Polish Banks: Innovation Engine or Image Strategy? Debate at European Financial Congress

The banking sector's embrace of innovation is a key factor in its competitiveness, but a panel discussion at the European Financial Congress (EKF) in Sopot explored whether these innovations truly benefit the economy and customers or primarily serve as a public relations strategy. The debate, "Financial Institutions in the Age of Innovation: Who Wins?", sought to clarify the tangible impact of these advancements.

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The story of innovation in the financial sector is ambiguous. Firstly, because although in the last year the sector achieved record revenues and profitability, it has never been so dependent on interest income. Moreover, this share is significantly larger than the EU average.

Michał Kurowski, director at PwC Poland, opened the discussion by noting the ambiguity surrounding financial sector innovation. Despite record revenues and profitability in the past year, the sector's heavy reliance on interest income, significantly exceeding the EU average, raises questions. Kurowski pointed out that globally, many financial innovations have boosted commission income, and the profitability of fintech firms supports the idea that investing in innovative services is worthwhile, even if the scale isn't yet fully recognized in the broader sector.

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The profitability of the fintech sector confirms the thesis that investing in innovative services and products makes sense.

A particularly concerning trend highlighted by Kurowski is the banking sector's apparent withdrawal from its role as an engine of economic innovation. In recent years, banks have shown a greater inclination to finance the state by purchasing government bonds rather than extending credit to businesses that could drive innovation. Despite this, Poland has developed one of the most advanced banking infrastructures in Central and Eastern Europe, with customers being highly receptive to new technologies. This receptiveness allows Polish banks to innovate at a global level, but Kurowski questioned why more such innovations aren't emerging, suggesting that successful initiatives often arise from collaborative efforts within consortia, whether government-backed, corporate, or team-based.

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It is puzzling that the banking sector is effectively withdrawing from the role of an engine of innovation in the economy.

Cezary Szymanek, deputy editor-in-chief of "Rzeczpospolita," introduced a debate segment by referencing Prime Minister Donald Tusk's call for Poland to become a co-creator of innovative solutions, rather than merely a recipient, in building technological sovereignty. Magdalena Proga-Stępień, vice-president of Erste Bank Polska, responded by asserting that the financial services sector is indeed generating significant innovation, citing BLIK, a popular mobile payment system, as a prime example. However, the broader discussion suggests a need to re-evaluate the balance between internal banking innovation and the sector's contribution to wider economic advancement.

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We need to change the trade balance of digital services.