Introduction
In 2024, the economy was spared new external shocks but, on the other hand, global geopolitical and economic uncertainties were growing. Despite the stagnating economic activity, the economy including the macroeconomic environment was relatively stable and was reflected also on the performance of the banking sector as shown by continuously boasting high capital stability and high quality of credit portfolio , as well as high excess liquidity and sound operating results but weak demand for financing predominately by non-financial companies attributable to a low level of investment activities.
The banking sector, however, and the activities of the Bank Association carried out by the dedicated staff of the Bank Association and the representatives of banks and savings banks (its members) sitting on the Association’s committees and working bodies, was also in 2024 exposed to numerous regulatory changes – both European and national – and due to the war in Ukraine, burdened also by observance of extensive sanctions and, consequently, extremely high costs of catering to regulatory compliance, as well as to high costs of the development of the activity and management of exposure to cyber risk.
As already said, in 2024, the new national tax and related changes adopted were pushing banks’ operating expenses up, above all cost of labour, on top of other changes to legislation that raise operating expense of the banking sector such as, to mention just a few, higher statutory payments into the deposit guarantee fund and obligations arising from the regulatory framework in place for bank resolution. These changes and the unpredictability of the regulatory, legal and tax system continue to keep the Slovenian banking sector in a position that is all but competitive in comparison with most other banking sectors in the European Union.
The Bank Association continued also in 2024 to provide support to its members in all five strategic areas of activity, but as opposed to the activities dictated by the natural disasters that hit Slovenia in 2023, the focus of attention was shifted to the general public awareness, experiences and perceptions of exposure to risks of various online scams, that is, fraud – in short: of cybercrime.
The Bank Association’s cooperation with the representative bodies of the Slovenian economy continued (Chamber of Commerce and Industry of Slovenia, Chamber of Small Businesses and Crafts of Slovenia and other standing employers’ associations within the framework of the initiative ‘Economic Circle’ that comprises 15 employers’ associations), SI-CERT and the Police and the Judiciary, Institute of Macroeconomic Analysis and Development, Slovenian Surveying and Mapping Authority, Slovenian Environmental Agency and others), and also with various banking associations in other EU Member States, taking part at the same time in ever more activities carried out within the framework of the European Banking Federation.
Practically all operational objectives pencilled in the Association’s Programme of Activities for 2024 were carried out as planned alongside numerous additional activities and ad hoc duties requiring swift action mostly in connection with unexpected and too frequent changes to the legal environment.
Our activities were founded on the strategic objectives set out below also in the course of 2024:
- reputation building,
- financing the real sector, new products and green economy,
- regulation and supervision,
- digital transformation, and
- consumer protection.
Within the framework of activities geared towards reputation building, the Bank Association was consistently following the communication strategy in all its segments: from general communication to the activities related to education and training and to publishing, strived for raising the level of understanding of the role of the banking sector in financing the needs of households and economic development. From the analysis of the articles published and the statical data (positive, neutral, negative news releases), it can be said with certainty that also in 2024, the upward trend in terms of the number of professional and objective news releases published continued.
The technological development and digitalisation bring many benefits and at the same time increase exposure to risks. With the support from our members and in cooperation with an outsourced agency, the Bank Association continued in 2024 with the campaign designed to increase public awareness of cyber frauds and the ways to protect oneself against such scams through the campaign PAZI.SE and carried out numerous awareness-raising activities free of charge customised for different groups of population. Furthermore, we also published a special issue of the journal Bančni Vestnik entirely dedicated to cyber risks.
Moreover, as far as the activities of the Training Centre are concerned, all goals set for 2024 were achieved and surpassed.
In the field of retail banking operations, the activities worth mentioning refer to the preparations for the provision of better physical and digital accessibility of financial services to vulnerable groups. Some members of the Bank Association went one step further by crafting a compelling offer for socially more fragile borrowers to convert their loans denominated in Swiss Francks into loans in euros.
