CZECH REPUBLIC Trends and Developments Contributed by: Tomáš Sedláček, Zdeněk Husták, Adam Nečas and Mikuláš Zacpal, BBH, advokátní kancelář, s.r.o.
Another newly launched payment innovation is the option to send payments directly using the recipient’s phone number. Currently, this ser - vice is offered by six banks, with that number expected to increase to nine in 2025. To use this service, customers only need to link their phone number with their account number in the respective bank applications. The registry of phone numbers enrolled in Contact Payments is managed by the CNB. The only drawback to contact payments is that, for now, payments can only be sent within the Czech Republic. Enhancing Cybersecurity to Strengthen the Banks’ Market Position Banks are not only benefiting from the advan - tages of faster processes and easier commu - nication, but are also exposed to increasingly sophisticated cybersecurity threats. The new DORA (Digital Operational Resilience Act) regu - lation introduces a comprehensive framework to strengthen the digital resilience of banks and other financial institutions. The DORA is not just about technical aspects, but also seeks to thor - oughly adapt governance and risk management, which requires significant adjustments in organi - sational structures and the cybersecurity culture. In response to the rising number of cyber-attacks targeting banks, cybersecurity is becoming not only a necessity, but also a competitive advan - tage for banks. Protecting clients’ personal data is now just one component of comprehen - sive cybersecurity governance. Banks that can swiftly detect, resolve or ultimately prevent cyber incidents strengthen trust and loyalty among their clients. Robust cybersecurity practices are increasingly viewed as essential to maintaining a strong market position, as customers prioritise financial institutions that demonstrate resilience against cyber threats and a proactive approach to digital security.
The key challenge is how to align robust security with convenience. Banks are not only improving user trust, but also differentiating themselves in a competitive market where digital experience is key. This balance of security and ease-of-use has become essential for retaining and gaining customers and strengthening loyalty. The Role of Artificial Intelligence in Modern Banking The banking sector has been undergoing a dynamic transformation in recent years with an increasing emphasis on the use of artificial intel - ligence (AI). AI is fundamentally changing how banks interact with their clients, not only being used to enhance customer service, but also in key areas such as AML/CFT. Analyses of the cur - rent situation and future trends indicate that AI implementation will become a significant com - petitive factor in the banking sector. One area in which AI is driving major changes is customer service. Banks are increasingly invest - ing in tools that allow them to personalise and accelerate communication with their clients. Recently, the Czech market has seen a rise in AI- powered chatbots and virtual assistants capa - ble of responding to customer inquiries in real time, offering recommendations, and assisting with basic tasks. This type of innovation allows banks to delegate part of their workload to these technologies, enabling bank employees to focus on tasks that require a personal touch. Thanks to AI’s capability to process and analyse vast amounts of data, the approach to service personalisation can be taken to an entirely new level. The findings of the Digital Banking Matu - rity 2024 study highlight the growing importance of the user experience in banking, wherein the UX is becoming a crucial factor for maintain - ing loyalty. Clients seek a seamless and highly
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