Digitalising the financial services sector naturally calls for more than simply developing an app. Digitalisation goes deep into the bank’s foundations and systems. And it requires significant investment to be at the cutting edge of developments and hold one’s own as an IT service provider with systems to rival those of other leading IT companies. In addition to IT experts and software developers, there’s a particular need for people with an interest in big data technologies and machine learning who are coming from different disciplines such as mathematics and statistics.
The face of banking is changing
The traditional meets the modern age. Erste Bank has been around for 200 years. But nevertheless, we are creating a completely different working environment on Erste Campus. A start-up mentality with fast development cycles on the one hand – classic banking IT, with its emphasis on the very highest security standards and stability on the other.
How Erste Bank protects itself against cyber attacks
Erste Bank has its own Cyber Defense Center. The employees working in it analyse between seven and eight million log data items every day and track down suspicious movements. And if everything goes to plan, globally managed attacks on banking systems are identified before they can do damage, too. Our system spots if a device with malware on it logs in, and blocks the user account. The customer is, of course, informed of this immediately.
The security standards for Erste Bank and George are so high that many attack campaigns avoid our banking group from the very start. And our employees in the Cyber Defense Center work quickly to counter phishing attacks by identifying fake websites at an early stage and getting them taken down off the net. In 2017 alone, some 900 websites targeting Erste Bank und Sparkassen customers were taken down – the majority of them before any of the treacherous phishing emails could reach our customers. But the Cyber Defense Center also protects the bank’s entire infrastructure. Some 20 larger-scale DDoS attacks – mainly on Erste Group subsidiaries in our easternmost countries – have been prevented.
Analysis tools will function even more reliably in future thanks to artificial intelligence. And our customers will benefit from this – fraudulent withdrawals or payment transfers will be identified even more quickly and easily than before. Our task is very clear – we are there to guarantee our customers the greatest possible security. Online banking is the bank’s most important digital channel – and in this area, we intend to continue to help shape the future of digital financial services.
Batavia! New platform based on blockchain for financing the movement of goods
The Bank of Montreal (BMO), CaixaBank, Commerzbank and Erste Group have joined an initiative started by UBS and IBM in 2016, the aim of which is to set up a new global trading platform based on blockchain technology. It is intended that companies of all sizes from around the world will have access to this platform, which goes by the name of Batavia. The platform will aid the financing of all types of trading activity, for example, the transportation of goods by air, land or sea.
Building on the initiative started by UBS and IBM, Batavia is to be further developed as a trade financing platform on the basis of the blockchain project Hyperledger Fabric. The five banks and IBM participating in this initiative are also involving experts from the transport sector as well as bank customers in order to ensure that the platform will be flexible, user-friendly and commercially viable. The first pilot transactions with customers through Batavia will be carried out in the second quarter of 2018; these will help us to check out the development to date and assess the further development of the platform.
The new global trade financing platform is intended to make transactions more efficient, transparent and inexpensive; and thus make it easier for companies to build transnational trading networks with a multitude of participants around the world. Furthermore, Batavia will make it possible for the participants to track goods shipments from the point of dispatch from the warehouse to their loading onto a plane, truck or ship and through to arrival at their destination; and throughout the whole process release payments one step at a time.
The platform encourages the participants in a trading network to make contact with one another – and could, as a result, change global trading significantly for the better. The open design of the platform makes it attractive to banks, suppliers and public authorities alike. It will help create new trade channels, bring new companies to market and speed up processes that had previously been both cost and time-intensive.
Up until now, trading partners – be they sellers, buyers, their banks, transport companies, inspectors or regulators – had to produce extensive, paper-based documentation to ensure trading agreements were processed securely. These processes can take weeks, incur additional cost and make data suddenly subject to errors due to all the manual processing involved – and they tie up capital. Delays and a lack of transparency in the business make it harder for companies to access finance. This limits their options in transnational trade, and with it, sales growth. The Batavia platform will relieve users of the trouble of processing and comparing documents; and allow buyers, sellers and their banks to process transactions with a high level of efficiency and transparency.
As contracts are captured digitally in a permanent, unalterable ledger in the blockchain, processes are extremely transparent and can be viewed by all the parties in a transaction. Until a contract has been fulfilled, its status will be automatically updated with data provided either by IoT (internet of things) sensors or users. By ensuring data is correctly relayed onwards, Batavia will save users time and money as it will reduce the amount of checks required from third parties; and the risk of errors, manipulations and disputes will also be significantly reduced. If every party involved in a transaction has access to the same presentation of the facts, this will create greater trust between the parties, which in turn will make the creation of larger, decentralised networks possible – and as a result, lead to more business being done.
Written by Erste Bank