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Polish banking innovations: the best in the world? [#SIBOS]

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I felt honoured to be invited to moderate the keynote discussion of Polish Banking Innovation today.  The speakers at this session included:

Michal Panowicz, Director of Marketing and Business Department, mBank SA
Piotr Wiesiolek, First Deputy President, Narodowy Bank Polski
Iwona Sroka, President & CEO, Central Securities Depository of Poland (KDPW)
Adam Tochmanski, Director of Payment System Department, Narodowy Bank Polski
Michal Szymanski, Vice President, Krajowa Izba Rozliczeniowa S.A.
Mieczyslaw Groszek, Vice President, Polish Bank Association

This was a special session that many may have missed, at their loss. 


Because it really was a wake-up call. 

The Financial Services Club has been operating in Poland for two years now, and we have covered many of the key developments: real-time payments, contactless cards leadership, the most innovative retail banks, a stock exchange that attracts more liquidity than most and more.  However, it was only as I prepared for this session that I really saw the amazing turnaround in Poland, not just in banking but as a country.

It was just 25 years ago that Poland escaped the grip of Russia’s iron curtain – something their neighbours in the Ukraine still feel – and Poland emerged from that curtain with nothing.

There was no banking in 1989.

25 years ago.

In 1989, Poland was a financial markets desert.

In retail banking, there were just two retail banks offering one branch to cover 100,000 people.  There were no credit or debit cards, no ATMs, no foreign banks and no cross-border transfers.  The average deposit holder had just USD$390 with the bank, and the idea of credit and loans was an irrelevance.

In investment markets, there was no stock exchange or central counterparty.  That’s a capitalistic thing.  Everything was state-owned.

In fact, there were just nine commercial banks, over 1600 cooperative banks and an inflationary economy running at 586% hyperinflation rates per annum.

The average GDP per capita was USD$6,154 and most people for under banked and disenfranchised.

25 years later, the picture is completely different.

Poland is a growth economy and has had positive GDP growth every year since 1991, resulting in a tripling in GDP per capita to USD$22,201 per person today.

In particular, since the Global Financial Crisis hit, Poland has been immune.  The cumulative GDP growth in Poland since 2007 had been over 20%.  Compare that with the UK (-1.4%), Italy (-8.7%) and Greece (-23.6%), and you can see that Poland is a star performer.  In fact, it’s Europe’s #1 performer, becoming the sixth largest economy in the European Union during this period.

A great deal of this stellar transformation is thanks to the government’s openness to change.

Poland opened its borders to foreign investment early, and saw many foreign banks enter the economy with investment.  In 1989, Poland’s banking system was 100% domestic but, by 2008, 72% was foreign bank investment owned (today it’s 62%). 

This wave of foreign bank investment brought huge benefits to the economy, first in upgrading the banking system to being at parity with the rest of Europe and, more recently, leap frogging Europe markets to gain leadership in digitisation (as those of you who have read my news about mBank will know).

Amazingly, alongside this, Poland’s stock exchange has become a world leader.  The Warsaw Stock Exchange now attracts listings from across Central & Eastern Europe and hast the eighth largest pool of liquidity and fifth largest futures and derivatives exchange.

Poland was one of the first countries to upgrade its ACH to process payments in real-time and, thanks to that and other developments, sees heavy moves amongst consumers towards mobile and contactless payments.  Half of Poland’s citizens access banking online and 12% use mobile bank services.  More importantly, Poland created a co-ordinated rollout of contactless payments and leads the world as a contactless payments country based upon NFC.

Over 60% of issued cards have an NFC chip inside, 57% of the country’s POS are contactless and a third of all card transactions are made using contactless payments capabilities.  That is phenomenal and Visa, quite rightly, point out that Poland is a leader in this space.

The net:net is that whether its retail, commercial, transaction or investment banking, Poland has seized the day in all of these areas.

This is an incredible transformation in just 25 years, and is light years ahead of many of the European accession countries (Hungary, Romania, Czech Republic, Slovakia, Serbia, etc).  Part of that is because Poland has 40 million people - so it is a mass market - and mainly because Poland embraced the release from Communism more than any other Central European or Eastern European country.

OK, enough advertising about a small country that has taken leadership in just 25 years.  If you want to know more, you should come along to our next Financial Services Club meeting in Warsaw!  Oh yes, that’s next Tuesday with John Rendall, the CEO of HSBC Poland, discussing his views of how these markets differ to all others.

Now I’m disappearing to think about the next session on Basel III.  How dull after such an innovative session on transformation, but someone has to do it ...

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Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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