Modern Technologies as a Channel for Providing Financial Services 4/26/2020 Introduction There are many challenges which our entire society is currently facing due to COVID-19 pandemic and those challenges have imposed need to do differently some usual activities, to understand and adapt to specific situations and information, to use knowledge to keep us and other safe, but also to continue to be productive, responsible and useful members of the community. By utilizing online communication channels, the Central Bank of Bosnia and Herzegovina continues with the financial education of citizens, which is why we have prepared several informative – educational articles, filled with, what we believe, interesting, current and useful information and pieces of advice. We hope that soon we will be able to get back together implementing activities “face to face”, in the process of learning and promoting the importance of financial literacy and financial inclusion in Bosnia and Herzegovina. Although this article was not originally planned to be the first one published, the situation with the COVID-19 virus pandemic, the measures by relevant authorities, including social distancing and movement restrictions, have put before BH citizens some new priorities and placed some of their habits “on hold”. Some of the things that have changed dramatically include the way we buy and pay for goods and services. Just to remind you – even though we have witnessed an increasing trend of electronic banking services utilization, one can say that citizens of Bosnia and Herzegovina still prefer traditional ways of interacting with banking services, such as visiting bank branches. More specifically, data on card operations published by the CBBH show that, at the end of 2019, there were just above 1. 7 million active debit cards that are connected to the citizens’ checking accounts (number of active checking accounts is 2. 1 million). In the same period, there were 719,524 citizens who had a subscription to some form of electronic payment service (e-banking or m-banking). If we take into account that the majority of banks offer packages of services and that some citizens have accounts in more than one bank, we come to the conclusion that roughly, only every third citizen who uses banking services uses some kind of electronic banking. Numbers also show that a significant number of current accounts have no debit card attached to it, which means that funds can be reached only by going to a bank branch. Usage of contactless payments without the need to go to an actual bank branch, not only represents a significant advantage in terms of time-saving, it also represents one of the ways by which we can save our health in the current situation. In the following part of this article, we will introduce you to basic channels for cashless – contactless payments. Contactless payment card It represents a simple and fast way to do a payment, which meets all security elements. Over the last couple of years, it became essential in modern retail with sellers, but also on the side of buyers, i.e. users of financial services. Having this in mind, commercial banks in Bosnia and Herzegovina have made possible issuing contactless payment cards with the goal to perform shopping without swiping or placing payment cards into POS (Point of Sale) devices. This method of payment, besides practicality and speed, also provides positive practice in the times of pandemic, as it decreases the possibility of contact and transmission of the virus. With that in mind, commercial banks in Bosnia and Herzegovina issue contactless payment cards which provide the possibility for shopping via contactless POS terminals in a way that with purchases up to 30 KM (with some brands, the amount goes to 60, or even 90 KM), it is required only to lean or even get the card close to the POS device. It is still possible to pay with amounts over that, but such payments require entering safety PIN which you have received from your bank. This way, the process of payment is accelerated and protected, while waiting time in stores is significantly reduced. You need to be aware that in order to have a contactless payments card, you need to have an open checking account in a selected commercial bank. Before you opt for a certain contract offer by the commercial bank, make sure that you obtain all detailed information on conditions for usage of offered payment cards, as well as about all fees and commissions associated. A single purchase cannot be charged again, even if you press a payment card against POS device two times or more, which provides complete payment safety. Mobile banking Development of digital technologies has shaped life of a modern man, who increasingly relies on smartphones, changing consumer habits globally. Mobile banking, or abbreviated “m-banking”, which represents part of modern digital solutions, makes possible for users of financial services to perform transactions in the country or worldwide, without need to go to the bank. Activation of this service is done by enrolling in the bank where you decided to have your checking account opened, or where you already have your checking account. Enrollment is done by signing of contract on usage of service (individually or as a part of specific service package). Application is downloaded from the Google Play App for Android users and from the App Store for the iOS users, through the link you will get from your bank via activation text message from your bank. Bank sets out minimum requirement of supported mobile device software version, on order to have application working correctly on your