Report: CEE Taking Digital Path to Prosperity

Highlights of the report:

  • The fastest convergence of the CEE is happening in digitalisation; the lag for this can be measured in a couple of years, rather than decades.
  • Digital Infrastructure is relatively well developed, while CEE is not fully reaping the benefits of digitalisation, especially in eGovernment services.
  • Well-functioning eGovernment service could bring huge positive externalities to society and contribute to the prosperity of CEE countries.

Download the full report here:

CEE taking digital path to prosperity_Erste Group Research_22 June 2017-Report


Report: CEE Region Undergoes Fast Digitilisation

Erste Group’s latest report has revealed that The Central and Eastern European (CEE) region is close to Western Europe’s level of digitalization.

Although the region fares well in terms of digital infrastructure, lack of digital public services is a major drawback for many countries, the report shows. However, countries can develop eGovernment services by building on their own digital infrastructure.

Although the level of digitalization and online access is almost on par with that of Western Europe, the CEE countries’ average GDP per capita in absolute terms is at the level seen in Western Europe in the mid-1980s and investment in areas requiring a lot of physical capital (such as road infrastructure) is taking much longer.

The report’s authors recommend more financial incentives for developing CEE workers’ digital skills and more investment in ICT solutions by CEE businesses.

When it comes to digitalization, CEE countries have made important progress in catching up with Western Europe. The gap for household internet access between the two regions is only four years and when it comes to mobile broadband access, the gap is only two years.

Furthermore, mainly low online reach into rural areas make contribute to the differences in digitalization between Eastern and Western Europe. When it comes to the urban environment, both regions have an almost identical level of internet and mobile broadband access.

Finally, Erste’s report highlights that there is still room for improvement, especially when it comes to the digitalization of public services. Few CEE countries (with the exception of Slovenia and Slovakia) have taken active steps in developing an eGovernment platform.

Juniper: Retailers May Lose USD 71 Billion in CNP Fraud

A new report by Juniper Research has found that retailers are in danger of losing USD 71 billion from CNP (Card-Not-Present) fraud by 2022.

The Online Payment Fraud: Emerging Threats, Key Vertical Strategies & Market Forecasts 2017-2022 report found that merchants do not invest enough in preventing online fraud, saying that the costs are too high. Because of this, many are not prepared to deal with online fraud following the introduction of EMV (chip and signature) payment cards in the US.

The analysis, however, points out that most merchants will receive value for their investment. Consequently, Juniper Research believes that extra effort is needed in educating merchants on the benefits of FDP (fraud detection and prevention).

The research points out that CNP physical goods sales are especially vulnerable to fraud, where loses will reach USD 14.8 billion annually in 2022. In spite of these figures, retailers are unwilling to impose rigorous ID checks on pick-up, fearing that this practice would damage the consumer experience and affect conversion rates.

Finally, the research argues that machine learning will be a key tool in identifying genuine users and combating fraud in 2018. At the same time, the ecommerce market will rely on 3DS 2.0 and biometrics.

Banks Warned Over Misuse of Personal Information

Businesses including banks and financial services institutions must build public confidence in their ability to store and protect Australian citizens’ personal information, according to the latest Unisys Security Index.

The research found that 58 per cent of Australians are extremely or very concerned about unauthorised access to or misuse of personal information, while a further 55 per cent are extremely or very concerned about other people obtaining or using their credit/debit card details.

The Unisys Security Index is a global study that measures the attitudes of Australians on a wide range of issues related to national, personal, financial and Internet security, and showed that many consumers are still concerned over identity and financial theft.

“In an era where data breaches have become part of the daily news cycle, consumer confidence in the ability of organisations, including banks and retail businesses, to protect their personal and financial data has eroded away,” says John Kendall, director for national and border security programs, Unisys.

UK experience

Research indertaken by RFi Group based on the UK experience of open banking found almost 60 per cent of UK consumers agreed that their privacy was more important to them than accessing better products and services.

“Here the banks have an advantage; on any given Sunday a consumer trusts their bank to hold and maintain the privacy and security of their personal information better than any other organisation,” RFi Group managing director of consulting Alan Shields said.

Closer to home, RFi Group research found that Australian banks are the most trusted institutions in terms of data security and privacy regardless of age – with banks outranking technology and even government agencies when it came to trust and privacy issues.

Shields acknowledged that banks with foresight are already preparing to operate in an open banking environment, with open APIs.

“On the consumer front, if we solve privacy and security concerns, then account aggregation is clearly an attractive driver of consent among younger consumers and it is here that the banks must carefully choose their positioning,” he said.

Data breach

However, there are plenty of examples of companies getting it wrong and less than 12 months ago Australia recorded its largest ever data breach when the Red Cross Blood Service lost over half a million personal and medical files of Australian citizens.

“High-profile security breaches have rattled the Australian public and highlighted the vulnerabilities in business implemented technology. Security breaches don’t just impact an organisation’s ability to deliver services, the negative repercussions of a data breach can change the way customers think about or trust the business,” added Kendall.

Previous Unisys research from 2011 revealed 85 per cent of Australians said that they would stop dealing with an organisation if their data was compromised.

“Banks, retailers and governments wanting to move more of their transactions online can use innovative security measures, such as multi-factor identification or biometric technology, as a point of difference and position themselves as safe organisations to do business with and regain consumer trust,” concluded Kendall.