According to Merchant Machine, 88% of Czechs had access to the internet in 2021. Of all Czech citizens using the internet, 78% use the internet for online banking, which is 12% above the EU average. Additionally, the Czech Republic ranks 19th in the integration of digital technologies and 17th for digital public services among EU countries.
The Czech Republic falls under the PSD2 legislation; however, they also have the Payments Act, which regulates payment transactions and services. It came into force in 2018 and transposes PSD2. Therefore, they developed the Czech Standard for Open Banking (COBS), which is supervised by the Czech Banking Association. PSD2 is a European Directive that regulates electronic payment services and was implemented in all EEA countries in 2016 and went live in September 2019.
In their European Open Banking league, Yapily scored the Czech Republic 3.5 out of 10 as Open Banking is seen as a very low priority for regulators, and there is no guidance around implementation. However, there is no independent implementation body, such as OBIE (The Open Banking Implementation Entity) in the UK, to standardise technical requirements and consumer journeys. Establishing this kind of entity would ensure that all industry participants are aware of the direction of the ecosystem. Any other approach would be too slow to deliver considerable benefits within a reasonable timeframe.
The EU Commission has announced its intention to adopt an Open Finance regulatory framework.
According to The Global Findex Database, 95% of Czechs had bank accounts in 2021, leaving 16% unbanked.
18% of the Czech banking customers indicated they would be comfortable with sharing their account information with another bank in exchange for innovative online services making the Czech Republic the most conservative country in the Central and Eastern Europe region, where an average was 35% in 2018. The average consumer awareness about Open Banking and its benefits remains low across all CEE countries. Willingness to share data with non-banking entities is even lower, with Fintechs having the lowest confidence among customers. However, in a more recent study researching the Open Banking adoption among consumers, 30% of Czech consumers were interested in receiving intelligent assistance to manage payments.
Czech users were found to be most willing to share their bank account data in exchange for a personalised offer, for example, a loan, if this positively affected the cost of a product or service, such as credit score.
The main strategies that steer the digital transformation of the Czech economy and society are Digitální Česko (Digital Czechia) and the innovation strategy, which both aim towards a coordinated and comprehensive digitalisation of the Czech Republic.
According to Yapily, Open Banking is seen as a very low priority for regulators, and there is no guidance around implementation. Establishing independent implementation body, such as OBIE (The Open Banking Implementation Entity) in the UK, to standardise technical requirements and consumer journeys would ensure that all industry participants are aware of the direction of the ecosystem. Any other approach would be too slow to deliver considerable benefits within a reasonable timeframe.
The Czech financial services market is highly competitive, and there are 276 Fintech startups in the Czech Republic. Fintech innovations have had an impact on almost every area of the financial sector, from payment systems, peer-to-peer lending, insurance, food vouchers and investments. In the future, the country’s innovation strategy aims to match the Digital Europe program in co-financing the digital innovation hubs that help to introduce digital technologies in factories as well as businesses.
The Czech Republic ranks 15th in human capital among EU countries in the Digital Economy and Society Index (DESI) 2022. The human capital measures digital skills, the proportion of employed people working as ICT specialists, female ICT specialists, and enterprises offering ICT training.
The Czech National Bank (CNB) has established a new specialised communication channel to receive Fintech-related enquiries from all financial market participants – the Fintech contact point, which aims to promote the introduction of innovative technologies on the Czech financial market through more active communication with incumbent institutions and potential new entrants. The CNB is not currently planning to establish an innovation hub or a regulatory sandbox.
While the Czech Republic is part of the EU, the Payment Act transposes the PSD2 and they have developed their unique standard – Czech Standard for Open Banking (COBS).