No. 36 July 2020 Bankieri Publication AAB MEMBERS www.aab.al

CONTENT Editorial From lockdown to open up: the road to confidence Prof. Asoc. Dr. Elvin MEKA 5 Bankieri No. 36, July 2020 Frontline Publication of Albanian Association of Banks Challenges for entrepreneurship and government support, during COVID-19 pandemic Eduard SHALSI, Minister 6 Monetary policy as a monetary control and economic stabilization instrument Erald THEMELI 8 Banks striving for a strong growth and recovery Bankieri Burçak INEL 11 COVID 19 – The Open Up Dr. Spiro BRUMBULLI 13 Banks in front of COVID-19 16 Intervista AFSA – A new management for actual and incoming challenges Ervin METE 24

Banking System Banking of the future: challenges, vision and strategies Prof.Dr.Adrian CIVICI 26 Automatic Exchange of Information What does it mean for Albanian and the Albanian banks Enkelejda TOTO 29 ICT – a key element of success in overcoming the Covid-19 pandemic situation Alketa LAMÇE 31 Internal Audit Challenges, during Covid-19 crisis Dorida STAMBOLLA 33

Experts's Forum Beyond Covid –19: New opportunities for the Albanian FinTech-sector Jonida KËLLEZI 36 Trainings – challenges and opportunities during pandemics EDITORIAL TEAM: Junida TAFAJ 39

Elvin Meka Social Development Goals 40 Editor-in-Chief Eftali Peçi AAB: Activities - Trainings 44 Coordinator Dorina Zarka Photographer Design & Layout: FCB Afirma

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Bankieri is the official publication of EDITORIAL BOARD: the Albanian Association of Banks which mainly focuses on the Albanian Silvio PEDRAZZI Georgios PAPANASTASIOU Adrian CIVICI AAB Chairman & CEO AAB Executive Committee Dean, Faculty of banking industry. Bankieri provides of Intesa Sanpaolo Bank Member & CEO Economics, Mediteranean readers with valuable information on Albania of Alpha Bank Albania University of Albania the financial industry's developments in general, and of commercial banks Maltin KORKUTI Dritan MUSTAFA Eleonora OLLI AAB Executive Committee AAB Executive Committee Chairman of Albanian in particular. Member & CEO Member & CEO of Tirana Institute of Authorized of Credins Bank Bank Chartered Auditors (IEKA) ALBANIAN ASSOCIATION OF BANKS Street "Ibrahim Rugova" Andi BALLTA Ervin METE Spiro BRUMBULLI AAB Executive Committee General Executive Director Secretary General, SKY TOWER, 9/3, Tirana Member & CEO of Albanian Financial Albanian Association of Tel: ‘+355 4 2280371/2 of American Bank Supervision Authority Banks Fax: +355 4 2280 359 of Investments www.aab.al

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4 Bankieri July 2020 www.aab.al EDITORIAL From lockdown to open up: the road to confidence The government, regulatory authorities, academia and business leaders must shore up confidence to the future, although it will be a hilly bumpy road; they must hurry up to adapt and remodel the economy by way of employing new business models and structure, improving productivity, developing new products, attracting talents, using technology massively, etc.

unbelievable similar path towards This is the most remarkable economic abyss. After many weeks challenge, out of the whole set of struggle the economy began to of challenges, for policymakers, open up, slowly but steadily, and regulators and financial unsurprisingly we all witnessed institutions, banks included, as the what we had in mind: the economy last financial and economic crises is suffering quite a lot, and the road are not a relevant lesson for the to normality, would be long and future. painful, as the economic cost of the However, for the future to Covid-19 crisis is unprecedented, come, the banking sector and both globally and domestically. The the financial industry shall try to Albanian Government and Bank of adapt to such set of challenges, Albania took very quick and serious from the increase of government steps to halt the economic and debt, recession, lower income Prof. Asoc. Dr. Elvin MEKA1 financial collapse, by taking proper and spending, lack of business Editor-in-Chief measures, like: two financial and households’ confidence to packages and sovereign guarantee take risk and invest, along with schemes, loan repayment holiday bolstering private expenditures, COVID-19 pandemic outbreak for bank clients, liquidity supporting and the unavoidably reshape of the caught the whole world almost off- measures, accommodative work and the workplace. One thing guard, although upsetting news monetary policy, relaxing risk is clear: Nothing will ever be the form China were on display, since management measures for the same again! So, the government, January. Surely, the health safety banking system, etc. regulatory authorities, academia was of paramount importance and Fortunately, the banking system and business leaders must shore up in this way, nearly all Europe, and in Albania, as everywhere, faced confidence to the future, although it naturally Albania, went into a rapid the pandemic well-prepared, in will be a hilly bumpy road; they must lockdown. Initially, the social and terms of capitalization and liquidity, hurry up to adapt and remodel the economic lockdown put reins on so they weathered successfully economy, by way of employing new the coronavirus mass spreading, the first shockwave of pandemic, business models and structure, thus mitigating the pressure on the supported by proper measures improving productivity, developing health system, but soon the health from government and BoA, too. So new products, attracting talents, emergency met another more far, the measures have prevented using technology massively, etc. complex emergency: the economic the long-term economic damage Practically, we all need to recall hibernate and the risk of economy’s and debacle and ensured the and implement what US President collapse. So, the health emergency financial system continuity, but Abraham Lincoln once said: “The and crisis, was substituted with the they have not finally cleared the best way to predict your future is economic emergency. path towards economic recovery, as to create it”! The most striking aspect of such the coronavirus crisis has already emergency is that it has evolved as a caused a structural damage to highly virulent economic pandemic, the economy, and furthermore, where all the world economy was the economy and the respective 1Dean of Faculty of Economy, Business & plunged into the crisis as a whole recovery process is currently Development, European University of Tirana, and within weeks, following an moving into uncharted territory. UET.

July 2020 Bankieri 5 www.aab.al FRONTLINE Challenges for entrepreneurship and government support, during COVID-19 pandemic

Now that we will have to live in a “new normal”, by having coronavirus between us, we have focused all our energies on the process of economic recovery, working with several scenarios, for which deep analyses are underway.

were good measures for the health stakeholders, as well as on site battle, they were asphyxiating visits to enterprises allowed to measures for the economy and operate, to better understand business, which were entering their problems, in order to set a very difficult period, which is priorities. It was important, first, expected to continue for a while. to create conditions for businesses The battle remains global, so that provide food products, either be the reaction, too. This was the producers or importers, to be able reason why, we started taking to run their activity, as well as to measures very quickly, while discipline people movements, by not interrupting the supply chain of the population. Now we may already say that, together with entrepreneurs, we succeeded Eduard SHALSI While the banking system is despite terrible difficult Minister of State for Entrepreneurship facing extraordinary challenges, Protection conditions. it should be understood that the The situation was managed traditional banking mechanisms effectively, by taking into account the requirements and instruments it would be hile the pandemic got, and complaints, which were even the developed impossible to successfully presented by representatives W world, completely off overcome the consequences of chambers of commerce and guard, just two battles took place of COVID-19 pandemic and business associations in the simultaneously, thus agreeing country. Depending on the sector that new ways must be found, and acknowledging globally that, where businesses operate, despite hesitations, insecure and extraordinary measures the requirements have been of and hazy attitudes from some must be taken, to cope with the different typologies, the most world leaders, the main and most unprecedented situation. important of which were related important battle to be won was the to tax reliefs (VAT, profit tax, health battle. health and social insurance, etc.), Such difficult and unimaginable subsidies and financial support period put everything in question (for employees, services, or for and changed, within a short time, carefully following the experience rents), facilitating administrative the way of perception for life and of other countries, by calculating, procedures, issues with goods and the world. While all forces became in a not-easy and unprecedented employees’ movements, as well concentrated on the health battle circumstances, what would be the as concerns about international front, the war on coronavirus most effective measures. and intercity transport. The would, unavoidably, begin to affect Another challenging front, ease of communication with the the economy, day bay day. Whereas during this two-month period, latter, thanks to the bridges of the social isolation and the has been the holding of a continuous cooperation, enabled restriction of people movement series of online meetings with the addressing of the main issues,

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related to such unusual crisis. Also, this package offered a second have, in front of us, a not-at-all Also, it has been extremely state guarantee, not only for easy global challenge. By having important to conceive and design salaries, but also for companies’ a special focus on the complexity economic assistance packages, working capital, in the amount of of pandemic, the recovery phase along with the analysis of different ALL 15 billion. At the same time, will be accompanied by other needs for each business. These it was possible to extend the measures, in order to minimize the packages came out as a produce terms of payment of preliminary damage and speed up the recovery of numerous consultations, not profit-tax installments for all of the economy, in the country. only with businesses but also companies, excluding the banking Meanwhile, I think that with experts of the field, trying system, telecommunications, the banking system is facing to support the entrepreneurship, public companies, as well as extraordinary challenges and, especially the most affected ones. food supply chain companies. For while we have agreed with the The first financial aid package, entities operating in the field of central bank and commercial introduced on March 19th, 2020, tourism, contract manufacturing, banks, so far on how to manage the included a series of measures call-center and businesses with situation, regarding the liquidity that were taken to cope with an annual turnover of up to ALL 14 issue, it should be understood the consequences and the fight million, the postponement of profit that the traditional banking against coronavirus, at all fronts. tax payment was provided, as well. mechanisms and instruments Such package consisted of the As above-mentioned, a very it would be impossible to re-scheduling of profit tax for all specific requirement from the successfully overcome the businesses, with a turnover of up to entrepreneurship and with a direct consequences of COVID-19 ALL 14 million, the postponement of impact on the Albanian economy, pandemic and that new ways financial statements’ submission, has been the necessity for liquidity must be found, and extraordinary together with its annexes, until to meet the needs for employees’ measures must be taken, to cope July 31st, the sovereign guarantee salaries, as well as for working with the unprecedented situation. for businesses, “war salary” for capital. The two instruments of Now that we will have to employees, as well as payment sovereign guarantee have been live in a “new normal”, by having holiday (postponement) for loan finalized, through a successful coronavirus between us, we have installments, as well as the and intensive cooperation with the focused all our energies on the postponement of rent payments. banking sector. Being aware about process of economic recovery, The first package supported about the importance of the banking working with several scenarios, 38,645 businesses and some 64,886 sector, as one of the main pillars of for which deep analyses are employees. In this package, the development of a stable economy, underway. There are still no clear- government approved and enabled the Albanian government in close cut decisions, as the dynamics and the implementation of a financial cooperation with this sector, evaluation of the consequences plan to weather the situation, addressed the main demand of are still continuing and the path of dedicated to public health, people the entrepreneurship, in terms of recovery remains to be paved with in need and the unemployed. Also, liquidity. The flexibility shown by care and prudence. an important component of the the banking sector in this situation To close, I would like to invite first package was the state loan reflected the maturity achieved all actors and economic and guarantee with commercial banks during these years, thus proving financial factors, both public for the salaries of businesses’ the same level of performance and private, to continue the employees, whose activity was with the countries of the region, constructive communication they affected by COVID-19, with a value and beyond. have had with us throughout this of ALL 11 billion, a guarantee for Certainly, throughout this period, as only through continuous which the government covered arduous and unusual journey, we communication and monitoring of even the interest payment. have walked alongside business their issues, we can stand by and Following the developments in and entrepreneurship, working support them in overcoming such the country, the second package with several scenarios to overcome extremely difficult situation, which continued to support businesses the situation, but also hoping I am confident we will overcome and employees, especially by for a balancing of the Albanian successfully. subsidizing employees' salaries. economy, in the near future. We

July 2020 Bankieri 7 www.aab.al FRONTLINE Monetary policy as a monetary control and economic stabilization instrument

The sudden shock of the pandemic called for a swift and targeted response from Bank of Albania, to mitigate the one-time costs of the crisis, to avoid its transformation from an economic shock to a financial crisis, and to create premises for an economic recovery, as soon as possible.

