SELVİ HANİŞOĞLU GÜLAY,AKMAN HÜSEYİN VEDAT (2020). Digitilization in the Turkish Banking Sector and COVID-19. Uluslararası Çağdaş Bilimsel Çalışmalar Kongresi (Özet Bildiri/Sözlü Sunum)

1. DIGITALIZATION IN THE TURKISH
BANKING SECTOR AND COVID 19
Gülay SELVİ HANİŞOĞLU
Vedat AKMAN
TOKYO SUMMIT-II
2nd International Conference on Innovative
Studies of Contemporary Sciences
August 17-19, 2020, Tokyo, JAPAN

2. INTRODUCTION
 Banks are dominant institutions in the Turkish financial sytem.
 Share of banks in the total financial system around 81% as end of 2019.
 Banking sector is one of the most technology intensive sector
 Digitalization in the banking sector firstly transformed retail banking sector.
 Products for retail customers have diversified and most of the products have become ready
from on-line channels.
 Automated Teller Machines (ATM)’s were the leading innovation on the area of digitalization
of banking sector. credit cards, debit cards, telephone banking, internet banking, on-line credit
application alternatives have come into banking area after shortly.
 Most of the services which were offered in physical enviroments and with face to face contacts
have started to provide electronically and have offered from digital channels.

3. DIGITILIZATION ON TURKISH BANKING SECTOR
 Digitalization helped to banking sector for improving their service quaity shortening the
respond times and also helped for decreasing transaction costs of banking sector.
 As digitalization and automation started to be used extensively in the banking sector, the
need for the face-to-face relationships and banking service or products which have offered
depending on a particular location have decreased.
 Rules and regulations regarding digital banking sector have been adopted.

4. COVID 19 PANDEMIC AND TURKISH
BANKING SECTOR
 When the world faced with covid-19 pandemic crises at the end of 2019 and first effects
have observed in Turkey on March 2020, like most of the other sectors banking sector also
have adopted themselves to these unusual and unexpected situation.
 Banking sector with comparing the other services sector have been tackling better with
these extraordinary situation.
 The existence of products, proceses which have been digitalized is one of the most
important factors in the Turkish banking sector’s adaptation to the Covid-19 process in a
short time.

5. COVID 19 PANDEMIC AND TURKISH
BANKING SECTOR
 Banking sector digitilization level in Turkey was helpful for the measurment taken against Covid-
19 by the governments and Health Minister.
 At the begining of the epidemic era, for decreasing negative effect of global epidemic,
measurements have been taken by authorities and banking sector.
 Before analyzing the measurments taken by authorities, we should firstly analyze the service and
products of banking sector which is eased adoption of daily life to the epidemic process.
 During the epidemic period, the most important thing is to reduce human contact. People can open
accounts, deposit and withdraw money via ATM’s (Automated Teller Machines), internet banking,
telephone banking or other mobile banking channels without going to the bank.
 Utilities payments can be done through online banking sytems.
 Also retail, commercial and corporate bank customers can get loans from banks without actually
going to the bank or make their loan principal and installment payments to banks.

6. COVID 19 PANDEMIC AND TURKISH
BANKING SECTOR
 All these online channels like telephone banking, ATM’s, internet banking, and mobile
banking have made easier the management of pandemic times.
 Credit cards are also very important for shopping.
 Banks also have added new features to their existing products or some previosly developed
features have become more widely used.
 Some banks made agrement for disinfecting paper money in the ATM’s.
 Banks also increase daily money withdrawal limits and suggest their customers to use QR
Qodes instead of typing physically their passwords. QR and contacless limits banks have
been increased. Banks advised their customers to use contactless and QR code based
payment options during their shopping.

7. COVID 19 PANDEMIC AND TURKISH
BANKING SECTOR
 In order to increase the use of digital services, banks have taken additional measures such
as lowering the withdrawal fees and increasing limits on mobile money transactions.
 While in quaratine period and sociol distancing limitations digital payments systems allow
people to access banking services in Turkey.
 And due to smootly working digital payments, Turkish Banking System and Turkish
economy have been running effectively.

8. COVID 19 PANDEMIC AND TURKISH
BANKING SECTOR
 While the Banks in Turkey provide significant part of their products to their customer in
the digital platforms, many bank employees have continue to work in the bank premises.
Personnel numbers who provide call center services in the banks have been increased for
shortening the response time to their customers. For keeping safe their employees bank
buildings have been disinfected, most of the meetings have moved on line platforms,
employee shifts programs have been applied. Most of the banks have applied plexiglass
separators ensuring social distances between customers and their employees.

9.
MEASURES TAKEN BY THE REGULATORY
AUTHORITIES
 Regulatory Authorities in Turkey have impact several measures in order to mitigate negative effect of
Covid-19 period. Regulatory Authorities have taken steps to provide flexibility to financial institutions and
to maintain financial stability in the economy.
 Banking Regulation And Supervision Agency.(BRSA) has made changes regarding non- performing loan
classifications at the same time BRSA has extended the ratio of loan amont to the mortgage amount to 90 %
for the house acqusition loans. Another set of measures which has been taken by BRSA is related with
minumum liqudity adequacy and coverage ratio. The aims of these steps which is taken by BRSA is
providing flexibility to Banks

10. MEASURES TAKEN BY THE
REGULATORY AUTHORITIES
 Central Bank also took several steps and reduced one-week repo auction rate for the
purpose of sustaining regular cash flow to the Turkish financial markets and take additional
steps for increasing the flexibility in the liquidity management
 The Banks Association of Turkey (BAT) has announced several practices for tackling the
effects of Covid-19 in the financial markets. Cheque Payment Support Credit has begun
to be provided by some banks in order to the cheques which are issued and to be
issued by the corporate and commercial customers based on the real commercial
activities to be paid. Apart from this, some banks started to provide “Economic Stability
Shield Credit Support” for the working capital needs of corporate and commercial
customers, especially the SMEs

11. CONCLUSION
 Covid-19 pandemic have different kind of effects all our lives, at the same time it could be
have affects also rules of the financial system. Households and companies can benefit
more from digital services and financial technologies.
 Sociol distancing have managed by the banking sector services due to digitilization level
of banking sector and covid-19 period has accelarate to use of digital financial services.
 The pandemic shows that the digitalization trend in the Turkish Banking sector and other
financial services is going to accelarate.
 Banking sector should take account several risks like unsufficient customer protection,
unsufficient data protection and security.
 After Covid-19 Turkish Banking system will likely be more digitized.