Page 44 - RBI FIntech Atlas 2018

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Digital leaders &
catch-up candidates in CEE
In order to assess the digital maturity of CEE banking markets we applied several indicators such as the
use of the internet for settling invoices, shopping or receiving digital payments. The result showed that more than 50% of the population is “digitally penetrated”
in 7 of 15 markets: the Czech Republic, Slovakia, Poland, Slovenia, Croatia, Russia and Belarus. In these countries, digital penetration is close to or above the levels in global emerging markets (e.g. China, Turkey) but 30 percentage points (pp) lower than in leading digital markets in Western Europe. The above list shows that digital leaders are clustered in Central (CE) and Eastern Europe (EE), while Southeastern Europe (SEE), with a penetration level of 34%, offers the greatest untapped digital banking potential. Furthermore, the level of digital penetration in the CEE Region remains 25 pp below that of conventional banking (around 70%). The gap is larger in the SEE Region whereas
in Western Europe, where digital/conventional penetration levels are higher, it is still 15 to 20 pp. Even in leading digital markets (e.g. Estonia, China, USA) there is a visible gap between these indicators (around 10 pp) and there is also, interestingly, a very small penetration gap in Russia. Going forward,
we assume that rates of conventional and digital penetration in the CEE Region will rise, particularly
in the digital space. As incomes grow, penetration levels of conventional banking should follow and this is usually the entry point to digital services.
Converting penetration rates into users, 200 million people in the CEE Region are classic bank clients and 150 million are digital customers. Russia accounts for the lion’s share of these (over 50%) with around 78 million digital customers, while the country accounts for 46% of the region’s conventional banking customers. The Russian market is also characterised by a high af nity of young people to digital solutions, which is a feature of attractive digital markets (e.g. Estonia, China, USA). Russia also offers the largest pro t
pool and best short-term digital opportunities in the CEE Region. However, this mature market is already penetrated by established players (with Moscow being one of the leading ntech places globally). Six other countries – the Czech Republic, Hungary, Poland, Romania, Ukraine and Belarus – also offer at least
5 million digital users. In terms of digital maturity, Ukraine and Belarus can be regarded as “hidden champions”. Turning away from the trends in larger CEE markets, it is also interesting to look for less obvious digital champions. In some ways, Croatia can be regarded as a rather mature digital market while other SEE economies (Albania, Kosovo, Bosnia and Herzegovina as well as Serbia) are characterised by the high af nity of young people to digital services – which is a powerful indicator of future potential.