can digital tools make banking operations more efficient?

When considering cost reduction, it’s essential to consider which costs to reduce (capex, opex, vs. perex) and whether the direct cost reduction impacts the customer experience. Digital solutions can be effective in replacing personnel costs if both customers and employees accept and enjoy the new solution. This is true for most algorithmizable processes; nobody likes to wait for service or deal with an incompetent agent.

A major breakthrough will be the appearance of AI assistants. The technology is already available to map customer intentions, provide answers, and fulfil customer requests. Human assistants will still be needed, but more as advisors in complex and sensitive matters like loans or investments. Banking won’t be the first sector where virtual assistants take over service; their appearance in other industries will quickly force banks to adapt.

Those who have already experimented with the technology and prepared the necessary customer data in an organized and up-to-date manner will have an advantage.

What do you expect for the future of branch networks over the next 10 years?

I don’t want to make predictions; just think of where ChatGPT was two years ago. However, I’m sure that banking service tools will converge across all channels, whether digital, phone, or branch. In ten years, nearly all algorithmizable banking needs will likely be met remotely or through a branch terminal with a virtual customer assistant. Human agents will still be there for sensitive processes, either remotely or in the branch. The transformation won’t happen overnight, as many still value the sense of physical accessibility.

There’s a lot of hype around generative AI technologies. What role will this play in digital banking in the short and long term?

AI is not a short-lived hype. Naturally, interest will wane as the novelty wears off, but the revolutionary advances of generative AI will remain and become increasingly present in our daily lives. There’s no need to fear them, as they behave as designed by their creators, just like any software or application.

This is important to clarify because there were skeptics within our own company until we organized an internal AI hackathon (24-hour development challenge) in May. Since then, we have no skeptics.

In 24 hours, our colleagues developed banking solutions capable of understanding customer needs, transforming live speech into commands, summarizing and clarifying texts, converting text commands into developer code, and more, all with AI.

All these functions are necessary within banking operations. Fortunately, we are currently working with several banks to test and validate our latest prototypes.

For highly regulated, slow-moving, conservative banks, is attracting talented, knowledgeable IT key personnel still a challenge? How can this be addressed?

The biggest challenge is attracting talent, not repelling it. This is often a communication task, as those who have adapted to workplace conditions and atmospheres comparable to competitors outside the sector need only show this outwardly. Naturally, it takes longer for larger and more conservative organizations to adapt to modern employee demands, but we see that everyone has recognized this challenge and is moving forward in their own best interest, as the market is heading in this direction.

However, many have also realized that not all knowledge can be cultivated and developed in-house; some tasks require external resources. It helps to have a reliable partner everyone can count on for this.


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