YEREVAN, November 6. /AVAILABLE/. Digital technologies continue to develop rapidly, penetrating almost all areas of our lives, including banking. In the face of globalization and tough competition, the world's largest banks have started to use a new business model - the digital bank model, which is based on the possibility of performing any customer operation through remote means, such as the Internet and mobile devices.
Armenian banks are not lagging behind and strive to follow new trends in order to be more competitive in the market. In particular, the panel discussion "Is the spread of remote banking services justified in Armenia" organized by Ameriabank was held recently in Yerevan, which was attended by representatives of Ameriabank, HSBC Bank Armenia, Beeline and Ucom telecommunications companies, the Central Bank of Armenia, as well as information security experts and representatives of IT companies. The participants discussed the modern trends of banking services, as well as the prospects of using remote services in Armenia.
Digital banking is the strategy of the future
The use of digital technologies for the global banking business is not new, but these technologies are still gaining momentum for Armenian banks. It should be noted that only this year, Armenian banks began to actively introduce various means of remote service, in particular, online-banking and mobile-banking.
According to the study carried out by "Ameria" consulting company, only three of the 21 banks operating in Armenia do not have an online banking service intended for individuals. At the same time, the survey organized by the company in 11 cities of the country showed that the share of online banking users among bank clients in 2014 was 2 percent compared to 1.3 percent recorded in 2013.
However, Armenian banks have a great field to develop against the background of global trends. Thus, the global indicator of the use of online-banking services is 28-7%, and the users of North America (48%) and Europe (37.8%) are more active. And the most active users of online banking live in Iceland (91%).
Despite the low rates of use of remote means of service by the population of Armenia, market experts believe that digital banking is the strategy of the future banking business in Armenia. According to Arman Barseghyan, director of Ameriabank's retail operations, the large-scale use of remote services in Armenia has no alternative, but it will take time.
According to him, the success of wide distribution of remote services in Armenia depends first of all on the general well-being of the population. Thus, according to Barseghyan, such services are unavailable for a certain segment of the population, mainly, this applies to marzes, where the level of use of the Internet, smartphones and simply banking services is extremely low.
At the same time, Mihran Muradyan, head of the retail trade department of HSBC Bank Armenia, also believes that the future of banking activity in Armenia is connected with the use of digital technologies. According to him, in some countries, for example in Singapore, bank branches do not use human resources at all, and the work is carried out entirely in a digital format.
According to experts, the development of technologies in the world has radically changed not only business, but also people, their lifestyle, habits and way of thinking. According to Vakhtang Abrahamyan, a member of the Central Bank of Armenia Council, digital technologies in the banking sector of Armenia are developing at the expense of the young generation, which cannot imagine its life without smartphones and gadgets.
"The banking customer of the 21st century, who quickly adopts new technologies, will demand new technologies, and banks will have to follow rapidly changing trends," he believes.
As Abrahamyan believes, these trends confirm the fact that 40 percent of bank customers in Great Britain have never visited a bank. "All this shows the trend we are following," he added.
There is no progress without risk
Naturally, the development of new technologies creates new risks, in particular, the threat of fraud and hacker attacks. The Central Bank of RA, as a regulator, pays great attention to the security issues of the banking system and products, including online banking. At the same time, all Armenian banks have internal rules, according to which banks are obliged to conduct "penetration testing" regularly (once every month or quarter). There are also international safety certificates.
However, at the same time, there are risks, in any case. According to the analysis of information security expert Samvel Martirosyan, most of the Armenian banks have a quality system to protect against hacker attacks, but there are also more vulnerable banks. According to him, 4-5 banks are seriously vulnerable, as a result of which online-banking customers are in danger.
At the same time, he stated that, as of today, no serious hacker attacks have been registered in domestic banks.
"We are still not interesting for hackers, because the spread of online banking in Armenia is limited, and the online market of the republic is still small. However, the market will, of course, grow, and attacks may naturally begin," the expert says. Martirosyan also believes that the possible vulnerability of banks to hacker attacks is only a theoretical threat, but in any case, banks should take this into account.
Non-bank actors are partners of banks
The development of digital technologies is ahead of time today, and the banking business does not have time to transform its activities in accordance with new realities and modern trends. That is why various non-banking institutions, in particular, payment systems, telecommunications companies, have started to provide financial services along with banks.
According to many bankers, the new digital companies are creating significant competition in the main types of banking services, depriving banks of some profits. One such example is Google, which launched a plastic debit card. It's used by millions of consumers on Google Wallet. And PayPal ranks first in many countries in the field of providing online payment services. Apple Pay and other mobile banking and wallet services are worth mentioning.
According to Maxim Khalmatov, director of information technologies of "ArmenTel" CJSC, the banking sector and telecommunication companies in Armenia will not compete in the market of financial solutions, but will become partners. The specialist believes that this will happen mainly due to the regulatory features of the existing market in Armenia, in particular, the activities of banking organizations and telecommunications companies, as well as the limited nature of the market.
In such conditions, the banking business will be preserved in its pure form for the limited segment and especially for the corporate and premium class, and the retail sector will be more dominated by combined products and services, where the bank and the non-bank actor will have respective roles in the customer service sector.