Albania’s monetary policy has a clear monetary policy aims to mitigate objective: achieving and maintaining short-term fluctuations in economic price stability. activity around its trend. In accomplishing such objective, Bank of Albania implements, in the Bank of Albania implements parallel with inflation targeting, a the inflation targeting regime. This free exchange rate regime: the ALL regime means that monetary policy exchange rate against currencies decision-making: (i) is oriented is freely set in the market, in towards the future, taking into account accordance with the dynamics of the time lags in the transmission supply and demand for foreign mechanism of monetary policy; and exchange. The flexible exchange (ii) factorizes all relevant economic rate enables the implementation information on current and future of an independent monetary policy, Erald THEMELI price performance. Also, the oriented towards maintaining price Head of Monetary Policy Department Monetary Policy Document stipulates stability, and provides the economy BANK OF ALBANIA1 with an automatic stabilizer, against internal or external shocks. From an operational point of view, the implementation of monetary he negative consequences that Given the narrow channel left policy is based on a modern Covid-19 pandemic is causing framework of instruments, which are Tin the economy, have brought to for conventional stimulus, in the in line with principles of a free market. the spotlight the response of public form of further reduction of key This means that Bank of Albania authorities to mitigate its economic interest rate, the Bank of Albania does not impose administrative and social costs. Monetary policy, has prepared contingency plans, restrictions on interest rates’ level, along with fiscal and macroprudential or the volume of loans. In contrast, policy, is one of the three main forms which take into account the use it uses instruments that affect of state intervention in the economy, of non-conventional instruments the volume and cost of liquidity in and it has a primary role in this of monetary policy, such as the banking system, as a starting regard. This article aims to provide quantitative easing programs. point to affect the monetary and a description of the role and mission financial conditions in the economy, of monetary policy in Albania, the the volume and cost of borrowing, stance and instruments it has used the progress of consumption and to manage the situation, as well as its investment, and - lastly - the level of immediate perspective. prices in the economy. Mission, regime and opera- The current monetary policy tional framework of the monetary that Bank of Albania implements a stance policy of the Bank of Albania flexible inflation targeting regime, The shock of the pandemic found According to the best principles which means that - without prejudice Bank of Albania in an accommodative of central banking, the Bank of to respecting the inflation target - course of monetary policy. This

1 The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy, or position of Bank of Albania.

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Key Interest Rate ( %) bln Volume in the interbank market and Repo injections 9.0 ALL 1-3-month Repo 7-day Repo Interbank 60 8.0 7.0 50 6.0 5.0 40 4.0 30 3.0 2.0 20 1.0 10 0.0 12/2002 12/2003 12/2004 12/2005 12/2006 12/2007 12/2008 12/2009 12/2010 12/2011 12/2012 12/2013 12/2014 12/2015 12/2016 12/2017 12/2018 12/2019

0 01-15 12-15 10-16 09-17 08-18 06-19 05-20 stance is dictated by the low and interest rate, by bringing it to the monetary policy, by enabling a better below-objective levels of inflation, lowest historical levels (panel A, control of the interest rate curve. which have reflected: (i) the graph 1), increased the volume of The use of these instruments insufficiency of aggregate demand liquidity it injects into the system, was transmitted to interest rates of to ensure the full use of country's and extended the average term of the financial market (panel A, graph productive capacities and (ii) low such injection (panel B, graph 1). 2), was reflected in the expansion of inflation in our trading partners’ In parallel, the Bank of Albania has the Bank of Albania’s balance sheet economies. used market orientation on the future (panel B, graph 2) and created the The monetary stimulus is of monetary policy, also known as premises for a gradual loan growth administered mainly through forward guidance. This instrument, (panel C, graph 2). conventional monetary policy which is part of the group of non- Reducing the cost of borrowing instruments. The Bank of Albania conventional instruments, increases and increasing its volume have has aggressively lowered the key transparency on the future of supported the growth of aggregate

July 2020 Bankieri 9 www.aab.al demand and domestic inflationary and improving the liquidity of monetary developments remains pressures. Our empirical estimates businesses. high. A prolonged crisis, or eventual show that our monetary stimulus has Their first effects have already problems in the transmission had a significant effect on economic been displayed, in improving the mechanism of monetary policy, growth (panel A, Graph 3) and indicators of volatility, liquidity and would require further relaxation of inflation (panel B, graph 3). in the relatively smooth movement its stance. Given the narrow channel The sudden shock of the pandemic of funds in the financial markets. The left for conventional stimulus, in called for a swift and targeted actions taken by the Bank of Albania the form of further reduction of key response from Bank of Albania, to highlighted once again the important interest rate, the Bank of Albania mitigate the one-time costs of the role that central banks play in crisis has prepared contingency plans, crisis, to avoid its transformation management. which take into account the use of from an economic shock to a financial Near future perspective of non-conventional instruments of crisis, and to create premises for monetary policy monetary policy, such as quantitative an economic recovery, as soon as The crisis we are experiencing easing programs. possible. is unprecedented, both in terms In any case, the activation In the area of monetary policy, of gravity and complexity. During of contingency plans will be the measures taken just increased these turbulent times, the design conditioned by the materialization of monetary stimulus further, aiming and implementation of monetary potential risks, while the use of non- at a normal functioning of financial policy continues to be guided by the conventional instruments will be markets, reducing the cost of debt accomplishment of its mandate for effected in accordance with the legal service, and promoting lending. The price stability. framework in place, and will take into expansion of monetary stimulus was So far, the monetary stimulus account the stage of development of achieved through the reduction of injected through the calibration and financial markets, and a detailed key interest rate to a historic low of careful interweaving of conventional analysis of costs and benefits. 0.5% and the removal of quantitative monetary policy instruments is The Bank of Albania will remain limits on liquidity injection, in the estimated to be quite sufficient vigilant to monitor the situation banking system. These actions at supporting the recovery of and assess the effectiveness of its complemented macroprudential economy and the rise of inflation monetary policy. As an independent measures, taken with the purpose towards the target. This scenario institution, oriented towards fulfilling of promoting loan restructuring and considers the rapid end of pandemic the mandate and with a careful guaranteeing the health of banking and the smooth and complete approach to risk management, it is sector, as well as fiscal measures transmission of monetary stimulus ready and prepared to respond to aimed at mitigating social costs, in to the economy. However, it is clear future challenges. the most affected social categories that uncertainty in economic and

%, cumulative % Inflation Annual Inflation without Monetary Policy Impact Real GDP Real GDP without Monetary Policy Impact 5.0 5.0 4.5 4.5 4.0 3.7 4.0 4.0 3.6 3.5 3.5 3.2 3.5 3.0 3.0 3.0 3.0 2.5 2.1 2.5 2.0 2.0 2.0 2.0 1.8 1.3 1.3 1.4 1.5 1.5 1.0 1.0 1.0 0.7 0.5 0.5 - - 2016 2017 2018 2019 2016 2017 2018 2019

10 Bankieri July 2020 www.aab.al FRONTLINE Banks striving for a strong growth and recovery If recovery is to be strong sustainable, Europe needs to draw upon the strength of the European market, further integration within the EU, and promote best practices to all of it trade partners as a way of integrating the broader European market.

of the continent. in regulation and policy making, For now, the number one priority being a member of the European must be the safety of citizens, Banking Federation (EBF) network followed by the minimization of the provides an important source of economic damage. As the health information on the measures taken crisis comes under greater control or coordinated, at the EU level, and countries slowly restart their and the best practices across economies in varying degrees, Europe. The EBF takes a strong leadership role, both in terms of crisis management and recovery. In addition to its 32 full members, the EBF maintains strong links with the During the crisis, banks EBF Associate Member community, represented by the EBF have Burçak INEL including the Albanian Association Head of Financing Growth, been at the center of efforts to of Banks, AAB. Moreover, many of the biggest European banks have European Banking Federation keep the impact of the crisis EBF-FBE significant economic presence in to a minimum. Banks’ close this important growth region. relationship with their clients First priority has been the n the last three months, provided a solid foundation for management of the crisis. This disruption caused by the pandemic Covid-19 has left a heavy mark the European strategy to ensure on the European continent. was so sudden and wide-reaching I business continuity and minimize An unprecedented health crisis that many businesses and impacted millions of citizens the fallout. entrepreneurs simply could not and businesses with devastating stay afloat alone. Governments effects to their daily lives and and supervisors across Europe, activities. While some European including in Albania, have taken countries topped the global the focus will shift to starting decisive actions to mitigate the pandemic rankings, no country was the recovery across Europe. As potential economic impact of this spared, and borders were closed, the consequences create a “new crisis, in cooperation with banks as with public and professional normal”, the coming year requires the main providers of finance. life suffering greatly from the strong leadership and cooperation Multilateral Development lockdown. In the services sector to mitigate the economic crisis Banks, including those with a much work continued digitally, and start a strong and sustainable clear European focus, such as but industries (as well as some recovery in our continent. the European Investment Bank services) relying on physical Experiences from all over Europe (EIB) and the European Bank for presence were radically confronted show the value of strong dialogue Reconstruction and Development with immediate cuts in production and close cooperation. Private and (EBRD), have been keen partners capacity and demand. The crisis public sectors, SMEs, consumers, with the local banking sector, both also had a significant impact on the bank, and different stakeholders in - and outside the EU. The EBRD emerging countries, such as those must be in a close dialogue. Given has disbursed more than EUR 1 in the Eastern and Balkan regions the global influence, the EU has billion up until now, with a current

July 2020 Bankieri 11 www.aab.al portfolio of EUR 756 million, 51 a full picture of the acute phase of Access to finance, while of which have been destined to the crisis, early figures, including critical, is not the only goal Financial Institutions (mainly for data from non-EU countries, show here. The EBF fully supports the agribusiness credit lines). that the public and private schemes twin priorities identified by the Albanian supervisors have have mostly functioned as intended, European Commission - digital declared their commitment to and that banks have supported the transformation of the economy and safeguarding the health of the economies through hard times. the transition towards a sustainable, Albanian banking system, with a According to the ECB’s most recent inclusive and resilient economy. It number of measures. The Bank of bank lending survey, lending to is now, during the recovery phase, Albania recently extended its loan businesses in the Euro zone rose with a higher reliance on digital payment holiday with another three 6.6% in April of 2020, compared to a infrastructures and less pressure months and gave banks more time year earlier, the fastest pace since on the environment, that we better to restructure loan portfolios this the fallout from the financial crisis, see the true value of these strategic year. Other non-EU countries, such more than ten years ago. Loan priorities. To adapt and thrive as: Serbia, Montenegro, Bosnia and provisions in March 2020 increased in the world beyond the crisis, Herzegovina, North Macedonia and by around EUR 120 billion flow, the European governments, companies Azerbaijan, have shown similar highest monthly level on record. and financiers alike will need to collaborative stances, using public- The ECB has estimated a lending invest in activities that generate private action to prevent economies capacity of EUR 1.5 trillion as a long-lasting value for society – from suffering the worst. result of the combined measures. be it public health, employment During the crisis, banks The second phase will be the preservation, crisis prevention, represented by the EBF have been recovery. Here, both the funding or environmental priorities. It is at the center of efforts to keep the available and how it will be used an opportunity to create stronger impact of the crisis to a minimum. are important. Putting companies, synergies between public and Banks’ close relationship with their especially the small ones, back private financing. clients provided a solid foundation on their feet and ensuring their Europe’s leadership in both for the European strategy to ensure competitiveness and future areas is important, and the EBF is business continuity and minimize resilience will require improving doing its part, with its leadership the fallout. Banks have put in place access to finance and diversifying in supporting SMEs’ and other measures to protect the safety of funding sources to fund innovation. companies’ digitalization and clients, employees and to keep As economies re-open, business sustainable finance. The EBF’s the economy going. Moreover, by owners will need to re-connect with close cooperation with SMEs is also working constructively with the their customers and re-establish an important avenue for recovery. prudential regulators early on, supply chains. The speed will vary, More than ever, European banks banks increased their flexibility to depending on the measures in stand ready to help companies and lend to the economy in distress. place. Particularly the companies clients survive the effects of the In addition, the decision to forego operating in the hospitality and pandemic. bonuses for high earners and the tourism sectors are victims of Europe’s public institutions, decision to suspend dividends, all the pandemic. Concerns about together with global partners, such contributed to increasing the flow unemployment and even insolvency as the IMF and World Bank, will of liquidity into the economy. The are very real and present in many be instrumental in achieving these decision on dividends alone has countries. goals in the coming years. Above all, made more than EUR 300 billion The EIB Group will provide it is a time for the European Union of credit available to European EUR1.7 billion to support the social and its stakeholders and partners citizens and businesses. and economic recovery of the to shine. If recovery is to be strong The ultimate goal of these Western Balkans from the Covid-19 sustainable, Europe needs to draw efforts was to channel public pandemic. This is part of the EUR 3.3 upon the strength of the European financing and to providing new billion financial support package for market, further integration within credit lines to cover liquidity needs the region, announced on April 29th the EU, and promote best practices and increase amounts of working by the European Commission and to all of it trade partners as a way of capital. While the latest figures follows the Team Europe efforts to integrating the broader European from the ECB will not yet give us support the Western Balkans. market.

