Abhishek Balaria (Zentity): Czech mobile banking is on the cutting edge. The chatbot evolution is coming – ENGLISH TRANSLATION


Source: Lupa.cz, http://www.lupa.cz/clanky/abhishek-balaria-zentity-cesko-je-v-mobilnim-bankovnictvi-na-spici-prichazi-evoluce-chatbotu/

Author: Jan Sedlák


Banks are getting interested in chatbot and other technological innovations. At least those abroad, says the head of the Czech firm Zentity.

The Czech company Zentity creates mobile applications and IT systems in the background for large banking and telecommunications clients. In the interview for Lupa, it’s CEO Abhishek Balaria is talking about strong growth of employees, revenue and abroad. The company is preparing for things like chatbot, artificial intelligence, PSD2 etc. These things could have a significant impact on mobile banking.

About a year ago you mentioned that Zentity generates about half of the revenues from abroad. How does this expansion continue?

Most of the growth came from abroad this year. We have got into new countries, especially in the Balkans. We do projects in South Africa, Qatar, Europe, Switzerland. We grow strongly each year but the biggest part is from abroad. When you add the Czech Republic and Slovakia, foreign countries constitute a bigger proportion. For a long time, we had Slovakia as a separate market but today we perceive it as one Czech-Slovak market. Our activities in Slovakia have also grown a lot, it is about a third of the Czech market but the potential is even greater. So we continue in the growth, we are doing well especially in large banking and telecommunications groups. When we do something in one country there is tendency to replicate to others.

So largely you get to abroad and to headquarters through the local branches?

Yes, through the Czech and Slovak branch, then to headquarters and new countries. It is a strategy that is very rational from our point of view – we are perceived by the customer as a known and proven player, not as a completely unknown company which still has to build relationships. We are continuing in our successes somewhere else. This gives us a much lower sales and pre-sales costs. Actually we also employ people in foreign markets. A nice example is Hungary. Last year we won a project there, we have successfully delivered it and then we have established a branch there and employ local people.

Do references work the best when starting new businesses?

Yes, it is almost always like that. Currently Gartner has started to help us a little. This year we managed to get into the three reports, we had a good profile. And CIOs in large companies read these documents. With that you can build a presence. Gartner analysts also mention us in their interviews and analysis calls. It is a good tool for expansion. What we don‘t do is to hire salesmen on local markets and try to reach customers through their contacts. Currently our expansion strategy works well.


Do Gartner, IDC, Forrester Research etc. still have such a big influence in the IT enterprise?

Definitely. For us it has two effects and meanings. It helps to build a reputation, customers must perceive that we are mature, the market is aware of you. And then it is something that is global. We often receive e-mails from big banks with requests to send information, to show the demo, make a call.

Do you have to pay for that to Gartner?

We do not, it’s a matter of a particular analyst. There is briefing with Gartner, then there is some discussion to prepare a roadmap, strategy and so on. You build a relationships. Gartner has various products so we buy their research, we had a booth at the Gartner Symposium in Barcelona and the like. Of course you have to invest in that. It’s called “Analysts Relations”, it is bidirectional.

What type of branch is the one in Hungary?

There are programmers.

So also no sales. It is not common for companies to grow abroad the way you grow.

We were also quite surprised. When we talked to big customers like Vodafone Group, Raiffeisen Group, KBC Group, they say this is really rare to cooperate with a company in this way. Because it is a little risky for them as well. Local branches want to have their autonomy, local solutions and not to push anything somewhere up to the headquarter.

How do you plan to grow abroad in the future? Are you going to open just development or sales branches?

Both. Next year we want to open a branch in Switzerland and it will be a combination of both. Of course we want to keep the main part of the development in the Czech Republic but we have planned a joint-venture in Switzerland. We operate in Switzerland for a long time and we decided that this will be our next step. We are not so much active in that region and it is a mistake because it’s around the corner. We need to expand effectively, no hiring call centers and the like. Business activities must be targeted. In fact we are very efficient, our conversion ratio is more than 70 percent. We filter and reject a lot of things. There are a lot of opportunities, it is necessary to choose wisely.

Are you interested in Switzerland and the neighbourhood because it is a major center of banking and financial institutions?

Yes. There are a lot of banks.

Are you interested in going to London as a world financial center?

We tried to. It was never a problem to make appointments in big houses like Barclays, in various digital laboratories of those banks and so on. But it always ended in nothing, follow-ups didn’t come. This does not work for us and it relates to what I said earlier. Everything we do must be targeted. If a bank sees that in any country it’s mobile banking failed and that there is a good solution in the Czech Republic, then you are there. The business must be synchronized with activities that banks deal with at the moment. Otherwise, you are wasting a lot of time and resources.

If you compare mobile banking in the Czech Republic with the world, how are we doing? Beside the fact that we are a small market, rather how it works and how we stand technologically?

We are among the top ones. In technology, security, speed of delivery, functionality, UX, in all aspects. There is no reason not to be. I would even say that the Czech Republic belongs to the absolute best.

Why is it like that?

It is like that in technology areas in general. For example Alza. In my opinion it is better than Amazon in many areas. Here there is a technological basis, let’s say a “mindset”. And in my opinion it will be even better.

Do foreign customers perceive the Czech Republic as a technological brand?

It depends. For the majority we are still unknown, we need to work on that. But there are markets where they know it. For example, in Switzerland. I was very surprised when we first came there. They told us that everything must be “Swiss quality”, otherwise we have no chance. It was difficult to get started. But they also said that they perceive the Czech Republic as a technical quality, mature and high-quality land. Apparently it is also related to the fact that in the past when people emigrated from the Czech Republic, they also went to Switzerland, where they integrated quickly and made a good impression there.

