Ahead of Money Motion, the largest fintech event in the CEE region, we spoke with Aleksandar Bogdanović, President of the Executive Committee at Yettel Bank, to explore Serbia’s evolving fintech ecosystem.
The financial ecosystem of Serbia is more stable than ever. In 2024, inflation was brought back within the target range of 3±1.5%, our national currency strengthened nominally against the euro by 0.2%, and there was significant growth in the gross domestic product.
I would describe the banking sector as very dynamic in the last decade, as it is in the process of transformation. Namely, up until 10 years ago, when Yettel Bank entered the market as the first digital bank, the sector was entirely traditional. Customers were visiting branches, dealing with paper administration and strict rules, and, in line with the mentality in Serbia, they had greater trust in this type of banking.
The emergence of fintech solutions positively disrupted customers and their habits, developing an entirely new wave of customers who appreciate faster, more efficient, and flexible banking. I believe that competition between traditional and modern banking shouldn't exist. We are an example of a neobank that combines transparent operations within the regulatory framework with innovative solutions that provide the ability to use banking services anytime and anywhere. Thanks to the National Bank of Serbia's strong commitment to digitalisation and innovation, significant progress has been made in this field, and I believe the time for changes in our market is just beginning.
The banking system in Serbia is highly developed and accessible to the vast majority of citizens. Our mission is to go beyond that ‘vast majority’ and reach absolutely every customer, regardless of where they live or whether they have a branch nearby. Thanks to the development of technology, our mission is achievable, as all customers need is a mobile phone. This value is becoming more recognised in our society, which is confirmed by data showing that during the third quarter of 2024, more than 4.45 million customers had signed up for mobile banking services, which is 15.1% more than in the same quarter of the previous year.
When I talk about banking accessibility, I must also address monthly costs. High fees and various commissions often discourage customers in Serbia from regularly using banking services. To show that banking doesn't have to be like this and that they don't need to worry about the fine print, we prove it by offering the Bank MAX package, which has no maintenance fees for account upkeep, no fees for domestic transactions in dinars up to 300,000, no fees for issuing a Mastercard debit card, and no fees for withdrawing money from ATMs of any bank in Serbia. With the transfer of all or part of the salary, this offer has no time limit.
It is currently very interesting to observe the changes in the profile of the average consumer. As the sector itself changes, surprising shifts in behaviour occur. Until recently, consumers in Serbia did not save money in banks, especially not in the domestic currency. In 2024, dinar savings recorded the highest nominal annual growth ever, reaching as much as 35%. People are more educated and cautious, which directly impacts the reduction of misuse and the improvement of the quality of the banking sector’s credit portfolio – with the share of problematic loans at a historical minimum.
Our typical customers already use mobile and electronic banking, but are still sometimes sceptical about innovations, accept them, but gradually. For example, they are increasingly using the IPS NBS payment system with a QR code, but still visit a branch to collect a certificate they could generate themselves through the app.
During the past year, unfortunately, our bank also encountered attempts of fraudulent activities, just like the rest of the banking sector. The most common were fake surveys on social media or convincing smishing attempts. This is precisely why we have put so much effort into Liveness, a solution that reduces risk to the lowest possible level.
Liveness is a second-generation video identification based on biometric parameters. The algorithm, in real time, accurately recognises and analyses the face using the front camera of the mobile device. The detected facial parameters are then compared with the biometric template generated from a photograph from an ID document. By implementing Liveness, the level of security is significantly higher compared to established methods, because the algorithm analyses whether the person in front of the camera is a real, living person.
Thanks to Liveness, we can provide customers with the highest level of security for high-risk transactions, high-risk logins, and mobile app installations. Also, in case of phone loss or theft, Liveness enables fast and secure account recovery on a new device while simultaneously preventing potential data misuse on the old one.
In the year behind us, we completed a major transformation during which we introduced a new brand, a new mobile and web application, as well as created a robust infrastructure and significantly expanded our team. In the future, we want to continue what we have started, to be a symbol of modern banking and the first choice for customers in Serbia. We will continue offering great interest rates on cash loans, one of the best rates for non-term savings in dinars, as well as promote our unique Bank MAX package. Numerous innovations are in development, and soon our customers, thanks to the Liveness and all other advanced solutions in the mobile app, will be able to open an account or take out a loan entirely without any physical visit to a branch or Yettel shop. With the support of the PPF Group, we will continue to implement the best global practices, and through our collaboration with Yettel, we will soon present a special offer that will create additional value for all customers.
Positive regulatory changes are certainly an important topic. The National Bank of Serbia has prepared a ‘package’ of legal proposals to improve the regulatory framework. The package includes the Draft Law on the Protection of Financial Services Users, the Draft Law on Amendments to the Banking Law, and the Draft Law on Amendments to the National Bank of Serbia Law. Thanks to these proposals, customer awareness will be raised, legal security will be strengthened and alignment with the legal standards of the European Union will take place.
First of all, it's great that they have a broader perspective on our financial system. Serbia has achieved a record inflow of foreign direct investments exceeding 5 billion euros, and the IMF has approved a three-year non-financial advisory Instrument for Policy Coordination aimed at countries implementing sound economic policies. Last year, our country also gained investment-grade status from the rating agency Standard & Poor’s, while Fitch and Moody’s, assessed the outlook for a credit rating upgrade for Serbia as positive. Our citizens are increasingly interested in novelties, and the number of foreign companies coming to Serbia is growing. I believe there are no better opportunities for starting a business in a new market.
Additionally, Serbs are known to be very hospitable, and the most common first impression foreigners have of Serbia is that they truly feel welcome. I am confident that the same situation applies when it comes to starting a business in our country. Our markets are developed and always ready for further improvements and new collaborations.
About Aleksandar Bogdanović
Aleksandar Bogdanović is the President of the Executive Committee. Before this role he managed many segments of the Bank’s operations with excellent results, including sales, product development, marketing, and asset management as Executive Commercial Director. His expertise was crucial for the development of the company and the achievement of stable profitability in 2022. Aleksandar has many years of experience in leading positions in international companies in the field of strategy and business development.
About Yettel Bank
Yettel Bank’s goal is to become a leading provider of digital banking services in Serbia by offering innovative and simple banking through user-friendly platforms that allow customers to take full control over their finances. Under the PPF Group umbrella, Yettel Bank nurtures a synergy with Yettel, with a mission to bring technology and banking closer to people. By the end of 2024, Yettel Bank was providing more than 830,000 clients. Yettel Serbia is a Serbian mobile, fixed, internet and IPTV provider, owned by the Czech investment group PPF.
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