From the Balkans to Uzbekistan: Can the Digital Banking of Eleven Countries Be Standardized?

How can the same digital banking experience be built in a small Albanian town and a large Uzbek city? At the recent Ergomania Business Breakfast, we sought the answer to where the line is drawn between central scalability and local customization – and why “national character” does not determine how digitalized a market is.

 

Perhaps the most exciting chapter of OTP’s past two decades is being written not at home, but across the border. The guest of the business breakfast was Zoltán Balás, Head of International Retail Digital Channels at OTP Bank. Balás spent 11 years at CIB, 5 years at Intesa’s international headquarters, and for the past 9 years at OTP, he has been responsible for a portfolio in which a regulated eurozone market and an explosively growing Central Asian bank exist side by side. The discussion was moderated by Dr. András Rung, founder and CEO of Ergomania.

One Portfolio, Eleven Countries, Three Different Worlds

OTP Group is one of the fastest growing and one of the leading banking groups in the Central and Eastern European region, with outstanding profitability and a stable capital and liquidity position. With nearly 40,000 employees in now 11 countries of the CEE and Central Asian region, the Group provides universal financial services close to 17.5 million customers.

As the most active consolidator in the banking sector of the Central and Eastern European region, the Group has successfully acquired and integrated 25 banks since the early 2000s.

OTP Group is headquartered in Hungary and has a diversified and transparent ownership structure. The Banking Group has been listed on the Budapest Stock Exchange since 1995.

OTP Group has been ranked among the world’s 400 strongest companies in the Forbes Global 2000 list.

This size allows management to view the network as a classic portfolio, where the risks and returns of the markets balance out each other. The stability of the banks operating in saturated eurozone markets is counterbalanced by a country on a steep growth trajectory like Uzbekistan. The professional challenge is how to manage the diversity of such vastly different markets along a single, group-level digital and UX logic.

What the Numbers Reveal: From 20% to 88% on the Scale of Digital Maturity

Balás shed light on the situation using concrete data from the group’s digital key performance indicator (KPI) set. The functional maturity of the mobile application – today the most important customer relationship channel – is measured based on the benchmark of the consulting firm BCG: the 0–100 scale evaluates not only the presence of functions but also their quality and usability.

Central Europe’s average on this scale is typically 35–37 points, a typical Revolut installation is above 50 points, while the European vanguard – the continent’s top ten banks – resides in the 75–80 point range. OTP’s own subsidiary banks are scattered between 20 and 60 points: in the smallest markets, such as Albania or Montenegro, where customers still only need basic functions, they stand at around 20 points, whereas the more advanced Russian, Ukrainian, and Bulgarian solutions reach up to 60 points.

Since the benchmark does not overvalue complex ecosystem elements, one can reach the top of the field even with focused operations.

The ratio of monthly active users (MAU) provides an even broader picture: activity ranges between 20% and 88% on the retail side, and between 30% and 90% in the SME segment.

Behind this variance lie the three distinct regions of the portfolio. The digital vanguard is made up of the post-Soviet markets – Russia, Ukraine, Moldova, Uzbekistan. Here, competition is fierce, digitalization started early, and since the skilled IT and design workforce constantly rotates among banks, market capabilities are balanced. Customers embrace every new solution without fear, making a 70–90% activity rate easy to maintain. The midfield consists of the advanced Central European markets – Hungary, Slovenia, Croatia – with 65–70% activity. The third group is the Balkan markets, where the goal in many cases is not yet to sell a complex application, but rather the most basic education, encouraging bank card usage over cash. Digital penetration here is sometimes merely 20–30%.

Not National Character, but Real Customer Demand Decides

Although it would be tempting to explain the differences with some sort of “national character,” the data shows otherwise. Digitalization is not a permanent given, but rather the current state of the market, which can be continuously shaped with appropriate product development. The differences are rooted in specific customer needs and the local economic environment. In Central Europe, for example, savings products are very well understood and sought after by customers; with a well-built goal-setting feature, even a 30–35% usage rate can be achieved. This works less effectively in post-Soviet markets. There, customers are driven more by gamification and instant rewards.

These cultural subtleties can cause surprises for designers even in seemingly similar markets. During a previous joint research project by Ergomania and OTP, for instance, it was revealed that Croatian customers think differently than Hungarians on numerous UX issues. This is not even the distance between the two extreme points of the portfolio, an Uzbek and a Slovenian customer.

The 20% Lesson: When the “Master Copy” Cannot Be Copied

To overcome diversity, the banking group also tried the most obvious solution: a common, group-level digital platform. The basis of the experiment would have been a master copy, a reference solution built on the Backbase platform – considered the best at the time – and adaptable for every medium and large subsidiary bank after some surface localization. The project was deliberately launched in two advanced markets believed to be close to each other, Slovenia and Bulgaria. The Slovenian team enhanced Backbase’s out-of-the-box capabilities to create the golden template, which was then handed over to the Bulgarian designers and product owners.

The result was sobering. In the end, less than 20% of the master copy could be reused in the Bulgarian market. There were three reasons for this, encoded in the operation of the banking group. The first is the price of freedom. OTP’s foreign banks face high profit expectations, but in return, they enjoy great freedom of decision. This is completely different from the operation of more tightly controlled, centrally managed Western European banking groups. The second reason is to be found in the different technological foundations. There are no two identical core banking systems across the banks; a single, unified frontend customer journey cannot be imposed over the differences between backend systems, data structures, and local product logics without it breaking somewhere. And the third, and from a design perspective the most important reason, is that local customer expectations and habits constantly interfere with central standardization.

