Tibor Johancsik, OTP Bank’s deputy CEO in charge of IT and bank operations, reports that going digital through agile and IT transformation is well underway. The Hungarian bank plans to drive efficiency by standardising systems across its regional footprint. 

This article is part of The Banker’s Special Report, Digital transformation across European banking groups, in association with Backbase.

Q: What is your digital transformation strategy?

A: OTP Bank has always focused on keeping pace with the digital transformation taking place in the world, as well as incorporating the latest technological developments into how we operate and serve our clients. Innovation is one of the four pillars of OTP Group’s strategy, alongside stability, profitability and growth. We aim for our customers to be able to access our services whenever they like and in the easiest way possible. This requires constant refinement of our channels in line with client behaviour.

This highly responsive process is enabled by our agile transformation that is already going on in the group, which helps us adapt to rapidly changing digitalisation trends. Business problems, organisational changes and strategic and product challenges are all increasingly solved with the help of digital technologies within OTP Group. For example, we rolled out digital end-to-end online account opening with customisable and modular account packages, end-to-end personal loans, digital signature pads, advanced ATMs with a cash-in function, and Innovation Branch Offices.

We have launched a significant IT transformation programme, aiming at replacing some of our fundamental cornerstones with next-generation technology and processes. Besides redesigning our core products and services, we have also challenged ourselves in the world of start-ups by building two successful spinoffs, OTP Mobile and eBiz [a digital platform for small and medium-sized enterprises]. We incorporate their new solutions while remaining open towards great ideas coming from outside OTP. We are also preparing the fourth edition of our international Start-up Partner Programme in the coming weeks.

Q: How is it being rolled out across your regional footprint?

A: Digitalisation seems the only way to provide our clients unlimited access to the services they want, when they want and how they want. On the other hand, self-service enabled by digitalisation is a change desired by both clients and service providers, so this is a unique win-win situation. Going digital also means more small changes, which can be achieved through agile transformation complemented with IT transformation as mentioned above.

Our digitalisation efforts are structured to focus on three key areas: managing and modernising legacy systems, agile delivery of client-focused innovative solutions, and increasing efficiency, without compromising development, operational reliability and safety. We highlight digital innovations and trends receiving more attention in the region and in Hungary, such as artificial intelligence-driven predictive banking, advanced data analytics, interactive and conversation-based solutions and open banking. Going digital via agile and IT transformation has gained significant interest in our subsidiaries where it is already underway in many cases.

Q: Are you trying to create a single digital experience across multiple countries?

A: Of course. A development is more cost-effective if you extend it in multiple countries, but sometimes there are legal or technical boundaries. There is also the dilemma of the tailor-made suit versus the ready-made one: the first better serves the client, in our case the given country at a cost not appreciated by the market, while the other incorporates a few compromises. This is where we have to find a balance.

Some of our core systems are based and operated at headquarters, and after each acquisition we check all the main systems again to find best practices and eliminate duplications, and we adjust our long-term development projects accordingly. We aim to standardise systems to make them more efficient in all 12 countries where we have clients.

Over the past few years, we have been growing by acquisitions, and given this approach we were diversifying by nature. In each country, where we were already established we have integrated the existing and the new entity into a unified bank by combining components from both the local bank and the group. In the next phase we shall be focusing on group solutions in selected technical and business domains, where local regulations are do not create major obstacles. Client needs are globalising, especially in the world of digital channels and service access, and this is giving us a strong push to go global in this domain.

Q: What would be the ideal solution?

A: Recently, we have found ourselves in a rather exciting competition triggered by digitalisation. We are not only competing with banks but also ‘big tech’, application programming interface providers and fintech. The key is how one manages the changes both technically and mentally; naturally the latter is the more difficult. The race is fast so if we want to keep up and maintain our leading position in central and eastern Europe, we need to lead these change processes as well.


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