Teamwork can help in realising even the most ambitious plans

Dr Koppány Tibor Lélfai

Chairman & CEO, Budapest Bank Zrt.

In the history of Budapest Bank and the entire Hungarian banking sector the introduction of the instant payment system has undoubtedly been the most complex and difficult task, requiring the highest levels of discipline. On 2 March 2020, we completed a project lasting about 2.5 years, although this does not mean that the tasks related to the system have all been completed. The rollout enabled 24/7 operating times for electronic transfers, therefore we can rightly claim that the system has a major impact on several walks of everyday life and it will continue to do so thanks to the increasing number of additional services built on it.

Owing to the digital services that have been widely adopted in recent years, it has become clear that bank customers increasingly demand solutions that are fast, simple, do not require personal presence and sometimes are not even tied to operating hours. In the banking sector, new solutions appear from time to time that fundamentally change our payment habits. The instant payment system stands out even among these. All stakeholders knew that this new payment solution would have a very positive effect on the customer experience and play a central role in reducing cash payments, therefore despite the great challenges of the project, the advantages clearly tipped the scales towards introduction.

Bank experts had already known instant payments from other schemes already operating in some countries, but the foreign examples often did not involve such an ambitious project as the introduction in Hungary. The planned go-live was preceded by an effective preparatory

period, so it was known in advance that an established system would be introduced that passed live tests and was operating reliably.

At Budapest Bank, over 100 employees worked on this project, including IT experts, project managers and business areas. The other very important factor was that practically consortium level cooperation had to be established: we collaborated with Takarékinfo, our key supplier, and also with MKB and Takarékbank to deliver a common system in which Budapest Bank’s systems were integrated. The significance of the project is also attested by the fact that the Magyar Nemzeti Bank devoted more attention than ever before to the process of system development, so they always knew exactly how the banks progressed with the preparations.

In connection with instant payments, two things were obvious: first, that there would always be problems with systems like that, and that the closer we would get to the rollout, the more problems would arise. But we also knew that we had a highly dedicated and professional team, so we were sure that we would solve everything by the deadline.

The long months prior to the launch required great discipline from my colleagues working on the project, since the MNB’s test run requirements were understandably high. During the live testing, errors kept cropping up from time to time, and solutions had to be found quickly, creatively and flexibly. The workers of Budapest Bank and the other banks joined forces to eliminate these as soon as possible. At Budapest Bank, during the live test run of the pilot operation robots simulated the customers, whose actions, together with the systems conducting live instant credit transfers, were monitored by our colleagues around the clock. This required massive efforts, but it was necessary for success. Something that was truly helpful was the culture of cooperation characteristic of Budapest Bank and I am especially proud that our performance stood out within the consortium.

I did not sleep too well on the night of 1 March 2020. I was eager to test the system myself. All my colleagues were relieved when we were testing the transactions one minute after midnight, and everything worked smoothly like clockwork. Everyone kept sending transactions of HUF 1–100 to try out the service. It was a once in a lifetime experience that we will always remember.

We rearranged one of the larger rooms in our office building so that our colleagues from the various areas working on the project could keep watch during the weekend before the go-live and for 72 hours after that on site. We were able to tackle several minor issues quickly and effectively and fortunately there were no critical incidents. This was a huge

relief. In the first 72 hours of the transition about 150 employees were working in shifts during which roughly 40 family-size pizzas, three shopping trolleys of soft drinks and snacks and huge amounts of coffee ensured that the people would ‘survive’ this period.

Naturally, the work did not end after the 72 hours following the go-live passed, because instant credit transfers have to be executed on a 24/7/365 basis. Making this work presented a considerable challenge to the whole banking system with respect to IT solutions and human labour as well. To provide 24/7 access, several developments had to be completed in our account management systems, the fault tolerance of the IT solutions had to be increased and the on-call IT duty had to be reorganised. A new position was created at the bank to manage these and the colleagues working in this role were tasked with eliminating the errors in the instant credit transfers as soon as possible.

The introduction of the instant payment system is another success story for Budapest Bank we can all be rightfully proud of: the system was successfully launched as planned. Also, the go-live was well-timed by chance, as it happened a couple of weeks before the coronavirus pandemic hit Hungary, allowing customers to familiarise themselves and get used to the operation of the new system that oiled the wheels of electronic payments exceptionally well while the conditions were still calm. Thanks to the preparedness of Hungarian banks, the IPS has been stable since its launch, operating reliably without any major incidents. Customers welcomed it; they have shown steadily increasing confidence in transferring money outside the usual weekday time slots.

Instant payment is a huge achievement: the fact that today credit transfers are executed in five seconds represents a resounding success for the Hungarian banking system, impressive even by international standards. From the perspective of customer experience, it is very important that customers can send their money to the other party in real time, the amounts are also received immediately. Another accomplishment is that secondary identifiers have also been introduced, therefore for example mobile numbers and email addresses can also be used instead of the long bank account numbers that are difficult to remember; the request-to-pay service will also be increasingly available in the near future.

This project has moved our customers and our banks closer to a fully online a cashless society. This is a major opportunity to the bank and a huge challenge to our IT team, because this system has to be operated on a 24/7/365 basis. I believe that the introduction of the instant payment system is an achievement that not only we but also our children and grandchildren can be proud of. This system will still function in 10–20 years, and although

people will take it for granted, the developments built on it will fundamentally change the payment habits of our descendants.

Numerous new services can be built on the instant payment system in the next few years. First, Hungarian banks are now launching their request-to-pay service and the scope of secondary identifiers will also definitely expand, which may open up new, exciting areas in this field.

Instant payments can have a positive effect on e-commerce and the reduction of cashon-delivery payments, since most market experts believe that this offers a more secure payment solution than bank cards, which is all the more important because in Hungary many people are still loath to share their bank card details when purchasing online.

The solution will increasingly be used in truly real-time payment situations, including in shops, at the hairdressers or at the covered markets. Merchants’ applications will also have to be designed for these. The introduction of QR codes will also be important in this connection, and that is typical of the exciting developments where there are positive foreign examples.

Raising awareness among customers is key in the adoption of new solutions. This was clearly made easier by the Magyar Nemzeti Bank’s campaign, just like the intensive and efficient customer information drives of the banks, including those of Budapest Bank. Mobile phone penetration in Hungary is sufficient for the widespread adoption of instant payments and the related payment solutions, but we can still see that the share of people using banks’ mobile applications is still much lower than those using online banking or card payment solutions. Nevertheless, we expect that this proportion will surge in the future thanks to instant payments.