Do you meet some other Czech companies, competitors abroad?

We don’t. We have just defeated a company from Chicago in a tender, in the Middle East we meet more Asian companies, local enterprises in Ireland, French companies in Switzerland and so on.

Why do you need to have developers abroad? Do you need to have IT people closer to clients?

You must be able to operate in the local language. For example in Hungary, you can write some specifications etc. in English but you have a much greater chance of success when it is done by the local people. That is one thing. And the second thing is that there is generally a big demand for IT people. Developers have rich years now. We see that we will have to hire more people in Budapest.

Is the domestic market with developers overheating ?

We don’t have any problem to find people. This year we have grown by about 30 to 40 percent in employees. But certainly, the trend of development centers is common. To build long-term functioning team is definitely difficult. People must stay even if they get an offer higher by five, ten percent. We will not change our approach but we follow the market wage environment. People today also appreciate what they are doing and so on. Some pool tables are already passé. That is the minimum standard that everybody offers.

I remember when we started recruiting developers in Budapest last year. I talked with people from LinkedIn where I have some contacts and they told me that there is the ratio of 1:7 in Budapest – seven job offers per candidate. That is a huge number. It would not surprise me if it was 1: 2, 1: 3, something like that in the Czech Republic. However, it is possible to operate here, there are enough people.

How many employees do you have?

Over one hundred. We still consider ourselves as a small company. If you want to be a player in our business you have to have some scale. When you are in a foreign market they are interested how big you are, how many people you have, how you grow, what your references and certificates are and so on. It’s part of the whole image.


Do you want to become a large company or is there a ceiling?

Our aim was always to be a leader in the field. We define it as digital banking or digital solutions for large corporations. We will continue to invest to machine learning and innovations. We do not have a specific goal as a number of people or turnover. But we want to be among the firms that lead the market. Now we have an interesting size and I think it will continue to grow.

What is your annual revenue?

This year we grew by 45 percent. The sales have exceeded 100 million crowns. The chart is consistent.

Are you going to keep this pace for another year?

In 2017 definitely yes. This is perhaps the first time I say something like that, usually I don’t predict. Our year 2017 is already but basically sold. This year we have added five banking groups to the portfolio. Earlier this took us two or three years, now it’s a matter of months. Mobility is getting from the initial phase to the phase of the actual deployment. Mobility becomes the primary channel for companies, it is not being hastily stitched together as before. The market is being consolidated as well, the players are being filtered. This process will continue at least until 2018.

PSD2 is now expected in electronic banking when banks will have to open their API . What will that do with the market?

There are very interesting ideas and projects that are waiting to PSD2 in FINTECH segment. Most of the subjects want the data which they will gain, they can do further analysis etc. with the data. But nobody still haven’t come with a proper business model. I don’t think there is one, for banks. There are a couple of areas where it is possible to use PSD2 – payments, financial analysis, P2P and so on.

I think PSD2 can have similar importance as the portable telephone number in the mobile segment. Payments will be more simplified, there will be no middlemen. Technologically, it’s a very interesting thing, there are a lot of ideas but business models are still missing. There are banks that already provide and nobody has invented anything much. The interesting thing could be if banks become identity providers – “know your customer” and so on. That could be a “game changer”. For example when you have an e-shop, through a single SDK you integrate payment and identity. PSD2 is the “enabler” of new things.

Do you perceive that banks and financial institutions began to devote blockchain or it is still at a level of discussions at conferences?

Blockchain has certainly an interesting deployment. It will have a chance for success. But so far it is PR. Usually a bank finds a startup that deals with something like this and they make a proof-of-concept and then most of it end up as a press release. It is similar like it was with a various mobile payments or Google Glass. I saw a video where rich guy was sitting in the car and looking for an ATM on the Google Glass. Where is the logic (laughs)? But it was very well prepared.

In what innovations you want to invest the most?

Our R&D must be strengthened. There are innovations like chatbot or machine learning, artificial intelligence. Today it is common to communicate via a touch screen or PC but there comes a voice communication. This is a potential evolution.

Are you actually talking with your bank customers about having a chatbot for example in Facebook Messenger that could communicate with people?

Yes. Or iMessage. It is still in R&D but it is in our roadmap.

So it would work like I add a chatbot of my bank to my Messenger, then I write him “send five thousand to my wife” and he’ll do it?

Exactly. This is how we will interact with help of technology, not only with banks. Whether it can replace the interaction that we have today is not certain. Technologically it is not a problem. It’s a matter of two years. The question is whether it will be the main or the only way of interaction. I do not know if people accept it. Certainly the main role will play the younger generation. They are used to it, it will be a natural way for them.

They have the app WeChat in China, you can do there almost everything, it is not even necessary to leave it. Do you think it can be applicable in the West or it is just a wish of Mark Zuckerberg?

As I said, technologically it is possible. It is a matter of two years before the error rate will be reduced to an acceptable level. But of course there are other habits as well as historical development, penetration of smart devices and so on. Previously Europe totally ruled GSM mobile communication, while America had historically a high penetration of computers, dial-up and so on. But in general this is the way in our core business. Which does not exclude coming of something new.

Do you talk about chatbots etc. with Czech banks?


With whom?

With ours (laughs).

Are you working with prepared technologies like Microsoft Bot Framework?

Yes, things like Azure Machine Learning, TensorFlow and the like. We have no ambition to invent alternatives, we build our own things over them. We already have the first specific and interesting projects around computer vision using mobiles. We will also invest more there.

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