device. After you download the application, it takes your username and password to start it up. Your received or created username and password during your enrollment in the bank. You can change your password anytime you want. Make sure that you keep your password safe and do not share it with other people in order to prevent any possibility of misuse or unauthorized access to your account/s on your mobile device. Mobile banking provides direct access to all your accounts in any moment as well as possibility to perform payments without actually going to the bank. Usually, advantages of usage include much lower fees and commissions compared to transactions performed at the bank counter. Generally, it is a good practice to collect multiple offers and information on terms of services before you accept specific offer. You can find all those offers and commissions on commercial banks’ web sites. Other mobile banking options most often include direct communication with the bank, with the ability to obtain information on available banking products, the possibility to store payment orders in the form of templates for future payments (e.g. utility bills), review of all payments and payments in the account/s, as well as, the possibility to check instructions for payments in domestic and international payments, various tools in the form of calculators or currency conversion at the effective exchange rate of the bank... Nowadays, the benefits of mobile (but also internet banking) are obvious, as you save time and avoid needless trips, since you can make all payments from home at any time of day with your smart mobile device and available Wi-Fi or mobile internet connection. Internet banking In addition to banking on mobile phones, citizens have the opportunity to use banking services through computers. Through the website of the bank where the person has an account, the person can access electronic banking services. The bank provides the user with a token, a device used to identify users and confirm the completion of transactions. After the token is activated, a PIN is entered. The token cannot be lent to others, it is tied to each user individually. More recently, many banks have been offering a smartphone token (m-token) token rather than a physical device, further simplifying the whole process. Safety first! When using electronic banking, special attention must be paid to the security of the device. The device on which the m-banking applications are installed should not be left unattended or made available to others without supervision. It is recommended to set access control (cell phone lock) to one of the available options (PIN, password, fingerprint, or retina scan). It is not recommended to install m-banking on phones and tablets that have been hacked to unlock devices such as root (Android devices) or JailBreak (Apple devices) and where 3rd party applications are installed outside the official application stores (App Store or Google Play). The same goes for using an e-banking service on computers - it is not recommended to visit websites of unknown authors, pages that distribute pirated copies of software or multimedia content, open e-mails with attachments from unknown senders, and install pirated copies of applications or operating software system. Each of these interventions may result in the installation of malware through which your personal and financial information may be made exposed to unauthorized persons, which may result in theft of money from your account or other misuses of personal information. Most malware programs run in the background without the user's knowledge, so the loss of important data is often detected only when material damage occurs. Because of this, it is very important that you have antivirus software installed on your computer, that is regularly updated. Any theft or loss of a token or cell phone with an installed m-token or m-banking application must be reported to the bank, providing your services, thus the bank can take timely security measures. Please note that your e-banking and m-banking passwords are yours and only yours. Your commercial bank will never ask you for your password by email or phone call. The same goes for payment card details. You never send the card information to anyone by email or message. When you send someone a picture of the card, have in mind that with it, anyone can buy and pay for anything online. To avoid the potential trouble of having your card misused, it is necessary to comply with the protection measures prescribed by the card-issuing bank. For safe use of the cards, we recommend the following: the PIN of the card must be kept in a safe place and must not be shared with the third party. When entering the PIN at the ATM, cover the keyboard by hand, do not keep the PIN on paper, and do not carry the PIN and card together. When withdrawing money from an ATM, make sure that there are no strangers near you, and after the transaction, make sure you have placed both the money and the card in your wallet. When buying goods on the Internet, only buy on trusted pages. It is recommended that the website should be certified enabling the verification of its authenticity. This practically means that when you click on the padlock, in the part where you enter the web address of the page where you are shopping, you get the information about the owner of the page and the certification body; In stores or restaurants, never give a card to staff to carry it without seeing what they are doing with it. If possible, carry contactless cards in an RFID-safe or similar wallet that prevents unauthorized withdrawal of funds from the card.