With regard to financing the economy and managing risks., the activities carried out in the course of 2024 were channelled inter alia towards the implementation of modifications and amendments to the regulatory requirements and taking further steps for integrating the ESG elements into various processes of banking operations and, in particular, into managing credit and liquidity risks, market risks and operational risks, managing credit collateral by means of the amended form for drafting a summary report on the appraisal of the immoveable property, conducting loan portfolio analyses, carrying out testing in emergency climate-related situations and embarking on the activities for putting in place more advanced technological support for the procedure serving to collect and analyse ESG data in cooperation with Banka Slovenije.
In the field of banking regulation and supervision coupled with legal affairs and compliance issues, the initiatives followed by proposed amendments to a myriad of legislative changes both at the European and the national level are worth noting. The number of and the speed at which regulations are changed given the inconsistencies and collisions means that the banking sector is faced with a challenge to provide for compliance both in terms of content and cost. An exceptional number of regulatory changes je and also in the future will be in the field of implementation of payment services and exchanging data and ensuring of operational resilience and cyber security. Particular attention was given to the EU AI Act, a European regulation on artificial intelligence and the use of artificial intelligence in business processes.
In the field of digital transformation/informatics, cyber security and payment services, the cooperate with the Slovenian Computer Emergency Response Team SI-CERT and the Police was strengthened.
The centre stage tasks in the field of payment services in 2024 were monitoring the progress of the volume migration from the BIPS IKP solution to the BIPS IP solution and implementation of relevant controls as set out in the anti-money laundering Directive and the important pan-European payment solution in the field of instant credit transfers and retail payments.
In the field of money and capital markets, the activities were carried out within the framework of a special working group tasked with the implementation of the strategy for the development of capital markets and implementation of the Minimum Requirement for Own Funds and Eligible Liabilities (MREL).
From among numerous important activities pursued by the Bank Association of Slovenia during the year under review, much time and energy was dedicated to collective bargaining that is, to social partnership. In 2024, a new annex with the pay grade schedule was signed. Given its one-year validity period, the procedures for opening a new round of collective bargaining with the representatives of the two trade unions were launched in the last quarter of 2024.
The Bank Association also catered for compliance of its activities with applicable regulations and recognises the need for a gradual sustainable transformation. In view of its mission, it does not have in place an official strategy or policy for the management of the environmental factor. Nevertheless, it observes in all its processes to a maximum extent feasible with its in-house activities the environmental factor and strives when making changes to its work processes to reduce consumption of energy and paper and decrease the quantity of waste and see to its adequate classification. For the purpose of organising work, also the social factors in the area of health and safety at work are taken into account, alongside the provision of adequate and friendly working conditions for employees. The members of the Bank Association have adopted a code of (ethical) conduct the member institutions of follow and the code also applies mutatis mutandi to the conduct of the employees of the Bank Association, that is, it is observed when carrying out the Association’s activities. The activities of financial education and literacy the Bank Association carries out in addition to its core activity, is performed free of charge for the benefit of the entire society.
In a nutshell, the Bank Association was also in 2024 operating in a dynamic environment and in collaboration with different stakeholders was performing its tasks in a responsive and efficient manner for which I thank you all and in particular I also thank the Bank Association’s staff, as well as all members of the committees and their working groups set up under the aegis of the Association. Many thanks also go to the providers of alternative dispute resolution.
for consumer disputes whose area of competence is becoming more complex all the time with the development of technology and higher exposure to risk of various online fraud.
I also thank the Association’s Supervisory Board for the guidance and support on the road to achieving the objectives set with the aim to provide efficient assistance to the operations of the banking sector, as well as to provide support for the changes made to the Association’s operating processes, which as a result of constantly evolving technology and regulatory news and changes in the business environment, have become an ongoing task.
mag. Stanislava Zadravec Caprirolo,
Director of the Bank Association of Slovenia