12 Bankieri July 2020 www.aab.al FRONTLINE COVID 19 – The Open Up

The experience gained, after the financial crisis of 2008, has made the banking sector more careful, more prepared and more complete, although the situation we are going through is unprecedented and there is no similar experience from the past, to make the crisis overcome easier.

economic balances. as the salary guarantee, became International institutions have effective for an amount of ALL 11 made clear that Albania will billion, for all those companies be among the countries in the that were affected by COVID-19, region that will experience the which could borrow for salaries deepest recession, from -5% to of laid-off employees, where the -9%. The most negative effects loan interest would be paid by will come from tourism, declining the Government. By May 31st, the remittances, cooperation with number of approved businesses neighboring countries (Italy and reached over 400, for an approved Greece affected, accordingly), amount of over ALL 5 billion. and the behavior of young foreign With DCM no.387, dated May investors remains to be seen. 13th, the Council of Ministers Dr. Spiro BRUMBULLI The government, following the approved the state guarantee Secretary General measures taken in March, took about necessary funding for the ALBANIAN ASSOCIATION OF BANKS, AAB decisions about two financial recovery of trading activity. An packages for supporting all small amount of ALL 15 billion has business and employees, who had been set as a guarantee for lost their jobs, due to COVID-19, commercial banks, where the hile the lockdown, due by way of paying them the "war Government guarantees 60% of to coronavirus, became salary" for three months and with loan principal. This guarantee W effective through the a single payment of ALL 40,000. will be given to any company implementation of stringent The Normative Act No. 18, made affected by the Government's measures, by establishing control some changes related to the restrictive decisions, related to over infected cases and protecting prepayment terms of profit tax COVID-19, for working capital, or the rest of the population from installments and the simplified for investments, with a maximum infection, another risk was profit tax for certain categories of of 5 years of maturity. identified – the economic situation. taxpayers, along with postponing Bank of Albania, as the Calculations for recession, respective installments for monetary policy authority, has unemployment, threats of food 2021, with exception of banks, taken a number of measures shortages, budget imbalances, telecommunications, sale of to deal with pandemics from inability to make a living, etc., pharmaceutical products and coronavirus, such as: took shape, as challenges on the food, fruit and vegetable products, • lowering the key interest rate tables of policymakers. At the which will carry on with payments, to 0.5%, historically the lowest microeconomic level, declining normally. The government, level; revenues, lack of liquidity and through other normative acts, • liquidity injection. It changed deteriorating solvency will decided to postpone leasing the form of the auction for the test the financial viability of obligations for two months (April weekly liquidity injection, from businesses and households. At the - May), both for individuals and a very limited auction to a fixed- macroeconomic level, increasing for natural/legal persons, with price auction. Commercial banks public and private debt will test revenues up to ALL 14 million. may use unlimited liquidity the sustainability of the country's The first state guarantee, known window from the Bank of Albania,

July 2020 Bankieri 13 Në qoftë se keni kredi në një Bankë tjetër, vizitoni menjëherë degën më të afërt të ABI BANK dhe në 10 minuta bisedë, ju mund të merrni kushte më të favorshme rifinancimi. www.aab.al at the cost of the key interest rate There is no pre-prepared recovery the range of services through set by it, which is currently at the plan for this type of situation, other electronic platforms: e- level of 0.5%. and this is the first lesson from Albania. A positive aspect of the • suspension of the dividend lockdown and what we are facing lockdown may be considered distribution by banks (profit now in the open up process. the familiarization of customers carried from previous periods, Although the deadline for with online electronic services, profit realized in 2019, as well postponing three loan installments without the need of physical as the profit that will be realized payments expired at the end of presence at points of sale, or during the first half of 2020), until May (the number of beneficiary service. On the other hand, such the end of June 2020. borrowers reached over 23 lockdown suggests that the range • relieved treatment (by thousand, for an approved amount of electronic service should weighting with 0%) of bank of ALL 244 billion), the recovery of be expanded. The opportunity exposures to Albanian government businesses and family members is of making online payments for debt securities in foreign currency, impossible to happen during June. any public service, but also for those securities that will be The banking industry demanded e-commerce ones, must be issued during 2020, valid until the a longer holiday period for loan accelerated and consolidated. maturity of these securities. repayment and for non-calculation Despite being a small country, • temporary commissions’ online orders and online services waiver applied by banks for ALL will be part of our lifestyle. This loan transfers, in non-paper form is a moment that needs to be by their clients, as well as fees Despite being a small country, better exploited for benefits in the for participants in AIPS and AECH online orders and online services future. Investments in technology payment systems, operated by the should aim at clear and necessary will be part of our lifestyle. This Bank of Albania, starting from objectives. April 10th, 2020. is a moment that needs to be What is missing after the open Although the first quarter of better exploited for benefits in the up of the economy, following the the year showed a steady growth future. Investments in technology lockdown due to COVID-19, is the trend of the banking sector for experience for the new lending should aim at clear and necessary lending, deposits, profit, capital situation. The situation after adequacy and a halt of NPL, the objectives. the quarterly lockdown of many enforced closure for businesses businesses no longer resembles and individuals, due to COVID-19 the February’s one. Any analysis pandemics and lending relief based on the past becomes invalid. measures, the impact that the of respective bank provisions, due The analysis should be oriented real sector has suffered will to restructuring, or arrears during towards the future and the more certainly not go unnoticed, neither this period of postponement - we go into the future, the more in the financial market, nor in proposals that were approved uncertain the predictions are. So, the banking sector's activity by the Bank of Albania, in end of a new model of analysis needs to indicators. The experience gained, May. The effect of such measure be developed, as new risks appear after the financial crisis of 2008, is to directly increase liquidity over the horizon. The way they has made the banking sector for borrowing households and will be accommodated in relevant more careful, more prepared businesses. The three-month loan analyzes, how the predictability and more complete, although the repayment holiday (March-May), rate will be increased, how clear situation we are going through increased the disposable liquidity and decisive the macroeconomic is unprecedented and there is for borrowers at over ALL 9 billion. policies of medium-term no similar experience from the Investments made by the development are, how the past, to make the crisis overcome banking industry in providing connection with other economies easier. The world is facing a online services, customers’ will be - all these are part of the challenge that we are all moving familiarization with computer challenge to be faced with. The forward with careful steps and or smartphone operations, not open up process requires a new taking advantage of every positive only helped many services to go preparation for a “new normal” experience, wherever it is proven. seamless, but also expanded towards a new way and lifestyle!

July 2020 Bankieri 15 www.aab.al FRONTLINE Banks in front of COVID-19

BANKIERI: 1. What is the progress of loan applications and approved cases (business or retail segment, products: personal, mortgage, working capital, for investment, etc.) 2. What issues accompanied the loan re-scheduling process? 3. Do you think that the loan repayment holiday will impact the bank's annual financial result? 4. Are there new loan applications during this period, and of what kind of loans? 5. Given that this is the first time a state guarantee for business support is applied in Albania, how would you deem such measure? 6. What is your recommendation for having a better use of such instrument? Can it be used in the future, after the "lockdown"?

applications, 80% of individual course, this will have consequences clients and 91% of business clients on banks’ performance indicators have benefited for their payments so and financial positions, but it far, while we still have cases that are should be noted that the crisis, as being processed. it will have consequences, may also create opportunities to the benefit 2 The process has faced difficulties, of business community, including related to the client, who had to banks. prove that s/he was affected by anti- COVID-19 measures, to benefit from 4 Individual borrowers have conti- loan repayment holiday scheme, nued to apply for new loans, albeit according to the moratorium at a lower rate than in previous and country’s legal & regulatory months. Businesses have been more framework. However, the process skeptical due to the uncertainty they has proceeded normally and with have about the time horizon of the ALPHA BANK ALBANIA confidence, both from bank and from crisis and the post-crisis period. We Nikolaos Lamprakakis borrowers. Also, I am confident that noted a large use of existing credit Member of Executive Board for even for the remaining period, until limits (overdrafts), as well as of their Wholesale Banking Business end-August 2020, the process will available cash in the Bank. Also, bring benefits to all parties. these borrowers showed interest in benefiting from government- 1 Regarding the loan repayment holi- 3 It is too early to talk about long-ter- guaranteed lending schemes, in day, I may say that the applications m consequences. For individuals and order to pay salaries to employees have come from both individual other borrowers, loan installments and for working capital and and business borrowers. By end- postponement has enabled them to investment needs, with a repayment May 2020, Alpha Bank Albania breathe (in economic way) properly. period of up to 5 years. has received 816 applications Postponing loan installments from individual customers, mainly makes the banking system the 5 The first state-guaranteed lending related to consumer loans and biggest contributor to weathering scheme for salaries was a very good 93 applications from small and the crisis, by feeding the economy scheme, which was being applied in medium-sized businesses, as well and families with much-needed several other countries, as well. Now, as from corporations. Out of these liquidity, during this period. Of with recent improvements where

16 Bankieri July 2020 www.aab.al interest is 100% subsidized by the this period have come from both state, such scheme is very attractive existing loan clients and operational and very useful for businesses, customers, who had channeled the which pay attention to the long-term payroll payments of their employees, relationship with employees and through the bank, until February keep the talented ones at work. 2020. Applications have originated As for the second scheme, where the from various sectors of the economy. state guarantees 60% of the loan, affected by the current situation for working capital and investments and Government decisions, as well (where the loan cannot be more as clients of different sizes (small, than ALL 300 million), I am of the medium, or large business). opinion, which goes in line with that Subsequently, ABI Bank is of business, that both existing and preparing to be included in the new customers will apply and use ABI BANK Second Sovereign Guarantee Loan it considerably, as it will provide to Gresa Panajoti Scheme, with the aim of recovering the affected by the crisis companies Advisor to CEO for Risk Issues businesses, directly or indirectly guaranteed liquidity for a relatively affected by the situation created by long period (up to 5 years). Covid-19. Like the experience with 1&2 Following the announcement the first Payroll Loan with Sovereign 6 I think the government succeeded of the state of natural disaster, the Guarantee, our expectation is that to present the two instruments to American Bank of Investments, customers and banks will show the business within a short period of according to the regulatory cooperation and understanding, time, by avoiding any negative effects guidelines for such situation, has in preparing and submitting the from not announcing them at the acted swiftly and taken special care required information, according to same time. This caused the business of customers’ claims, affected by the bank's lending standards. skepticism of applying under the the pandemic. The applications that first scheme, to be short lived. At have been handled and processed the same time, the eligibility criteria have come from all segments of for qualifying for the first scheme, the bank's portfolio: individuals and should have been more precise. businesses. State-guaranteed lending schemes are known worldwide, but in many 4 Along with managing applications countries have replaced them with for loan repayments holiday, ABI direct government subsidies, or with Bank has welcomed and normally development programs with low and handled applications for new loans, very low impact form central or local both from individuals and businesses. governments. Applications have been of different types, but I would especially single out those with investment feature.

