ELECTRONIC banking has developed rapidly in Slovakia since the first on-line financial services were offered by Tatra banka less than two years ago.
Tatra is the country's industry leader in Internet banking and, according to the Institute for Public Affairs (IVO) think-tank, controlled nearly two-thirds of the domestic on-line market last year.
On-line banking is one of the fastest-developing Internet sectors worldwide, and the growth of the Slovak market follows patterns seen in more developed economies several years ago. The US-based Forrester Research group predicts that more than 110 million Europeans will be using on-line banking services by 2005.
Tatra started its on-line service, Eliot, in June 2000, and within four days had registered 10,000 clients. While this was helped by the bank's offer of a Sk1,000 bonus for the first 10,000 registrants, low deposit requirements and no-fee services drew large numbers of young people, as well as people opening second accounts at Tatra for the purpose of on-line banking, says IVO. Today the service is used by almost 70,000 clients and continues to grow steadily, say company representatives.
Although other banks were slow to begin, all major financial institutions now offer some services on-line to their clients. In August 2001, Všeobecná úverová banka (VÚB) reported that it had exceeded 60,000 on-line customers.
The country's largest bank, Slovenská Sporiteľna, has also been expanding electronic operations and reported in November that over 45,000 clients had signed up for its electronic services.
The IVO also points out the importance of developing Internet commerce and on-line payment systems in Slovakia. While credit card payment is becoming more and more common throughout the world, it is practically non-existent in Slovakia.
Instead of credit cards, banks in Slovakia are offering their own on-line payment possibilities, under which a customer making an Internet purchase is redirected to his bank's on-line facilities. After authorizing the payment, the customer is directed back to the site where the transaction was initiated.
Tatra was the pioneer in this field with its Eliotpay and Tatrapay systems. Roman Začka, head of public relations at Tatra said: "Eliotpay is an easy and user-friendly way to make payments in the Internet environment and provides a hassle-free service for the customer as well as for the e-shop owner."
Slovenská Sporiteľna's Sporopay and Poštová Banka's Online offer similar services.
One service that has helped develop electronic commerce is the web portal Monex.sk, which acts as an intermediary between customers, shops and banks.
Because the portal operates as an intermediary, it unifies the various on-line payment processes of different banks and merchants, and allows customers to purchase goods electronically without using a credit card. Monex currently uses its on-line payment system in conjunction with Tatra banka, Poštová banka and Prvá komunálna banka (PKB).
While Internet banking has been growing rapidly, most Internet users in Slovakia connect from work or school, and connection costs to residences continue to be an obstacle to banking at home and business-to-customer Internet sales.
Začka points out: "The main difficulty in the area of internet banking and e-commerce in Slovakia is the level of penetration of Internet service among the population. Improvement of this situation would bring more space for Internet banking and e-commerce and as a consequence an excellent opportunity to offer new advanced products to our customers."
Although prices for Internet access have fallen dramatically across Europe in recent years, in Slovakia they have gone up and the country today has the most expensive Internet access charges of member countries in the Organisation for Economic Cooperation and Development (OECD), when consumer purchasing power is taken into account.
Consequently, says the IVO, only 2.4 per cent of Slovak households had an Internet connection in mid-2001, compared to an EU average of 28 per cent.
11. Mar 2002 at 0:00 | Dewey Smolka