Four Bank Management Models on the Market – and OTP’s Path

During the conversation, Rung outlined four theoretical models for managing an international banking group. The loosest formation is represented by the examined OTP model: maximum local freedom alongside rock-solid financial expectations. This is followed by the Raiffeisen-type management, which is more structured but still leaves a lot of room for maneuver, and even purposefully elevates local innovations (such as a successful treasury application) into the central bloodstream. The third is the Erste-style, strictly centralized model, where the George platform’s framework dictates the directions. The other extreme of the scale is provided by the logic of Revolut or Wise: a single, global, monolithic platform with almost imperceptible localization, where the only meaningful difference between the Spanish and Hungarian versions, for example, is in the downloading of tax reports.

According to Balás, OTP is slowly but firmly moving toward exploiting synergies. An increasing number of group-level capabilities, recommended frameworks, and mandatory solutions are being created. However, the strongest cohesive force at present is still not hierarchical instruction, but horizontal knowledge sharing. They have built forums in every professional field where subsidiary banks can see each other’s problems and solutions. There is a monthly strategic digital forum, there is a video digital sales forum where two banks at a time “demo” their own end-to-end customer journeys live, and there is also an annual internal digital conference for 80–100 people. The key to success is the direct, bank-to-bank (peer-to-peer) connection. If professionals understand each other’s starting points, they immediately adapt best practices even without the intervention of the center.

How Can the Banks Actually Be Managed on a Daily Basis?

OTP’s model is also unique in the region because the Hungarian bank operates simultaneously as a domestic commercial service provider and a banking group headquarters (HQ). Each domestic division head is also responsible for the foreign development of their own professional field, which creates a strong matrix structure. Beyond knowledge sharing, the center has two additional tools over the subsidiary banks: ownership control – annual business goals strictly integrated into the management’s performance evaluation – and priority projects launched from the center, supported by significant resources.

Currently, the largest such flagship program is Retail Next, which aims to exponentially boost digital sales and improve branch network efficiency at the foreign subsidiary banks. For the methodology, OTP also draws on external, validated knowledge. The framework, measurement structures, and the foundations of digital marketing, for instance, were adopted from the lessons of a previous McKinsey project that had already successfully run at the domestic bank.

One Design System, 99% Obligation

There is, however, one area where standardization is almost complete: the use of OTP’s own design system is 99% mandatory for the foreign banks. The shared Figma library is available to every country, and the local teams receive continuous UX support from the Budapest headquarters. The most important resource here is transparency. Almost all customer journeys of each bank are freely accessible to the others for inspiration or direct adoption, and during design reviews, the country UX professionals and product managers continuously validate each other’s work.

Although there is no common, group-level frontend platform due to past experiences, OTP exploits technological synergies in sub-areas: the platform of a partially owned development company is used by three countries; group-level contracts accelerate the introduction of personal finance management (PFM), video onboarding, or transaction enrichment; and the Hungarian competence center provides the digital measurement standards that have proven successful in several countries.

From Paraguay to the Piggy Bank: Neobank Lessons from South America

OTP’s interest has been extended in a new direction: toward purchasing minority stakes in the international fintech sector. The most exciting result of this is the Paraguay-based digital bank UENO, in which OTP acquired a below-10% stake.

UENO is a textbook neobank success story. It started as a purely digital solution, but today it possesses a full banking license and has one million such customers who opened their first-ever bank account with them. Their operational logic is ruthless but effective: they only keep alive products that reach a critical user base within a short time; features falling below this are immediately phased out. They have completely tailored the physical branch experience to education and community building: with parcel delivery, free coffee, and locally, instantly printed, personalized bank cards.

However, UENO’s most ingenious UX and service design move is aimed at retaining young customers. At the age of 16, the amount accumulated in the savings account opened during childhood is placed by the bank into a physical piggy bank, which the young person breaks open ceremonially together with the branch manager – thus “initiating” them into a full-fledged, adult customer. For OTP, beyond the financial return, the knowledge gained is the greatest yield. In the region, UENO competes with Revolut and similar American neobanks, and the firsthand experiences gained here can be channeled into traditional European banking operations.

What’s Next? Three Critical Stakes for the Next Five Years

In closing, Balás identified three challenges that will determine the future of digital banking in the coming years.

The first is the repositioning of customer relationship channels. The battle between mobile and the branch network has essentially been decided. The traffic clearly belongs to mobile, but the question remains: what will be the fate of the branches if 80% of sales happen digitally? In northern Europe, completely cashless advisory branches already exist, operating exclusively by prior appointment with customers. The question is whether the Central European region will reach this level, and meanwhile, where the contact center will find its place, as it will have an increasingly large role in outbound sales in addition to education.

The second critical point is the deeper integration of continuous discovery. Users must be involved much earlier so that the customer experience is not merely an afterthought fine-tuning. Currently, of the ten foreign subsidiary banks, only three consistently apply this iterative methodology, where UX research and validation form the core of everyday decision-making.

The third focus area, perhaps holding the greatest potential, is data analysis and precise measurement. This is where the largest untapped reserves lie in the banking sector. An OTP subsidiary, for example, recently built a data mart where frontend clicks from the mobile application, stability indicators, demographic data, product usage, and total customer value all flow in, in real time. Moreover, due to the region’s more permissive data protection regulations, that data flows alongside qualitative research data. From this multifaceted dataset, they are now beginning to extract patterns that could form the basis of future digital product development.