5 Immediately after announcing the opportunity of financing salaries through a sovereign guarantee, ABI Bank took all measures to CREDINS BANK respond to customer applications. Florian Popi A dedicated team with financial Head of Large Business Credit Risk analysts, risk specialists and bank Department lawyers were set up, immediately, which addressed the priority 1 We have suspended the loan applications for “Payroll Loans, repayments, or interests on credit backed by sovereign guarantee”. lines/overdrafts, for the period The applications processed during 13 March - 31 May 2020, for all

July 2020 Bankieri 17 www.aab.al borrowers in financial difficulties, impact on the bank's financial To date, 50% of Corporate & SME upon application and approval based statements, for the year 2020. clientele has applied and benefited on terms of each borrower, and from the moratorium, thus taking the within the agreed deadlines between 5&6 Loan products, covered by the time needed to analyze the situation parties. Applications have been in sovereign guarantee are viewed and effects in the respective high numbers, where the Individuals as positive by businesses, and the enterprises and to negotiate segment could be mentioned, with bank recommends that they should carefully with the bank to resume about 1,050 borrowers, with an continue to be used, even after the loan repayment and re-schedule the approval rate of 81%, and with 84.1% Covid-19 pandemic has passed. These payment plan. approval rate, in terms of monetary products would be very favorable, Loan demand is currently focused value. Meanwhile, for the Business if the actual opportunity could be on meeting the needs for employees’ segment there are 1,212 borrowers, offered for strategic sectors of the payroll, or working capital, which are with an approval rate of 85.89%, and Albanian economy (such as: tourism, being met and relied on packages with 91.77% approval rate, in terms processing industry, agriculture, implemented with the support of of monetary value. Products for etc.), but also for certain businesses government guarantees, as well loan repayment postponement have categories that have provided, or are as on a specific fund of EUR 50 been mainly for loans with monthly expected to provide positive impact million, approved in March by Board repayment plans, from Business on both country's economy and also of Directors of Intesa Sanpaolo segment and mortgage loans, on socio-economic environment and Bank - Albania, with very favorable form Individuals segment, but also culture. conditions. In the current situation, products for working capital, such there is a decrease, as expected, in as: overdrafts and credit lines for the loan demand for new investments, Business segment, with quarterly as companies generally postpone repayment plans, for the period in unnecessary investment plans. concern. I appreciate the positive experience INTESA SANPAOLO BANK created by the application of the 2 Some of the issues for loan ALBANIA salary package backed with sovereign repayment holiday are the uncertainty guarantee and the cooperation of the of business performance during banking sector with the Ministry of 2020 and financial costs, both for Finance and Economy; this made Individuals and Business segments. possible to gradually implement In addition to financial costs, which the agreements and increase Credins Bank is trying to minimize the flow of loan applications and for borrowers, another issue is the disbursements. We anticipate high uncertainty in predicting the that the fund distributed to Intesa financial performance, especially Sanpaolo Bank - Albania will be used for businesses, in the short-term within June. Meanwhile, applications horizon. for the second package have already begun. 3&4 Credins Bank has adapted its approach, by offering new products designed for such situation and in its strategy will continue with financing for working capital and investments, Ervin Xhomo for all segments. Also, this strategy, Head of Corporate & SME Division combined with the facilities that will derive from the temporary Loan moratorium was a mandatory suspension of regulations on risk and unavoidable measure, which management by the Bank of Albania, was swiftly taken by the Albanian as well as the provision of banking government, in agreement with the products with sovereign guarantee Bank of Albania, and welcomed by backing, fully provide a positive the Albanian and foreign enterprises.

18 Bankieri July 2020 www.aab.al

safety of our staff and customers and how and whether they will be able to the observance of proper protocols, repay it. The perimeter of companies established by relevant regulators that are eligible to receive funding and authorities. must be determined, by taking into account the entire supply chain 3 Intesa Sanpaolo Bank Albania has and the economic circle, in order a solid financial situation and all to facilitate and accommodate all reports demonstrate that we have sectors of the economy. full capacity to fulfill our role and give our contribution to the Albanian economy, to overcome such a situation.

4 Due to the pandemic situation, consumer behavior is affected Klodiana KEÇI (PIQANI) and will be definitely changed. Head of Retail Division Consumers will have a more careful approach to their needs and the 1 The bank offered its support spending budget; also, s/he will be and the opportunity to apply for more saving-oriented, in order to a moratorium for all its clients. recover what they have lost during More than 99% of all moratorium this dramatic period, as well as be application of individuals and prepared to weather difficult times. business clients were approved and It remains normal and predictable reserved in the system, within a very that, starting from now, the demand short time. Speaking of numbers, for new loans, especially for mortgage loans predominate in the individuals and consumer loans, will total number of loans for individuals, be at the lowest historical level we approved for the moratorium, while have ever had, as many individuals OTP BANK ALBANIA in terms of volume mortgage loans have suffered losses, or declines account for more than 85% of the in income and, in a way, the level of 1 The implementation of the Morato- volume for loans approved for uncertainty has increased between rium was done immediately, helping moratorium. In terms of business them. all customers by halting the payment exposure, the moratorium has been of loan installments, but since the applied equally to both investment 5 So far, the total number of small process is complex and requires and working capital financing, which businesses that have applied is about a lot of intervention, even manual represents almost 60% of the loan 38, with a total amount of EUR 1.2 one, it will take time to be called as total portfolio. million. The bank has implemented a completed. It is very important for balanced approach to this process, by us that customers are served, do not 2 By being aware of the severity of stimulating and approving all those suffer any effects from the bank's such situation, the inability to predict companies that can be supported working process and are well- deadlines, when the pandemic through funding, and avoiding informed, step by step. crisis would end, and its obvious loan overload of other companies, consequences on the repayment which may be more harmful by the 2 Customer applications are diverse, capacity of both families and instrument than benefiting from it. as their financial situations are, businesses, the Intesa Sanpaolo Bank their ability to plan, and the exact - Albania initially took the decision 6 In order for such schemes to play expression of the need, they actually for a moratorium extension. The their role completely and effectively, have. The loan repayment holiday whole process has been addressed they must be directed towards was applied, by consulting each and is being handled in spite of all individuals and companies at no subject and individual and not an all- other restrictive measures that we cost, so that private companies do inclusive automatic solution, one- had to implement, in terms of health not hesitate to use them and fear size-fits-all. This has called for a lot

July 2020 Bankieri 19

www.aab.al of human energy and time to achieve, movement to help businesses, but but it is also one of the working also banks, indirectly. principles of OTP Albania Bank - a unique and individual experience for 5 The sovereign guarantee for secu- customers - to provide personalized ring loan payments was signed on and most convenient solutions for April 10th, 2020. There are about the customer. 36 entities that have applied, with a total of ALL 587 million and 4,500 3 The moratorium has and will defin- employees of various segments, itely have a financial impact, as in from corporations to very small many other industries. However, businesses. Currently, we are in the the OTP Albania Bank management phase of its rapid implementation. and staff is committed to being by From our experience, coordinating the side of customers, businesses many actors is difficult, but all RAIFFEISEN BANK ALBANIA and individuals, to overcome this banks and Ministries showed the Evis ÇELIKU period of pandemic with as few will to cooperate, and we note Head of Retail Risk Division consequences as possible. Amid with satisfaction that common the dilemma: "cost versus quality", understanding was found quickly. we have chosen quality in favor of This is very important to note, as customer service, but also customer the efficiency of coordination in case 1 Loan payment holiday applications and staff safety. of many actors, directly affects the have come from both sectors: During the events like this we are performance of business and the business and individuals, as well. going through, which falls into the efficient injection of the required Their biggest flow was scored over category of crises, the ability is to liquidity. Under crisis situations, the first two months, and now its know how to manage all activities, time is a determining factor to get declining. Raiffeisen Bank applied where the life and health of people through, and it determines the the full support approach to all remains fundamental, by making amount of the effect caused. Together customers who have applied to our no difference: employees, clients, we managed to act efficiently, within bank, as well as a more specific friends and partners. Immediately an admirable time. We think that treatment for all those customers after that, the commitment is to sovereign guarantee is a necessary who have experienced repayment manage the effects that the crisis mechanism, helping to halt the in difficulties, even before the causes and the smaller the negative function of economic deterioration pandemic. Given the loan portfolio effects for everyone, the more and a concrete financial maneuver. characteristics of the retail segment successful the victory is considered. at Raiffesien Bank, the vast majority The well-being of employees and 6 We strongly recommend repeating of applications (about 98% of total) customers is directly related to the such an experience, but always came from Individuals. When it well-being of our bank. for specific situations and sectors, comes to loan products, we have We believe that any additional costs, because we believe that the market an equal distribution of volumes lost profits, or human endeavor is and competition are the best between secured and uninsured a worthwhile investment for the instruments and the banking market loans; regarding the number of country and will return positively in in Albania is really a competitive and applications, the trend is inclined the future, for the bank and every quality one. more towards uninsured loans, individual in oour society. where personal loans account for 75% of the total. 4 Lending is not what it used to be before March and that was expected. 2 Loan repayment holiday process Lending activity goes on and in recent is a process that normally requires days the demand has increased individual commitment between significantly. Meanwhile, we can say the bank and the client. The high that the sovereign guarantee has number of applications received been one of the credit typologies also during this moratorium period, the driven by the government's offer and bank's responsibility to respond to

July 2020 Bankieri 21 www.aab.al customers within 3 days from the objectively and accordingly, ayment holiday, for busin-esses application date, and quite limited especially that of industries that were faced with financial movements during this period, due most affected by the pandemic. difficulties; to pandemic restrictions, required Supporting programs with sovereign 2. Funding for salaries, through so- maximum commitment from our guarantee funds were and are very vereign guarantees. staff, but all this would have been important tools for loan financing Tirana Bank has: very difficult to cope without the help during this period. Since Raiffeisen 1. approved and is providing funding of digital platforms, the Raiffeisen ON Bank also operates online, in for salaries in businesses, application and the bank's website, addition to physical branches, it has covered by the sovereign by keeping the main focus on the enabled getting and processing new guarantee, immediately after the health of our staff and customers, borrowing applications. Certainly, agreement between them and the as well as on increasing efficiency, in there have got new loan applications Ministry of Finance and Economy; response to such specific situation. during this period, although numbers 2. approved most of businesses’ During this period, some are much lower, compared to the application for loan repayment misunderstood concepts by the period before Covid-19. Their trend holiday, immediately after gu- specific situation, were clarified, such has been increasing since May, while idelines provided by the Bank of as: the perception of the moratorium a number of applications have been Albania; as a total forgiveness/cancellation of made upon the sovereign guarantee 3. continued its lending activity, loan obligations by the bank, for the fund and we are ready to welcome by supporting the economy and period in concern, or the automatic and handle our clients’ applications. households, certainly through a application of moratorium process more prudent approach; for all clients during the such period, 4. offered specific financing prod- by not applying or showing up at the ucts, with favorable terms bank, which led to arrears, for a part and conditions, addressed to of clients, during this period. employees in the field of medi- cine and public order, who are 3 The moratorium itself has been struggling incessantly with the accompanied by facilitating and situation. supportive decisions in favor of The sovereign guarantee financing commercial banks, thus eliminating instrument is a financing alternative the effects that such delays would, that is deemed as improving the during normal situations, impact liquidity situation in businesses and financial statements and risk meet their financial needs, during parameters, not only by the Bank of this period. If we refer to the first ten Albania, but also by the European days, after the agreement was signed, Banking Authority. However, we there is a growing interest from cannot say that these measures alone businesses, which want to become would fully guarantee immunity, as TIRANA BANK part of such financing alternative. such impact is also directly related Glenda Kurti Banks have a 10-day deadline, from to further developments in the Head of Corporate Division and the moment of application and country’s economic situation, how Member of Executive Committee submission of documentation, until business recovery will carry on the moment of funds’ disbursement, and how they will operate under a which means that the processing new reality, or format. On the other Commercial banks have adapted time available is relatively limited, hand, Raiffeisen Bank, through its their strategy, priorities and annual given the number of customers who established structures, has taken budget rapidly in several directions, may be entitled to such funding. all measures to avoid, or mitigate a as the result of COVID-19 and recent Tirana Bank is in constant crisis situation in the future. developments in the country, as well communication with Ministry of as based on Government and Central Finance and & Economy and relevant 4&5 We remain fully supportive Bank decisions. Currently, the key institutions, by being very careful to businesses and individuals, by focus has been put on: that the criteria for qualifying assessing the risk of the situation 1. Measures taken about loan rep- customers for this financing are the

