The year 1989 marked a turning point not only in politics, but also in banking and the economy. What did the financial world look like when card payments were science fiction and ATMs didn’t exist yet? On the occasion of the anniversary of the Gentle Revolution, 365.bank looked at how the banking sector has changed and developed, as well as the offer of banks over the past 35 years.
Currently, 10 banks based in Slovakia, 12 branches of foreign banks and 2 building societies operate on our market. Several banks disappeared or ceased their activities, or merged with another bank. A total of 424 banks and credit institutions operate here.
Banking in times of socialism
Until 1989, however, a centralized banking system operated in Czechoslovakia, which was subordinate to the state planned economy. She had a dominant position in this system Czechoslovak State Bank (founded in 1950), which had broad powers – it issued money, provided loans to businesses, managed the foreign exchange economy and supervised other banks. Its goal was to support the implementation of state plans and ensure the stability of the currency.
Another important bank was Trade bank (added in the 19th century). After nationalization, it focused on specific market segments, e.g. managed tuzex accounts, enabled trading with freely convertible currencies and provided services to foreign visitors. In 1988, it took the first step towards the development of cashless payments on the territory of Czechoslovakia; introduced plastic payment cardseven though at that time they only served as disposition cards for tuzex accounts.
Investment bank (founded in 1948) had the task of financing large investment projects within the framework of the state plan. During the 60s of the 20th century, its activities were gradually limited and in 1969 it was abolished in Slovakia.
Czechoslovak commercial bank (founded in 1964) was specialized in financing foreign trade. It started operating in Slovakia in 1969.
An important player in our market was also Slovak State Savings Bank (established in 1968). Initially, it focused on classic banking products, such as passbooks and various forms of savings. With the arrival of the 70s, it introduced an innovative tool for cashless savings and payment – sporozoan accounts. It also confirmed its position as a pioneer in the field of non-cash payments by introducing it ATMs in 1989.
The range of banking products has expanded significantly
„The range of products was limited before 1989 and focused mainly on basic products for the life of the residents. Banks mainly offered passbooks, winning passbooks, travel passbooks, current accounts and other purpose-built forms of savings. The older generation may remember the year 1972, when checking accounts were introduced, while since 1983 it was possible to pay through them the centralized collection of payments of the population, rent for apartments, telephone fees, insurance premiums, etc..,” says Linda Gáliková, head of PR at 365.bank.
In the area of loans and credit, according to her, a wider range of products began to take shape only after 1968, when they were mainly used loans for housing construction, loans with a state subsidy to young spouses, for the purchase of goods, or personal loans. However, the need for lending to residents was more limited than today, as there was a sophisticated system of rental housing, service apartments, when the issue of housing was very well covered. They were in the field of retail purchases on credit possible directly from sellers, so the banks were not significantly involved in this regard.
“Today’s range of what the bank can offer us is significantly wider and covers areas that were marginal in the past, such as investment products, or trade and payment relations with foreign countries, all in the form of online applications, available regardless of bank opening hours, or markets with immediate access“, adds Gáliková.
Rings also replaced checks
They were before the revolution checks right after cash the most common method of payment, especially in business relations. They were used for payments of larger amounts and regular payments payment vouchers. These were issued at the bank and could be paid at the post office or directly at the bank.
Today, payments in Slovakia are connected with the application of contactless principles. According to Gáliková, the trend of cash payments is gradually decreasing, and from 2020 card or mobile payments will dominate in our country. NFC technology (Near Field Communication), enabling contactless payments using mobile phones or common items such as a ring or bracelet, has become very popular due to its speed and convenience.
O 365.bank:
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Source: www.nextech.sk
