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4 Eurogiro News
Nova Banka AD Banja Luka is a typical
but rather rare example of a commercial
bank that did not make such a mistake.
Development of payment systems and
excellence in payments has been the
strategy of the bank since its foundation.
In this respect, Nova Banka significantly
differentiates itself from its competitors, and
the benefits are more than rewarding.
Significance of Eurogiro
The decision to join Eurogiro in 2004 proved
to be critically important for the expansion
of the bank’s remittance operations beyond
the typical banking approach of “let us
partner with some MTO and forget about
remittances”. In this respect, over the
years, the bank has built strategic corridors
with more then 20 major national postal
operators and banks operating within
Eurogiro. The bank has been very active
in supporting technologies offered by
Eurogiro and, in this sense, has been an
active member of ESSP and MLF, as well
as one of the members that support ECI
®
transactions on the sending side.
Overview of current operations
Nova Banka currently integrates its own
network of branches, the networks of 3
domestic postal operators in Bosnia, and
its link to domestic banks via SWIFT,
into a fine-tuned network for processing
payments. Inbound transactions received
from Eurogiro are paid via a SWIFT-
based account-credit facility, whilst cash
transactions are delivered via domestic
postal operators. On the sending side, in
addition to Western Union, the bank uses
all available technologies within Eurogiro,
including money orders, credit transfers
and ECI
®
. The processing platform is
automated and enables the bank to use the
minimum number of staff for the range of
daily activities.
Results
Multiple channels of delivery of payments
and various underlying technologies have
resulted in a significant growth in business.
The total volumes have been growing at
an annual rate of 8-10%. In 2010, the bank
processed 32,000 transactions of various
types, whilst in 2011, the total number
exceeded 40,000. The bank plans to process
52,000 transactions in 2012. Roughly half of
this volume is attributed to Eurogiro.
The bank is planning major expansion in
2012 in the development of its corridors by
introducing other money transfer partners
and by signing new partnerships within
Eurogiro.
How can commercial banks benefit from
remittance business?
Banks are usually indifferent to their own remittance business, as most bankers do not clearly see
the benefits, or benefits are perceived as being too small to warrant attention. Remittances are
something that banks do “on the side”, and this is mostly driven by competitive pressure rather than
through a specific strategy aimed at developing this type of business. I think this is a big mistake
Future plans
The bank’s strategy for the future
development of its remittance operation
will focus on online remittance payments
and the development of ECI
®
corridors
within Eurogiro. Nova Banka views ECI
®
as an excellent product, which can fully
substitute money orders in the future. In
this respect, the bank is actively advocating
the implementation of the ECI
®
product
amongst its partners in Eurogiro. This is
backed by a concrete business proposition
– each new member that introduces ECI
®
for incoming transactions will be able to
immediately receive transactions from Nova
Banka and thus start covering the costs of
the investment in this product.
In parallel, the bank plans to be one
of the first banks in the region to offer
online remittance payments which will
enable senders to register on the bank’s
website and then use their debit or credit
card to send payments online to pre-
defined accounts in Nova Banka. This
new innovative technology will further
differentiate the bank from its competitors
and cement its position as the leading
payments provider in the region.
3
Mladen Perkovic, Head of Technology
Development, Nova Banka AD Banja Luka
and Eurogiro General Contact person