Navigating the Opportunities of Digital Transformation in the Banking Industry

Tomas Stegura, Head of Digital, CSOB

Tomas Stegura, Head of Digital, CSOB

Tomas has been working in the CSOB group since 2006 and has devoted a large part of his career to digitization. Tomas worked in Retail, Relationship Banking and IT. he graduated from the University of Economics in Prague, majoring in Informatics.

Could you please tell me briefly about your current roles and responsibilities at CSOB?

My current role is to build and monetise all digital channels for retail clients, SMEs, and corporate clients. This includes mobile banking and internet banking. I lead a team of 230 internal people and approximately 250 external people to accomplish these objectives.

My primary responsibility is to develop effective digital strategies that enhance customer experience, increase engagement, and generate revenue for the organisation. To achieve this, I need to have a deep understanding of customer needs, market trends, and technological advancements in the digital space. It’s a challenging but exciting role, and I enjoy working with my team to deliver results that positively impact our clients and the organisation.

What are some of the challenges that you face in the industry right now?

The current economic situation in the world and Europe presents the foremost challenge for the banking industry due to the high inflation levels. As a result, we are focused on helping our clients to overcome these challenges and adapt to the current economic environment.

There is alsoa growing trend across the banking industry towards digital transformation, with many clients looking to migrate from physical branches to digital platforms. While some clients are eager to adopt digital banking, others are hesitant and prefer human interaction. This requires a balance in the distribution model to cater to the needs of both types of clients.

“AI is showing enormous potential to enhance control procedures, particularly in combating money laundering and ensuring the security of our client’s finances. By using AI-powered systems, we can quickly and accurately identify potential threats and take appropriate action to prevent fraud or criminal activity.”

Equally challenging for the banking industry is the security aspect. In the Czech Republic, there has been a significant increase in phishing and cybercrime, which poses a severe risk to our clients’ identities and finances. We are actively working with the state and police to combat this issue, but it is primarily organised from abroad, making it challenging to tackle the criminals. We are focused on improving our detection systems and security protocols to ensure that our clients are aware of potential threats and are protected from attackers who may attempt to mislead them into making fraudulent transactions.

What are the benefits of implementing AI in the banking industry, and how are you tapping into its potential?

The introduction of AI is one of the major technological breakthroughs in the banking industry. At CSOB, which is part of the KBC group, we have implemented a digital assistant called Kate, who is able to understand the Czech language, which is essential for our market. Kate provides personalised digital services tailored to each customer’s needs and preferences, using natural language processing to understand written or spoken words.

Kate has revolutionised our processes by enabling common simple tasks to be completed digitally without human intervention. For example, if a customer asks Kate to send money to their friend Peter, Kate can browse through the contact list and transaction history, find Peter, translate his name into his account number, and prepare the payment order for execution. This significantly reduces the time and effort required to carry out these tasks, enabling customers to complete transactions with a simple voice command and authorisation through our security application.

Another significant benefit of AI is its potential to assist customers in need, eliminating the need for them to wait in line to reach a call centre and speak to a human operator. AI-powered voice bots can handle basic inquiries and tasks, providing customers with quick and efficient solutions.

AI is also showing enormous potential to enhance control procedures, particularly in combating money laundering and ensuring the security of our client’s finances. By using AI-powered systems, we can quickly and accurately identify potential threats and take appropriate action to prevent fraud or criminal activity.

How can banks introduce future-proofed technologies and processes to keep up with their competition and phishing threats to thrive in today’sdigital-first world?

Many technologies are available that can help make the digital world more secure. At CSOB, we are actively seeking new solutions and implementing various types of biometric verification to enhance our security measures.

One of the biometric verifications we use is the one offered by the phone, such as face ID or touch ID. We insert specialised biometric verification to ensure that the person corresponds to the person we have identified in the branch. We store the IDs in our database and can compare the biometric information within the photo of the ID with the real-time selfie of the client to verify their identity. This is similar to the process used at airports to verify a person’s identity.

We also use a system to ensure that the biometric profile of the user matches what we know about them in the longer term. Based on data from the mobile phone, we can detect whether the person is holding the phone in the right order, typing in numbers and letters at the usual speed, and watching the screen at the usual angle. We can also check whether their behaviour when logging in to our app matches their past behaviour. If their behaviour changes, we introduce further verification processes to ensure the user is correct.

For example, if a user tries to authorise a transaction and send money, we can check through a call centre by calling them to ensure the transaction is legitimate. These technologies enable us to make the digital environment more secure and protect our customers from potential fraud or identity theft.

Our current system is on par with the currently available technology. We are actively looking for more technologies to make our process swift and free from phishing.

Is there any advice that you would like to give to your peers in the industry?

Maintaining client trust is my sole advice. The financial industry relies heavily on trust, making it essential for anyone entering the industry to ensure compliance with regulations and protect all client data. While software-as-a-service (SaaS) can be a faster way to build a new client proposition, it can be risky as it involves handing over data control to cloud and service providers. It is up to each company to evaluate whether SaaS fits their strategy and provides adequate security and reliability.

To ensure safety, security, and reliability, every successful company in the finance industry needs to ensure that their services are available and behave predictably. Ideally, services should be available 24/7, and when something goes wrong, companies must communicate clearly about the issue and when it will be resolved. This builds trust with clients and ensures they feel secure when entrusting their finances to a particular institution.

Fraud

Retail

SaaS

Financial

Customer Experience

Natural Language Processing