Banks and digital transformation: priority areas

According to the results of the FG Finam study, the digital transformation of business and the state facing protracted pandemic becomes largest cost segment of Information and communications technology (ICT) sector. According to the study, just 5 years ago, only a quarter of the global ICT market could be attributed to digital transformation, and in 2022, its share will already account for about 40% of costs. One of the segments that are easily automated and put on the flow are payment solutions.


So, according to Deloitte, Russia entered the top ten countries — leaders of global digital banking along with Japan, Singapore, Norway, Spain, Belgium, Turkey, Poland, Saudi Arabia and Qatar.

In Russia, all banks, certainly joined the digital transformation and those who did not, left the market. Changes are supported and promoted by the Central Bank of the Russian Federation. For example, services such as SBP (system of rapid payments) and biometrics were initiated by the regulator. Also, the regulator is constantly Increasing mandatory reporting requirements. You must change to run processes digitizing them. According to my estimates, in 2022, banks spend on digital transformation from 10% to 50% of their IT budget — depending on the business model and the company’s budget.

Ecosystems and competition with financial institutions

Fintech companies that have recently created large-scale services with significantly more customer interaction points than classic banking business, take a leading position. Considering that over the past 10 years the banking sector has experienced a serious tightening of regulatory requirements, fintech is becoming for banks a very serious competitor. The way out that banks found is to change the business model with focus on digitalization and create their own ecosystems, developing non-financial services.

This is relevant both in Russia and around the world. For example, one of the largest American investment banks, JPMorgan, bought more than 30 companies, including the CXLoyalty technology platform, one of whose areas is the tourism business. Among the acquisitions there are also companies from entertainment. SBI, State Bank of India, creates a digital marketplace, which allows you to shop online and increase customer engagement. DBS (Singapore) develops travel marketplaces, mobility services, real estate, and payments. The ecosystem created by Sber in Russia is also a vivid example.

Digital platforms are actively going into the banking sector, apparently intending to supplant the middle-size banks. For example, Yandex, VK, Ozon and some others have already bought own banks, which will be used primarily to secure payments and lending to users of e-commerce services.

Ecosystems are a new global standard for business development and a large-scale stage in economics development. They aggregate data on producers and consumers and help to optimize resources for both. There is no way back: it is necessary to do the best to maintain domestic producers and develop a regulatory environment for ecosystems — so that they could develop, but not infringe on anyone’s interests. For banks, pivot to ecosystems is presented as a normal vertical integration strategy when  core business attracts adjacent ones.

According to the results of the Finam FG study, the following main trends are tipical for banks in the payment solutions segment:

  • Unification of payment solutions and principles of payment systems operation.
  • Transactions acceleration.
  • Increase in number of payment methods.
  • Integration of payment systems into cloud software, fintech.
  • Opting out of bank cards in favor of virtual cards.

The trend of abandoning bank cards in favor of virtual cards remains controversial. Many clients are transitioning on virtual cards and electronic wallets in smartphones, but those who are comfortable to use cash, stay. E-books, for example, are also not like everyone: people like tactile sensations, smells are important. We are not waiting for the rejection of cards, but rather an extension in ability to manage money and financial flows.

Digital transformation in SKB bank

It is obvious that digital transformation does not begin with IT, but with business awareness of the need for such change. We began a digital transformation in 2014. In order to continue to develop business and successfully compete in the market, it was necessary to promote your products. This required a powerful development team capable of working beyond Limits of existing standards and restrictions. So “SKB-Lab” appeared. Then transformation of internal culture begun, changing approaches to support and process as well as to information security. It took 6-9 months to lay the foundation for digital transformation. The total implementation of transformation processes by the bank took place after about 1.5 years. The main problem that can be encountered is the shortage of personnel for all IT directions.

In our opinion, cloud solutions cannot be called a transformation driver. This is just one more service that, with a skillful approach, allows you to use services more flexibly and finely.

Clouds are primarily beneficial for small companies or individual entrepreneurs. You do not need to buy a large server, create special premises, hire qualified personnel or ensure that there is always a backup of critical data. The only thing necessary to think about is the quality of connection through the Internet.

Will IT specialists only work in banks?

Digitalization of data and automation of processes is an evolution. At the same time, practice shows that there are still few people who are comfortable communicating with bots, and robots are so far imperfect. In the next 3-5 years, banks will definitely not give up human labor at customer service.

Yes, perhaps some video bots will appear that look as similar as possible to a human, and gradually they will begin to replace operations consultants or office managers at reception, but sharp abandonment of a profession is unlikely. Also, do not forget that a person, by nature, is social and needs communication.

In what areas and tasks people will not be replaced in the next 10 years:

  • Consultations (face-to-face and remote). Each person perceives instructions in his own way, not everyone works the same way. In difficult situations, a living person always comes to the rescue: teacher, sales consultant, doctor, etc.
  • Operationalist. While customers go to the bank, the demand for such workers will continue.
  • IT specialist. Until there are robots that can accompany and administer infrastructure or platforms, and develop software products.
  • Information security. Oddly enough, this is the most creative area both in terms of developing tools for cyber attacks and combating them.


The emergence of a large number of new technologies left hackers with a large number of loopholes for hacking networks and devices, analysts warn. According to forecasts of Global Market Insights, global cybersecurity market will increase twice from 2021 to 2027 and will reach $400 billion. However, cyber threats do not inhibit digital transformation, but, on the contrary, stimulate it (this is concerning both banks and other organizations). Vulnerability search is an endless process which contributes to the development of security systems. Basic principle of combating cybercrime in our bank: the fight should be at all levels — from the protection of external perimeters to specific systems for specific addresses and ports: protection against DoS attacks, firewalls, systems in the bank loop, control of bank systems, virus control so that there is no data leaks, etc. Investments of SKB Bank in information security grow from year to year. Today it is about 15% of the IT budget.

By Denis Kuznetsov, Director of the Digital Technology Department of SKB Bank

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