Financial services

The financial services sector is still much smaller in the CEE than in Western Europe. Market growth potential lies in it being substantially underdeveloped, its sound lending practices and conservative spending habits making the region not only attractive, but a relatively safe investment.

The predicted outlook for growth in Poland is looking positive, where it is expected to increase by around 70 per cent. Meanwhile Slovakia is predicted to grow by 45 per cent and the Czech Republic by 26 per cent between 2012 and 2016. Vocational and general training is developing in finance in the CEE region, while Poland’s banking sector is the biggest market. It is 70 per cent owned by foreign investors but still other foreign banks deem this as an opportunity to enter the lucrative Polish market.

Over one-third of all transactions in the region in 2011 was paid by card, while 20 per cent use Internet banking in the country, along with Slovakia. Online banking is also a key sector in Latvia, Estonia and Lithuania who boast the highest percentage of users in CEE, at 55, 73 and 48 per cent respectively.

Swedbank is the dominant e-banking service provider in Lithuania with 42.8 per cent of the market share, while the country’s support functions make it a hot spot for Scandinavian banks, which also dominate the Estonian sector. In Slovenia, banks are central to the financial system, while 90 per cent of Croatia’s is foreign-owned. In Serbia too, international banks hold a 75 per cent share of the sector, particularly from the EU at 70.9 per cent.

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