Montenegro’s membership of the European Union could intensify banking competition and put pressure on fees, while accelerating digital transformation, Erste Bank Management Board member Darko Keković said. Integration into the EU single market would make it easier for new financial institutions, payment service providers and specialist credit companies to enter, widening the choices available to customers.
In the short term, the areas most exposed to change are payments and money transfers, card services, digital channels and mobile banking. Retail and small-business lending, savings and investment products are also expected to face greater competition as new providers gain access to the market.
The shift could reduce the dominance of the domestic market and bring more fintech companies into Montenegro. Their expansion could offer customers simpler digital solutions, faster service and lower costs, particularly for payments, transfers and personal-finance management.
Digital services and fee pressure
Competition from providers offering faster and cheaper services could put pressure on banks’ charges and commissions, especially where simpler and more transparent alternatives are available. The effect could be particularly visible in revenue from fees, as customers gain more options for payments, money transfers and managing personal finances.
Digital financial services are expected to see the greatest changes. Customers will increasingly value simplicity, transaction speed and the ability to connect financial services with everyday digital platforms, with open banking offering a way to develop such connections.
For banks, stronger competition is expected to bring faster digital transformation, improved mobile and online services and simpler product approval. Banks are also likely to form partnerships with fintech companies and use open banking to create new services, rather than treating those firms solely as direct rivals.
Traditional lenders retain advantages in customer trust, regulatory compliance, access to deposits and established risk-management systems. The future relationship between banks and fintech companies is therefore expected to rely more on cooperation than direct competition, even as new providers increase pressure on existing business models.
As income from traditional fees faces competition, banks will need to develop services with greater added value. These include digital financial services, investment products, asset management and advisory services, alongside advanced solutions for corporate clients.
Success is expected to depend less on the level of individual charges and more on operational efficiency, customer experience and the ability to create innovative financial solutions. Banks will need to make it easier for customers to conduct business, invest and grow in a more competitive European market.
Competition in currency conversion is expected to be less pronounced because Montenegro uses the euro as its means of payment. That contrasts with payments, transfers and other services where digital providers can offer simpler and more transparent alternatives to traditional banking products.
European standards and bank readiness
European integration has already encouraged and accelerated changes in Montenegro’s banking sector, which is largely aligned with European standards. The process is not limited to regulation; it also affects the economy’s overall competitiveness and the ability of financial institutions to provide services across borders.
Harmonising regulation with European standards increases transparency and the resilience of financial institutions, while making cross-border financial services easier to provide. The risk-management standards, capital requirements and responsible-financing principles at Erste Group have long been developing in line with European practice.
Erste Group is the largest financial services provider in Central Europe. Its approach to responsible financing is focused on customer protection, while its standards for managing risk and capital reflect the direction of European banking practice.
SEPA and the development of instant payments are examples of practical benefits from European integration in everyday business. Together with fintech and artificial intelligence, they form part of Montenegro’s transition towards a more connected, digital and competitive European environment.
Artificial intelligence is among the technologies whose future reach is practically unpredictable, but it could affect the development of banking services. Technology is changing how services are provided, while trust, security and responsibility remain central to the financial sector.
“Technology changes how services are delivered, but trust, security and responsibility remain key values in the financial sector,” Keković said.
Erste Bank has defined an intensive continuation of its agenda for accelerated digital transformation. Customers are expected to have more choice, while continuing to select institutions they trust to manage their money responsibly and support them when it matters most.
