Innovations & Challenges – Insights from Croatia’s Banking Sector

Ante Odak: Croatia’s banking sector faces significant challenges due to the high number of commercial banks operating in the same market, with nearly 20 banks currently in operation. Customer experience surveys and benchmark studies indicate little differentiation between competitors in terms of traditional products. Consequently, the primary challenges include a highly competitive market, the need for technological investments in digitalization, geopolitical risks, and regulatory demands.

To address these challenges, banks must focus on providing advisory services, speeding up processes, and offering sophisticated products, particularly for institutional and large corporate clients. Customers expect simple, time-saving, and reliable solutions, such as our R-Flex FX digital platform, which is unique to the local market and automatically available to all our legal entities as part of our standard internet banking features. Continuous upgrades to internet banking, including solutions for long-distance and international clients like video identification, are also essential. Regulatory demands, such as KYC and onboarding processes, are increasing, and our efforts aim to simplify these processes for our clients by utilizing Group solutions. Simply speaking, there’s a constant need to increase competitiveness through digitization and process simplicity, while keeping clients’ needs in focus.

Ante Odak: In recent years, our CIB business area has seen remarkable improvement across all performance indicators, a trend expected to continue through 2025. This positive development is largely attributed to the close cooperation between Sales and Product teams - a collaboration which led to more adaptive and efficient sales steering and creation of products tailored to local customer needs.

With a clear focus on profitable, good-rated clients and building long-term relationships, the bank is successfully navigating through a challenging environment while remaining compliant with all regulations and credit policies.

In the field of institutional business, there’s a significant shift towards Trade Finance after Croatia joined the eurozone in 2023. The bank now offers innovative solutions like the One Stop Guarantee program and harmonized counter-guarantee wording across RBI Group. With a dedicated focus on local non-banking financial institutions, RBHR has positioned itself as a leader by offering a comprehensive range of products including Cash Management, Custody, Trade Finance, Credit Products, Capital Markets, and Investment Banking. Our Capital Markets team has recently achieved notable success by implementing and closing several large Inflation Swap transactions for institutional customers, helping them maintain stable portfolios in a high-inflation environment.

In the corporate sector, the bank envisions continued growth driven by expanding the active customer base, increasing long-term financing, and supporting new business opportunities through various campaigns and product innovations. Beyond the CIB sphere, the Capital Markets team has taken over responsibility for investment products for retail customers, creating synergy across the entire bank and leveraging product specialists’ expertise.

In short, the best is yet to come for the CIB sector. The continued collaboration between Sales and Product teams, alongside targeted industry focus and innovative financial products, sets a promising path for sustained success.

Ante Odak: In a rapidly changing financial landscape, particularly amid economic uncertainties, a structured flexible approach to decision-making is crucial. Recognizing the need for multidisciplinary skills and knowledge, we have merged Financial Institutions, Capital Markets, and Corporate into one board area to use our diverse expertise more efficiently in tackling complex challenges.

Business-relevant decisions should be guided by data and consider various crucial factors. This means ensuring a comprehensive risk management framework is in place, such as employing sophisticated hedging strategies to mitigate potential losses. Additionally, we must stay ahead of regulatory changes while increasingly incorporating sustainability (ESG) factors into our decision-making processes.

Personally, I strive to view decisions from the customer’s perspective, considering what products or advice will best help them manage their needs. To achieve this, I rely on the vast experience of my team, as well as insights from colleagues in research, RBI HO in Vienna, and the management team of RBHR. Ultimately, it’s about making decisions with a conscious mindset and honest consideration of diverse viewpoints, ensuring we remain responsive and responsible in this turbulent financial environment.

Ante Odak: The birth of my now thirteen-year-old son profoundly impacted my life. It’s truly rewarding to watch a child grow and develop. Professionally, I’ve participated in numerous seminars, traineeships, and personality development programs, all of which have shaped my career. I feel privileged to work with clients who have grown their small businesses into successful enterprises, and meeting so many people who have had such influence on me has been a great fortune. I admire mentally strong individuals who are optimistic, realistic, solution-oriented, and respectful towards themselves and others. They strive for big goals and continuous development - the same qualities I try to embody and expect from my team as well.