22 Bankieri July 2020 www.aab.al same as those set by the Ministry. reasons and for informing customers during this period. The Guarantee Fund, set for Tirana how to proceed with their claims Bank, is ALL 600,000,000, while the to the bank. Over 1,000 clients 5&6 Under such situations, the monthly salary fund of business (individuals and businesses) have provision of a sovereign guarantee, clients, paid through our bank, applied for loan repayment holiday, which aims to preserve employment exceeds this amount. Therefore, I or loan restructuring, during this and business recovery are more would affirm that this guarantee short period of time. than welcome, both by banks and fund will be used within the specified businesses. Preferential conditions timeframe. 2 The main issues have been: cl- and interest refunds are a major Clients who have applied for this osure of businesses, inability incentive to repay loans. This process funding belong mainly to the category to move, or the deterioration in takes time, so these schemes of small and medium enterprises, commercial activity, due to the lack need a longer time span, allowing operating in the field of trade, of customers, or suppliers and businesses to understand and apply services and production, contract this has been reflected in almost for them. I would suggest that such manufacturing, tourism, but there is every sector. The biggest challenge guarantee schemes should not be interest from big businesses as well, for this process was to clarify the one-off schemes, but hey must carry whose activity has been significantly misunderstandings created by on with more favorable terms for affected during recent weeks. customers, about the forgiveness of banks, to suit the typology and profile loans versus explaining a possible of customers they have, depending loan installment holiday, and a on the risk they assess. This would new payment plan that the client make banks more active and focus would have. Processing a large on targeted customers, according to number of applications against an their strategies. individual meaning for each of them, accompanied by an explanation of the client's contractual change, posed a challenge for the bank and its staff. The postponements have continued during the last month, as there have been clients who have applied “wait-and-see” model, to better study the situation and then make a decision, depending on the progress of businesses, or the forecast for the situation in development. UNION BANK 3 Union Bank is prepared to analy- Loreta Gogaj ze and cope with such situation. The Business Department Manager - experience gained, while handling SME problems caused by the earthquake, taught us to carefully analyze every credit exposure and customer need. 1 During these months, the objec- tive and priority for Union Bank’s 4 Despite the situation in place, staff, was to advise and serve there have been businesses that customers, to enable the continuity have continued investments started of various banking transactions and earlier, or wanted to renew the operations. Informing and orienting inventory, in accordance with the customers towards digital platforms, season. It is logical that the demand communication via telephone, has been moderate, compared to e-mail, or even directly, were very other years, where the sovereign important, both for transparency guarantee has got a special attention

July 2020 Bankieri 23 www.aab.al INTERVIEW AFSA – A new management for actual and incoming challenges

Modernization, further consolidation, increased reliability, and the implementation of higher oversight standards are among the challenges I consider to be qualitatively better addressed. Given the nature of a developing country like Albania, the Authority has a significant role to play, in promoting and developing supervised markets, and I believe that this is a role that needs to be emphasized.

both a privilege and a responsibility. main objective. The insurance Modernization, further consolidation, market, which accounts for 1.4% of increased reliability, and the GDP only, has a great potential for implementation of higher oversight further expansion and development. standards are among the challenges compulsory insurance products make I consider to be qualitatively better the most of this market. In the most addressed. Additionally, given the developed countries, a sizeable share nature of a developing country of such market revenues comes from like Albania, the Authority has a voluntary insurance products and we significant role to play, in promoting have a lot of room for development, in and developing supervised markets, this regard. Market expansion is also and I believe that this is a role that needed, in terms of diversification, to needs to be emphasized. make the insurance industry more Furthermore, the post- resilient to possible shocks. Ervin METE Covid-19 situation, depending on The investment fund market General Executive Director the extent of effects it will have on is also one of the most important ALBANIAN FINANCIAL SUPERVISION the economy and beyond, will set markets under the Authority’s AUTHORITY (AFSA) significant challenges for regulatory supervision, with a share of 3.9% of authorities. Although, during the GDP. Currently, the size of investment first phase, it seems that markets funds’ net asset value is comparable You have just been appointed as under surveillance weathered the to the countries in the region. AFSA General Executive Director. consequences relatively well, it is still However, compared to the countries Regarding your experience too early to predict the full impact and in the region, the number of market and commitment with financial the reshape that may be required, in players, i.e. management companies, institutions, how do you assess the terms of regulatory interventions. is still small. challenge of heading and managing However, the pandemic situation The voluntary pension fund such an important regulatory highlighted some essential needs, market still makes a very limited authority of the Albanian financial such as market development and share, compared to GDP, where net system? diversification, to better cope with assets to GDP are about 0.1%. The The Albanian Financial shocks, especially in the insurance Authority has proposed, even for this Supervision Authority (AFSA) is an market, and the need for radical market, some changes regarding institution that has undergone a technological developments and the existing law. However, given constant consolidation, in its role as digitalization. the market infrastructure in EU regulator and supervisor of non-bank countries, it will be necessary to re- financial markets, especially after What are AFSA priorities for dimension the development strategy the legal changes effected in 2014, the near future, regarding the for this market, especially in terms of which strengthened its institutional development of the financial professional pension plans (IORP). independence. As one of the two key market in Albania? Capital market development, supervisors of the country’s financial The development of markets which is the market that creates markets, managing the Authority is under supervision remains the opportunities for investment

24 Bankieri July 2020 www.aab.al funds and pension funds to invest technology). Your opinion about on best international practices. their funds, remains a priority. In such developments and what will The adopted laws, which will be Albania, the capital market is in its be the expected impact of such followed by the drafting of a series of infancy and the Authority, but also new legal developments? relevant bylaws and regulations, will the market, must view this fact as Drafting and adoption the laws further strengthen the supervisory positive. The financial crisis of 2008 "On Capital Markets" and "On framework of the Authority, as well revealed many problems, related Collective Investment Schemes" was as modernize and further develop the to the behavior of brokearage a necessity, as both laws significantly capital market in Albania. companies, market abuse, or listed improve the legal framework, companies’s transparency. That is adapting it according to the dynamics Regarding the role of AFSA why the EU has come up with some of these markets’ development. within the Albanian financial new directives, such as the second These two laws aim to promote system, what must change, or Markets in Financial Instruments further development, increase be developed, in order to ensure Directive (MIFID 2), and subsequently, transparency and ensure the integrity a further development and the Market Abuse Regulation (MAR). of these markets. The laws were deepening of this market? Transparency is qquite essential in drafted with the assistance of the Non-bank financial markets the capital market. In this regard, World Bank, funded by SECO, and have developed at a relatively slow I think it is possible to develop such the best EU directives and practices pace, thus remaining limited, both market properly, learning from have been considered. I have been in relation to the banking market positive and negative experiences of personally involved in finalizing the and the markets of the region. The other countries. drafting and adoption of these laws, process of supervision and regulation Another priority is digitalization, and I believe that they create a solid has been developing in parallel with both in terms of real-time reporting platform for further development of markets’ development. of entities under supervision and these markets. Markets’ development will lead in terms of inter-institutional The law "On capital markets" to an increase in the types of entities communication. In addition to the reinforces legal framework, by under AFSA supervision, as well Authority as a regulator and entities establishing strong criteria for as to a greater diversity, regarding under supervision, digitalization transparency for all actors in these investment forms by such entities. serves the citizens, by reducing costs markets. This will require capacity building and and bureaucracies, for obtaining The Law on Collective Investment the implementation of contemporary services. Digitalization is essential for Schemes creates space for new types supervisory methods, by focusing reporting, inspection and e-services. of investment funds, both in terms of on risk-based oversight, with the Protecting insured persons structure (feeder or umbrella funds), aim of increasing the credibility of and investors, and increasing their as well as by nature (alternative regulators and financial institutions. confidence in supervised markets, funds, offered to professional clients, On the other hand, recent through strengthening the regulatory etc.). developments, in the field of role and ensuring effective risk- The Law “On Financial Markets FinTechs, have led to the emergence based supervision, remains a priority Based on Blockchain Technology” of a number of new products and for the Authority, too. This, even in regulates the infrastructure, upon services, which significantly increase the context of increasing financial which the blockchain technology efficiency and shorten transactions’ knowledge, to guarantee better works, the conditions for licensing, time, which should be in the focus protection for investors and insured the activity of operators and and attention. These technological persons. stock exchanges, as well as their developments dictate the need for supervision. Also, it regulates ongoing professional qualification Recently, some very important the conditions for the issuance of Authority employees, as well as acts have been adopted, related and trading of digital tokens and the need to adapt to the evolution of to the development and further virtual currencies, as well as FinTechs through modernization in deepening of the Albanian the authorization by competent supervision and regulation. financial market (the laws authorities. on capital market, collective Under the new laws, the investment schemes and financial Authority is empowered to conduct markets based on blockchain administrative investigations, based

July 2020 Bankieri 25 www.aab.al BANKING SYSTEM Banking of the future: challenges, vision and strategies

If, in the near future, banking products will be less and less standardized and stencil, and more and more adapted to the needs of customers, so the banking agencies, or their "branches" must evolve, according to this trend.

