Financial services without going to the bank

Serbian Banks Embracing Digital Technologies

The rapid development of digital technology has brought FinTech to Serbia, and what is certain from the beginning is that it will substantially reshape the interaction between service providers and users. Customer demands for efficiency are about to bring various technological innovations into the industry, which will create new opportunities and accelerate further development of financial services.

Transformation of Legislative Framework

Revised Payments Service Directive (PSD2) that came into force in the EU is reshaping the legislative framework and the term “payment institution”. This directive opened the doors for the numerous start-ups in the FinTech niche to play a more important role in financial services.

Although this piece of regulation has not been transposed into Serbian legislation yet, local banks seem to be aware of these ongoing changes in terms of their relations with FinTech and Blockchain, as well as the future of competition and relevant regulations. The need for digitalization of their products is reflected in their increased need to reverse their activity and services in the direction of digitalization, in order to satisfy users who are looking for more innovative banking solutions.

Latest Developments

The Serbian public can now access certain financial services without going directly to the bank, which is going to provide a more efficient approach to those services and will greatly improve the processes for obtaining a loan.

One-time password (OTP) is now offered as a faster and easier way to identify individuals, instead of a qualified electronic signature that has not seen widespread use yet. Due to the agility of the legislative authority of the Republic of Serbia and the National Bank of Serbia, a first step towards the digitalization of the banking sector has been made. In particular, the Serbian Government adopted the Law on the Protection of Financial Service Consumers in Distance Contracts last year, with the aim to enhance the use of informational technologies in commerce. The National Bank of Serbia also recently adopted the Decision on the Conditions and Method of Identifying and Verifying the Identity of a Natural Person Using Electronic Communications, which should facilitate the compliance with AML regulations in distant contracting.

A notable progress in the field of digital technology has certainly been made – the first bank to take advantage of video identification expertise and to implement it is Raiffeisen Bank a.d. Beograd. An individual is now able to get a loan without a single piece of paper – the only requirement is a camera, for the purpose of video identification.

What’s Next?

Given that the global FinTech ecosystem continues to rapidly evolve, it is expected that a similar trend will follow in Serbia as well. Regulators are prudently monitoring the EU standards and have already indicated that the PSD2 Directive should be transposed into the Law on Payment Services in the foreseeable future. As we see it, the ultimate question remains – will the banks will see the upcoming legislative changes as a competitive threat or as an opportunity to embrace innovation?


The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.