Fintechlab — Forecasting the Future with MKB’s Experts
Welcome to our newest series, where we ask leading experts from MKB Bank to share their predictions and insights about what the future might hold for the financial sector. Read through these short interviews to get a sneak peek about how they see tomorrow’s fintech world!
In this week’s edition we hear from Ferenc Kutala, who leads the bank card product management team. Read on for his thoughts on the future of bank cards!
So, let’s start with a tough question: are bank cards really dying?
Well, bank card penetration can be measured in two ways. First, the number of the customer/bank card disposition, second, the number of transactions with bank card and the cash flow through them. In the past few years, there has been a steady increase of 20–30% in cash flow in Hungary. Foreign traffic is even more dynamic. For the question when could the physical bank card expire the answer is when we find a safer and more convenient payment method, but it’s not the case today.
How do you see the next 5–10 years, what could be an alternative payment method?
I think various wallets and the wearable payment devices will become widespread, and there is the biometrical payment as well, but it depends on the very strong regulatory side. Biometric payment or face ID technology is also evolving dynamically, becoming more reliable, so I am confident that we will make significant progress in this area within 10 years.
On what basis can an alternative form of payment spread?
One possibility is if customers recognize the benefits and the solution is fancy and trendy enough to be spread — which requires a broad media interface or strong brand awareness. In Hungary with the implementation of the Instant Payment Services (in Hungarian: azonnali fizetési rendszer — ÁFR), the regulator wants to see a much more dynamic economy, and by that it is expected to whiten the economy. Also one more factor influencing the market: the giants like Apple, Google, Mastercard or, OTP Bank, who can very strongly influence what alternative payment customers choose outside the bank card.
The other way if there is no other option. I would like to illustrate it by an example: in China, the QR code-based and application supported peer-to-peer method has become so widespread that both cash and credit cards have been completely displaced. The government’s controll is very tight here, bank card as an evolutionary step was skipped in China, because the government does not allow anything else than their own solution (Wechat, Alipay).
A bank’s digitization can affect the role of bank cards?
At the end of the day, the bank aims to provide customers with a convenient and secure payment. If a bank doesn’t think ahead or doesn’t develop, they cannot invent solutions or implement them. The customer goes where they can find these solutions.
We have to be there in people’s pockets. The bank card and mobile are already there and now we reached their smart watch as well
What alternative payment methods supported by MKB Bank?
MKB Bank was among the first to come out with the mobile app, so you can pay with your mobile instead of a card at POS terminals. Also, a great achievement for us is the implementation of Apple Pay from 15 of September, so we can also support iOS customers — for our entire bank card palette — as well.
The Instant Payment Services is mandatory for all the banks. Within the classic business development of the bank, MKB Fintechlab, the innovation center, is constantly exploring solutions and alternatives that could be integrated into the everyday lives of customers.
There was a re-design of bank cards and also you re-think your portfolio as well. Tell me about the milestones at your department.
Last year, the bank took a big step to make its bank card portfolio the market leader. It was not only a customer need based portfolio rationalization but three brand new cards have been introduced, two of which have not yet appeared elsewhere in the country. Mastercard World Elite card has a unique service content, the goal is to serve the premium customer base, because the bank card itself is the connection between the customer and the bank. On the Business side, the other card is the Mastercard Business Gold, which offers the highest available — platinum-level — service to commercial customers.
We also worked a lot on the design of the bank cards. Our aim is to offer our customers a balanced, unique designed bank cards, and we are proud to offer an outstanding card palette in the market.
Product development is an ongoing activity, so we mustn’t stop for a moment.