banks will be among the sectors and are being raised for the banking pioneering activities of Revolution sector, the answers to which must 4.0. be "translated" quickly into new "Classic" banking will continue strategies and vision for banks of to shrink, when facing digital space, the future: what new services and activities and opportunities, new qualities should banks demonstrate financial technologies and artificial and offer? What will be the customer intelligence. The information is needs, in the next 5 or 10 years? becoming more transparent, the What should the "architecture" and world more interconnected and more image of the banks of the future be global, many banking processes and like? How will, the right balance, be services are becoming independent, found between digital technology both in time and space. Thanks to (artificial intelligence, robotics, Prof. Dr. Adrian CIVICI technology, customers seek and machine learning, etc.) and human RECTOR use banking services on 24/7 basis. interaction? MEDITERRANEAN UNIVERSITY OF ALBANIA Online banks, now dubbed as "banks The answers to these questions need to be sought and found, first within clients, then in the he "positive" side of the Covid-19 technological developments and pandemic crisis is related to "Classic" banking will continue to the new situations prevailing in the fact that this severe and the financial and banking markets. T shrink, when facing digital space, devastating blow also served as a Actually, the biggest enemy for test of fundamental resistance to activities and opportunities, new banks is the so-called "Kodak “the new post-coronavirus reality financial technologies and artificial syndrome", the lack of will and vision and the necessary transformations intelligence. to change the business model, the that many economic and financial damage from the "fear of necessary sectors must undergo, in order to be radical change". Traditional banking competitive and performing, under activity needs to be transformed the new conditions in the future.” of the future", are developing at a into an inter-sectoral business Banks are no exception to this rule. dizzying pace. It is estimated that model. "Pure" banking services Currently, the banking sector is in currently over 50% of customers are no longer enough. Profitability, a process of radical transformation. prefer to perform their banking efficiency and diversification should More precisely: in a radical digital services online, versus historical be the new objectives for every transformation, started years and traditional banking. The Internet bank. ago, but that new realities require and smartphones are helping Especially during this new it to be faster and more oriented tremendously in this new trend of post-Covid-19 period, "digital towards ambiguities, risks and new neo-banks, which is soon expected transformation" is the key word for challenges. Artificial intelligence to become an everyday reality. any change in various sectors of the and digital transformation seem to As a result of changes in economy, or services of all kinds. be the "battle horse" for banking in customer behavior and demands, The banking sector is concerned with the future, during the next decade. new competitors of the traditional "increasing the predictive capacity Already, everyone is convinced that banking sector, a series of questions of needs", "improving services",

26 Bankieri July 2020 www.aab.al

"diversifying supply and banking artificial intelligence", or a rapid re- through mobile phones, or products", "getting new customers qualification of a large part of the tablets. Now, such a practice, through digital channels", "adapting existing staff in this field. still in the early stages of its to business and investment cycles”, This new development in the massive development, is laying the "rapid adaptation to financial flows", challenges and strategies of groundwork for a new concept and etc. banks of the future will force them practice, called "invisible finance" Notwithstanding digital transf- to transform into "entities, or or "non-bank banking services." ormation, which has put the organizations of a technological The largest European, American, customer and the diversification nature", leaning more towards Asian banks, etc., are reacting of banking products as its main recruitment of specialists rapidly to this phenomenon, through objective, one of the biggest with a profile in informatics & partnership, or the creation of their challenges for banks of the future technology, than those with a "open banking" platforms, moving seems to be the "revolution in narrow financial or banking profile. towards the creation of large online their internal functioning", mainly Even their visions and managerial financial supermarkets, according focused on the flow of information strategies are expected to change to established models from Amazon, and data management. rapidly. According to the Boston or Alibaba. Experts for the banking sector Consulting Group, "radical digital A new vision and challenge and the radical transformations transformation of banks must go lie ahead of the "conception and expected in this sector estimate hand in hand with the transformation operation of banking agencies." that "the expected radical changes of digital skills and competencies of If, in the near future, banking in the internal functioning of their staff and must be supported products will be less and less banks of the future should be by an equally adequate managerial standardized and stencil, and more considered as the most strategic vision." Only in this way can banks and more adapted to the needs part of their transformation." enter the safe and efficient path of of customers, so the banking The dematerialization of banking the future of the banking sector. agencies, or their "branches" must service supply, in response to the One of the key challenges for evolve, according to this trend. The evolution of customer demand, was banks of the future is undoubtedly time of traditional agencies with the right response to this vortex the adoption of the "open banking" counters, behind glass or iron nets, of rapid changes in the banking system, which opens great with customers in line and bank sector. However, this digitalization prospects for increasing clientele, employees communicating with created a new "wealth" for banks: a new entries of actors in the banking every customer, is coming to an end. significant amount of valuable and sector, simplifying many banking The "tomorrow's" banking agencies necessary data and information, to processes and practices, super will be quite different, depending further improve customer service personalized financial services, on the evolution of digitalization and internal efficiency of banks' etc., personalized coupons for and customer requirements. They operations. shopping in preferred stores and will look more like “a studio, or Meanwhile, beyond the "cust- supermarkets, facilities for online a full-fledged reception lounge, omer approach", this new situation shopping, quick and easy access with digital screens, smartphones, greatly affected the internal to the loan system, personalized computers, etc., through which processes of bank’s operation. advice for customers, etc. All these customers perform actions, or Artificial intelligence led to a drastic services can be performed "easily" receive proper services. They will increase in the level and number of in the everyday life, thanks to "open no longer be conceived as a banking automated processes within banks. banking". agency "covering a certain urban According to a McKinsey study, 85% Beyond the anglicization of such or rural area", but will begin to of back office processes are already notion, the idea is quite simple: this specialize according to clientele automated. In the coming years, this development is a great opportunity segments: student services agency, figure is expected to be over 90%. offered to various businesses to business services, investment The biggest challenge for banks, connect securely with banking and development projects, for the now, in the coming months or services and customers. For purchase of specific products, etc. years, will be to "recruit specialized customers or consumers, "open and competent employees in banking" opens up extraordinary information technology and very simple payment prospects,

July 2020 Bankieri 27 www.aab.al

28 Bankieri July 2020 www.aab.al BANKING SYSTEM Automatic Exchange of Information What does it mean for Albanian and the Albanian banks

The purpose of financial information reporting is to identify different types of investment income, including interest, dividends and similar types of income, and to identify situations where the taxpayer seeks to conceal income, on which taxes have been avoided.

maintaining the integrity of their tax 09.03.2016, has agreed to exchange systems and combating tax evasion, automatically the financial account there is a need for cooperation information in 2020, under the Law between tax administrations to No.4/2020. The first reporting by exchange information on financial banks in Albania will be on July accounts, for individuals and 31st, 2020 and in the following businesses, according to certain years it will be effective at the end rules, as defined in the form of a of May of each year. common reporting standard. What are the obligations for In February 2014, G20 Fin- Albanian banks in this regard? ance Ministers and Central Bank Pursuant to Law No.4/2020, Governors adopted the Com-mon the Albanian banks must report annually to the General Tax Enkelejda TOTO Directorate the information on Senior Specialist, Compliance Programs and reporting financial accounts, for Controls Through this legislation and individuals and businesses, as Compliance, AML and FCM Division process, Albania holds an follows: RAIFFEISEN BANK ALBANIA For individuals: generalities, additional and very effective tool, jurisdiction of residence, account in the fight against tax evasion, or value balance, total amount of he rapid globalization of while the banking system is a gross interest generated during the international economy powerful mediator in this process, the year, and other individual data, Thas been accompanied which primarily enjoys a strong according to the template. by an inevitable expansion of reputation, related to integrity in For businesses: Company data, international movement of name, jurisdiction/s of residence, performing financial activity, in the capital, goods, services and TIN(s), account number and status, individuals. This process has market. total amount of gross interest been accompanied by increased generated during the year, by type investment, outside the countries of account (custody, or deposit), as of residence, and consequently well as data on the individual, as the with the management of these Reporting Standard (CRS) for last beneficial owner/controlling investments, through financial Automatic Exchange of Tax Infor- person of a passive NFE, or institutions in host countries. This mation. The aim was to promote and Investment Fund, based in a non- includes, also, keeping the capital implement policies for international participating country/jurisdiction, in "offshore" countries, as one of economic and financial stability. according to the relevant template. the consequences of bypassing Albania has joined the To implement such reporting tax obligations in their countries Multilateral Competent Authority requirement, banks have the of origin, i.e. tax evasion. This is a Agreement (“MCAA”) for the obligation to identify customers major problem for all jurisdictions, exchange of information, by signing tax residence, as well as the around the world. As all countries it in October 2014 and through the TIN (number), according to the have a common interest in approval with DCM No.178 dated tax residence. An individual, or

July 2020 Bankieri 29 www.aab.al business, may have one or more Albania has signed the The main purpose of such tax residences, and consequently Multilateral Competent Authority legislation is to avoid tax evasion. one or more TINs (tax identification Agreement for Automatic Exchange The purpose of financial information numbers). So, banks must fulfil two of Financial Accounting Information. reporting is to identify different key obligations for the automatic This agreement was approved types of investment income, exchange of financial account by DCM No.178, dated 9.3.2016 including interest, dividends and information: Identification of and provides that the exchange similar types of income, and to reporting persons (individuals and of information can be carried out identify situations where the businesses) and their respective on a bilateral basis, by competent taxpayer seeks to conceal income, reporting. authorities. According to the on which taxes have been avoided In order to carry out the agreement, Albania should start (eg: seeking information on account identification and reporting implementing automatic exchange balances). process, the bank must carry of information by end-2018, but this In addition to reporting, the out some preparatory processes deadline was postponed for 2020, legislation aims to limit the and take action, in accordance in order to have time to create attempts from taxpayers to avoid with the regulatory framework. the legal basis and infrastructure reporting, through the use of The identification of clients’ tax needed for its implementation. intermediary legal entities, or such residence is done through the self- To implement this obligation, a structures. So, banks and financial declaration template of clients. system must be put in place, which reporting institutions will have to Banks have the obligation to will exchange confidential data carry out a proper and expanded inform their customers about the between local tax administrations vigilance process. obligation to self-declare their tax and the countries of the declared So, through this legislation residence, as well as collecting tax residence. Also, a regulatory and process, Albania holds an these templates (forms) within a basis is needed for procedures additional and very effective tool, certain period, according to the about proper vigilance, information in the fight against tax evasion, applicable regulatory framework. reporting by financial institutions while the banking system is a Currently, under current conditions, to the Tax Directorate, as well as powerful mediator in this process, the process of reporting financial measures to ensure the effective which primarily enjoys a strong accounts to the General Tax implementation of the law. reputation, related to integrity in Directorate is really a challenge for What is the purpose of such performing financial activity, in the the banking system. legislation and what are the market. What are the obligations benefits for banking sector and for Albania and the Albanian Albania itself? authorities in this regard?

30 Bankieri July 2020 www.aab.al BANKING SYSTEM ICT – a key element of success in overcoming the Covid-19 pandemic situation

The banking sector could be considered as an influential promoter of digital evolution, contributing to the increase of the public trust in the digital era.

and capabilities to quickly adapt Home” approach, through efficient in the new environment, ensuring and secured communication business and operations continuity, technologies and devices, followed with minimum impact on the service by relevant and compliant quality. “Collaboration Tools”, became Despite the existing BCM imperative for various organizations (Business Continuity Management) and represented the first immediate & DR (Disaster Recovery) policies measure, in response to the and processes in place, the total lockdown restrictions and pandemic lockdown disaster scenarios had containment. For instance, not been fully tested in the past. “Smart Working” technologies, Scenarios, like staff and building implemented and used on voluntary unavailability, where typically basis in Intesa Sanpaolo Bank Alketa LAMÇE designed and tested considering Albania since 2019, proved and Head of ICT Division the best standard requirements, offered flexible solutions during INTESA SANPAOLO BANK ALBANIA such as: identification of critical the lockdown period. Technologies, staff and processes, identification such as: “Virtual Desktop” and of a dedicated building, from which “Skype for Business” guaranteed critical staff were meant to continue a fully operative virtual workforce, he Covid-19 pandemic their operations, in case of disaster. as an optimal response to the lockdown created an Additionally, natural disaster with restrictions in building access and Tunprecedented emergency such a long duration were not staff physical presence. situation in Albania and worldwide. thoroughly detailed in bank’s DR Out-Of-Office hours’ activities, The government, central bank, and BC plans. such as: monitoring and ensuring financial institutions and local The response to these 24/7 ICT services, execution businesses had to immediately challenges and the success of this of the End-Of-Day procedures, focus their best efforts on the urgent abrupt adaptation, had a strong provision of call center and other response and crisis management, dependence on technological customer support services, trying to build viable and worthy capability, digitalization and represented another challenge solutions to address the emergency information security maturity level that was successfully overcome first, and the long-lasting impact of within each organization. Such with the support of various remote crisis afterwards. critical period of time mandated an technologies. During this critical period, extensive usage of digital channels, The extensive use of digital internet and technology usage remote access technologies and channels throughout this period, was became more crucial and its use other tools and systems, such as: another confirmation that previous have increased dramatically. Public collaboration tools and workflow investments on this area sustained and private entities used their best management systems. the fast remodeling of electronic technological innovation know-how The activation of “Work-From- services to enlarge the customer

July 2020 Bankieri 31 www.aab.al

reach. Also, digitalization helped on same time the elevated attention of relevant technologies, legal the disruptions’ level minimization, of the public, Government and framework and the current retaining the quality of service the Central Bank. The Covid-19 achievements in the digital within accepted levels. Applying pandemic economic crisis and its transformation, there are still a mixed approach, using physical effects have impacted working and issues that require immediate and virtual workforce, required business environment worldwide. attention and solution. The most not only efficient monitoring tools, However, this unprecedented important one is the accurate but also represented the evident situation, the challenges faced and empowerment of the remote usage need to review and optimize the way that they were overcome, of “digital signature”. Albanian banking processes and accelerate played its role in determining the legislation covering digital services the achievement of a full level of irreplaceable role of Information (e.g. remote process of signing the digitalization. Technology. It pinpointed the role of banking contracts through digital Due to service time restrictions, resilient and streamlined processes signature) exists, but it is not set by the government regarding the and the areas of immediate need for exhaustive in terms of well-defined on-premises services, technologies investments and improvements. legal technicalities. In addition, the like queue management and call absence of secondary legislation, center systems, provided a great regulatory framework and the total contribution on the management lack of judicial practice, leaves and control of the large customers’ room for uncertainties and different flow. The introduction of online The last miles of “Digitalization legal interpretations. surveys for employees guaranteed Journey” can be accelerated Open Banking Technological compliance with the protocols Ecosystem is becoming the target under the proper attention and set by Authorities. Moreover, the banks’ operating model that would use of technological tools helped sponsorship. The necessity to bust the digital transformation respecting the physical distancing, adopt law amendments that in the country. In addition to the ensured the social distance would improve the existing businesses and Central Bank, minimization and also helped in banks’ ICT Systems need to interact legal framework and facilitate monitoring health and wellbeing of with Government technological staff and customers. the digital transformation was environment (e.g. e-Albania), Another challenge faced by highlighted, due to the increased aiming to automatically retrieve the the banking sector and their ICT awareness of the main key necessary customer information. structures, was the necessity to Therefore, necessary technological players, including governmental cope with the immediate economic and legal improvements on this impact of the crisis to existing and institutions and public entities. aspect, would support banks to potential customers of the bank. provide a fully digital experience to Regulatory requirements for the their customers. introduction of new processes and The timely resolution of these products, such as: loan moratorium important gaps will highly contribute application, financial instruments This experience demonstrated to achieve a fully digital business covered by sovereign guarantee and that the last miles of “Digitalization and operating environment in “war salary” timely execution, were Journey” can be accelerated Albania. Consequently, the banking successfully implemented during under the proper attention and sector could be considered as this period, through automation and sponsorship. The necessity to an influential promoter of digital digitalization of different processes. adopt law amendments that evolution, contributing to the Adaptation of existing applications would improve the existing legal increase of the public trust in and processes, designed to serve framework and facilitate the digital the digital era. The design of a and be in place, even after the transformation was highlighted, smart “New Normal”, will provide pandemic situation, contributed to due to the increased awareness advantages and new opportunities guarantee a proper and structured of the main key players, including to the banks and business, toward a response to the high customer governmental institutions and fast recovery and a brighter future. demand. These requirements were public entities. duly delivered, satisfying at the However, despite the existence

32 Bankieri July 2020 www.aab.al BANKING SYSTEM Internal Audit Challenges, during Covid-19 crisis

It is a great opportunity for Internal Audit role and function to be stronger and professional, to really add value to managements by protecting and improving our organizations by being healthy businesses with new controls and risks frameworks, but in the same time flexible and effective.

economy. pressure on operational capacities, The remaining uncertainty by activating their business on the severity of the crisis, the contingency plans. Nevertheless, length of recession and the speed it’s obvious that crisis is expected of recovery will make it difficult to affect asset quality and, to assess the potential impact of consequently, profitability of banks the crisis on the banking sector. going forward by growing non- Nevertheless, the focus will performing loan (NPL) volumes. now be on the re-opening of the Steps to transition toward “a new economies, businesses, and banks normal”, guided by health principles (with new present risks of health and economic considerations will be from now on, the focus of bank’s managements. The path from post- lockdown to “business as usual”, Dorida STAMBOLLA1 via lessons learned, will lead to Head of Internal Audit Working in the office or in a new ideas and opportunities. RAIFFEISEN BANK ALBANIA remote environment does no The same applies to the Internal longer differentiate, as the Audit role. Hence, it’s important how to mitigate risks on a new meeting point with our customers/ he coronavirus pandemic designed control environment, is causing not only a public colleagues/auditees, is the online educate stakeholders on changes Thealth crisis but bringing with platform, as the new way of of processes, procedures, it a great economic and financial working and providing advice & platforms, being more pro-active, shock with enormous challenges. involved, and trusted advisor to recommendations to make better Gross domestic product (GDP) is our managements. The 3-lines of expected to significantly impact processes with efficient controls. defense will need to further improve the worldwide economies. The cross-functional communication magnitude of the contraction in and collaboration, since risks and each country will depend on how controls have now changed and successful that country is, in adapted to the new situation. Based limiting contagion and preventing and safety, compliance, legal, on our experience, internal audit second or further waves of this security, technology, operations, did not have to move to the 1st or/ virus/es, the duration of the and fraud etc.) and 2nd line of defense, that would measures implemented to limit In contrast with other previous jeopardize its independence. social contact to home-office crises (2008/2009), banks entered Now it is time to transform continuity and the effectiveness of the health crisis with strong capital and digitalize our Internal Audit the actions taken to support the and liquidity and managed the function. We all work distantly

1 Chairwoman of Internal Audit Committee on the Albanian Association of Banks (AAB). Board member to the Institute of Internal Auditors profession in Albania (AIIA).

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www.aab.al

and remotely, but we should scope, reshuffling timelines, etc. aim to stay connected, adequately stay connected, since tools and Yet, this is dependent from the manage such situation and promote technology are widely available, organizational structure, audit Internal Audit profession. move forward by understanding division, as well as the auditees’ According to the Definition changes within organizations, units. Therefore, we need a case- of Internal Auditing in the IIA's reviewing and adapting our risk by-case approach and prioritize, International Professional assessments and plans, be agile by being more flexible, in contrast Practices Framework (IPPF), by prioritizing our audits and our with our traditional approach and … “internal auditing is an own processes, use data analyses plan. Now we could utilize the use independent, objective assurance on our daily work (robotic analyses, of “remote audits”, not only during and consulting activity designed business intelligence), explore new preparation and drafting phases, to add value and improve an skills of our employees and identify but also on the “on-site period” with organization's operations. It helps talents on our teams, use launched online interviews and verification, an organization accomplish its on-line trainings, transform our audit documentation checks and objectives by bringing a systematic, technology, help our organization samples, etc. Working in the office, disciplined approach to evaluate and clients through all these new or in a remote environment does and improve the effectiveness of challenges. no longer differentiate, as the risk management, control, and With the “new normal” – meeting point with our customers/ governance processes”. distant/remote auditing, we need to colleagues/auditees, is the online These are extraordinary times ensure, if there are audits that have platform, as the new way of which requires extraordinary fixed deadlines set by regulators, working and providing advice & leadership and professionalism. for which we need to keep going on, recommendations to make better It is a great opportunity for as long as no additional information processes with efficient controls. Internal Audit role and function to on postponements/new final May is the International (global) be stronger and professional, to deadlines from regulators, are month of awareness about the really add value to managements communicated. There might be profession of the Internal Audit by protecting and improving our audits in areas which are crucial within the Organization. As such, organizations by being healthy and very busy on business and several events are organized businesses with new controls and operations activities, for which worldwide, accordingly. We are risks frameworks, but in the same postponements and reshuffling a considerable community of time flexible and effective. of the audit plan might be the internal auditors, also here in As Socrates says... “the best solution. Therefore, new risk Albania, both in the private and only thing I know is that I know assessments need to be used. public sector. On-line meetings, nothing… and that your controls are Based on experience, a solution webinars, sharing experiences etc., abominable” or Voltaire says… “if can be audits, applied in a different have been organized by AAB, AIIA, Internal Audit do not exist, it would mode, such as: reduced and focused universities etc., with the main be necessary to invent it”!

July 2020 Bankieri 35 www.aab.al EXPERTS'S FORUM Beyond Covid –19: New opportunities for the Albanian FinTech-sector

In addition to the banking sector, which is one of the most important actors in cooperation with EasyPay, in recent months there has been a significant increase in interaction with other institutions, aimed at digitalizing services and expanding their clientele, which favor and mainly use mobile phone channels to effect financial transactions.

SMEs, by offering them various payments, as well as ticket choices, in payment methods, as payments for various events. well as by increasing the financial Particularly, in March 2020 the involvement of local population. number of transactions through EasyPay platform doubled, while The challenge of confrontation: the number of new customers Albanian FinTech against Covid-19 tripled. Now the time has come for If we look positively beyond the online payment market, even by Covid-19 crisis, we can dare say phone use. Global well-known that consumers will most likely FinTech companies, like: Paypal, return to the FinTech sector, for Amazon Pay, Apple Pay, Alipay three main reasons: lower costs, and Google Pay, have provided ease of use and faster real-time facilities in making payments and service! Jonida KËLLEZI financial services, especially in this Head of Marketing Department period, thus reducing costs and “FinTech or die” EASYPAY bureaucracies, and on the other The model that EasyPay offers hand, providing convenience, ease to increase financial inclusion and of use, speed, and above all, security cooperation with different sectors by carrying out transactions from of the economy in the country, he situation created, quite home. Comparatively, the same is is: Focus on digital services: suddenly, by the global expected form the new Law "On payments made through digital Tpandemic at the beginning Payment Services", in our country. channels and smartphones (in real of 2020, but also by the fact that It will be a decent regulator, time); simple integration (ready-to- the Albanian population has low especially for FinTech companies; a use API); a wide network of agents access to financial services, made promoter of innovative competition and stores (especially for deposit the Parliamentary Commission in the financial and online sector; and withdrawals); automated for Economy and Finance to it will guarantee the protection processes and low costs. This approve, on April 30th, 2020, the of customer data, through the model helps the challenge that draft law "On payment services”, implementation of security Bank of Albania, in cooperation which harmonizes the Albanian measures, such as: multifactorial with other state institutions and legislation with the EU directives verification, as well. the World Bank, aims to achieve and embraces the developments of by 2022. Specifically, two are the financial technology. For 10 years in a row, EasyPay strategic objectives already set: To regenerate the economy has been providing convenience 1) Achieving the coefficient of 10 and sectors most affected by to Albanian consumers and payments with non-physical cash this crisis in Albania, payment businesses, in making utility per capita (from the current 4.3), operators play, undoubtedly, an payments, such as: payment of and 2) reaching a bank account/e- extremely important role. Over the energy and water bills, taxes, money ratio, in the amount of 70% past few months, they have come mobile phone recharge, fixed (from the current 40%). as a valuable supporter for the telephone, internet and IPTV In addition to the banking sector, Albanian businesses, especially payments, microcredit installment which is one of the most important

36 Bankieri July 2020 www.aab.al actors in cooperation with EasyPay, new products/services. experience showed that in the in recent months there has been a Specifically, during the lockdown Balkans, and especially in Albania, significant increase in interaction period, remittances became a where the FinTech ecosystem still with other institutions, aimed at difficult mission. In many countries, needs to be consolidated, state digitalizing services and expanding agents/service points for money institutions must play a more their clientele, which according to transfers worked with restrictions, active and instrumental role, in McKinsey Global Institute the new by creating long queues, and at order to achieve wider cooperation generation (the end of GenX and the same time, operating hours between the consumer, young Millennium) favor and mainly use were shortened. May years of financial actors, banking system, mobile phone channels to effect experience in the remittance as well as SME businesses. financial transactions. market, with global partner like Technology is here to enable "easy- Specifically, in 2020 additional RIA Money Transfer, offered to-understand and accessible collaborations with microcredit EasyPay the opportunity to develop services by anyone, which reduces institutions were added on the this service through technology: user costs and barriers to access." EasyPay platform, such as: NOA instant payment transfer via By improving access and ease of and IUTE Credit, who appreciated mobile and agents. Such service, financial services for individuals the importance of digitalizing which is expected to go live in late and businesses, including small their services and benefited summer, will help individuals and and medium-sized businesses, from EasyPay's wide distribution businesses, particularly located in technology promotes economic network (agents) (especially for remote areas from bank offices, development. remote areas from city centers). ATMs and payment operators, EasyPay will be loyal to Furthermore, during the first to reimburse a customer for a strategic objectives of the future months of 2020, EasyPay expanded canceled service, paying someone and will continue to simplify the its service portfolio, by entering the for groceries, sending money to financial interaction between insurance market. Licensed by the children, or parents, etc. consumer and business, through AFSA as an agent for some of the Although that should have online products and services, thus largest companies in the industry, happened some time ago, it took this achieving the financial inclusion of EasyPay began this journey with pandemic situation for the Albanian the whole society on the one hand, Sigal Uniqa Group Austria. The businesses to integrate technology and the creation of a new group of success of such collaborations into their strategies. This year customers, on the other hand! lies in optimizing the consumer experience. By putting ourselves in the shoes of the consumer, the EasyPay team devised and created digital services and products that meet the financial needs of the market.

Post Covid innovations The main issue, during the first quarter of the year, for any company in the market, was the management of the unknown! The situation created by the global pandemic of Covid-19 and the drastic lockdown measures, undertaken by all governments in the world, affected market developments. However, this situation brought new opportunities for FinTech businesses, collaborations with new sectors and the creation of

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38 Bankieri July 2020 www.aab.al EXPERTS'S FORUM Trainings – challenges and opportunities during pandemics

Our goal remains to organize virtual classes, similar to face-to-face classes: they need to be engaging, interactive, and productive.

Following the halt of planned experts make it impossible to resume activities, we had to review the previous normal physical training, until calendar and assess whether the needs September. had changed, so far. At the same time, However, thanks to the cooperation trainers had to review the methodology, with international partners: ATTF and versus the results and whether they House of Trainings (Luxembourg), still worked for the new reality. Being as well as with the financial support aware that interaction with participants of the Government of Luxembourg, required preparatory work and not we launched the "Distance Training just ordinary communication, we Calendar", thus creating new ways began planning preliminary sessions of learning to enable continuity of the to support participants individually, or transfer of knowledge by international in small groups, to practice or confirm experts, despite current difficulties. understanding of the technologies that Courses are divided into two main Junida Tafaj would be used for online trainings. categories: virtual and e-learning, Operations specialist AAB has been cooperating with where all applicants from the banking ALBANIAN ASSOCIATION OF BANKS, AAB local and international partners sector will become part of international for years, to contribute for capacity classes, professionally organized by the building of the financial sector. In ATTF team. he pandemic has completely addition to the situation, AAB managed Also, for the first time in cooperation changed our way of working and, to announce the first online trainings, with AIEx, we organized online Tat the same time, the management at the end of April 2020. We decided to training, in the Albanian language with of learning and development, within the arrange groups in manageable sizes; Albanian experts, on a professional organization. An urgent need arose for virtual classes are very challenging learning platform, called AIEx LMS. adaptation to a new reality. Although it when in large numbers. We advised Technically, AIEx LMS enables may seem somewhat inappropriate to experts to start with presentations, to trainers to move between tasks and write about training, at a time when the introduce the convenience of technology feedback simultaneously, by sharing economic consequences of pandemics to participants, and also to plan and supervising them. Participants are being discussed, it should not be discussions and early interactions, to immediately get their grades back. forgotten that the issue of a continuing test the connection, as a way to build Face-to-face training, led by a education and development are still engagement during further sessions. trainer, remains the preferred method, essential. Our goal remains to organize as human interaction is important. At But how could we guarantee virtual classes, similar to face-to-face a time when many organizations are continuity when everything stopped classes: they need to be engaging, not abandoning the conventional way, working? It was crystal clear from interactive, and productive. traditional face-to-face learning is the start: providing distance learning While the reopening, or removal of combined with e-learning methods, required more than just Skype meetings, lockdown measures, gave hope for the so that participants reach their full or video recordings; you can’t replace resumption of activities in the country, potential. Basically, the goal is to face-to-face learning with the online the "temporary" travel restrictions, promote real change, by engaging staff. version, so simply! You cannot do the which have closed the skies of Europe, We already have all the models, same things, simply by using a different are still in force and it seems that they elements and tools to provide online method. We already had to change the will remain in force for an unpredictable learning opportunities; we just have way we perceived the construction of time. The logistical difficulties and to start working hard to use them knowledge. limited availability of international efficiently.

July 2020 Bankieri 39 www.aab.al SOCIAL DEVELOPMENT GOALS

the framework of COVID-19 Prevention Awareness Cam- paign. ABI Bank: • Supported Diaspora Publ- • On April 24th, donated three ishing Center for publishing respiratory devices for the Albanian-Ukrainian Dic- intensive care, which will tionary, which has been support the health system to published and distributed increase its capacity to cope to children of the Albanian with the situation created by diaspora, up to 6 years in COVID-19. Ukraine, in order to promote • Supported Durrës Regional the Albanian language for Hospital with protective children of the diaspora in materials and clothing for Ukraine, as well as 14 classic hospital personnel. fairy tales, adapted in Albanian and Ukrainian, for 5-8 year • During April – May, following old. These tales have been the requests from the Albanian published in 7 different books Red Cross, Kamza Municipality and have been distributed in and the Association for the Albanian diaspora. Integration of Pensioners of Albania, it donated over 600 food packages to Albanian families in need and lonely pensioners in conditions of extreme poverty in Tirana, Vora, Kamza and Paskuqan. • Credins Bank joined the Red • Supported, for the second Cross, Tirana branch, by consecutive year, the Podcast donating some food packages series: "Wonderful Albanians", to families in need, during the a collaboration between ABI pandemic period. Bank and Rudina Xhunga, • Supported the Healthcare which reveals success stories Operator, by donating several of Albanians at home and computers to improve working abroad. and infrastructure conditions of the institution. • Supported the “Green Bal- conies” project, in cooperation with “People and Ideas” organization and Tirana Municipality, an initiative to increase the construction of Banka Kombëtare Tregtare: green spaces on the balconies • Donated equipment to improve of the capital and to turn IT infrastructure, aiming balconies into a pleasant space at promoting technological for every family and a relaxing innovation in institutions: Rr- work corner. ogozhina Regional Educa- • Joined the initiative of Kruja tion Directorate, Liq-enas Municipality to increase green Municipality and Peqin Penit- areas in the city. entiary Institution. • Supported the Albanian Emb- • Supported the Albania-Turkey assy in North Macedonia, by Chamber of Commerce purchasing 4 publications and Industry (ATTSO), in of "Testimonial from the

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Presidential Cabinet", demo- • While on lockdown, where nstrating support for art, as an many Fibank colleagues were important sector to increase in continuous availability to the impact of art and culture in ensure branch functionality, society. Fibank took all the necessary • Supported the realization of safety measures in accordance "VIZart" event, an exhibition with government guidelines to that brings together the works protect the lives of its most of 50 Albanian maestros, important resources, Fibank belonging to different gener- staff and its customers. ations, from Kodra, Jukniu, Kilica, Dhrami, Shoshi, Lulani, • Fibank launched products to Keraj, Madhi, Mele, Leka, e better serve customers’ needs many well-known artists, including Mr. Helidon Haliti, during the pandemic situation the organizer of this exhibition. such as: • Supported the "Green - Pensions at home - Business Competition", in collaborating with the collaboration with Partners Albanian Postal Service to Albania, which promotes send pension funds to the innovation, by utilizing pensioners’ homes so that local resources, promoting they can minimize branch economic development, incr- exposure. easing employment, and - Express issuance of building a greener region. contactless debit/credit "Rinora Handmade" as one of cards – enabling customers the winners of this competition, to minimize contact with daily was supported to expand the cash usage. business with new products. - Special current accounts – for all affected employees receiving aid from the government relief package. - These products enabled customers to minimize contact with daily cash usage and have immediate access to their bank account funds.

• During the announcement of • Fibank Albania joined the lockdown from the government Down Syndrome Albania due to Covid-19 global humanitarian campaign pandemic, Fibank Albania #Bashkepertendihmuar, to launched game a social media help with food and hygiene #fotofamiljaregazmore until packages for 60 families in April. The goal of this game was need in the region of Mat to invite people to bring images covering villages of German, of their families during this Suat, Komsi, Burgajet, Derjan, period and at the same time be Shulbater and inside the part of a winning competition. town of Burrel, as a means to This initiative served as a alleviate the pandemic effects. means of encouragement and support and was well received by Fibank fans.

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in Albania all citizens, who have the right to benefit from financial assistance, and offers the following package, aiming to offer its support in • On International Book and this difficult period: Copyright Day, on April 23rd, - Free Opening/Closing curr- the bank sent an awareness ent accounts, card to employees with the - No minimum balance requi- slogan: Books are a window to red in opening a current see the World! account, • World Day for Safety and - Free Digital Banking Plat- Health at Work was promoted form, on April 28th. - Current Account and VISA • The bank came up with the INSPIRE Debit Card, without "Share your Smart Story" monthly maintenance fees. initiative, which invited all • Promotes International colleagues of the group, who Children's Day, on June 1st. worked from home, to share • Promotes International their personal experiences, Environment Day, on June 5th. during the quarantine period. • Shared through its official • On May 1st, Intesa Sanpaolo Facebook website various Bank Albania conveyed a examples of online scams and special thankful message to how they can be prevented, its employees, especially to all by drawing public attention those who did not stop working about the importance of online any time. security. • During the pandemic days, • Promoted World Ocean Day, when each movement was on June 8th. highly limited, the group • On World Blood Donor Day, organized a guide set, called June 14th, a group of bank Digital Coach, which serves employees and two of their as a very good instructor on wives donated blood for how to organize a working thalassemia children, at day at distance, without losing the premises of a private attention to health care, while laboratory, made available by maintaining fragile work-life Dr. Natale Capodicasa. balances. • Promoted World Refugee Day, • Promoted International Family on June 20th Day, on May 15th. • On International Technology and Information Day, May 17th, it provided a range of online services, as well as the continuation of work and school from home around the world. • Promoted World Day for Cultural Diversity, Dialogue and Development, on May 21st. • Promoted International Biodiversity Day, on May 22nd. • Welcomed at all its branches

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• Paid special attention to elderly people living alone, or through economic hardship, by donating 350 food packages. The bank supported two annual • Provided computer equipment competitions, organized by Tirana for the offices of Center for Business University (TBU): Studies and Publications for • Tomorrow's Entrepreneurs, Ed- Arbëresh, which focuses on ition 10 - where participants studies and publications for presented, individually or Arbëresh community. in teams, business ideas • On the occasion of National elaborated in simplified Day of Orphans, May 20th, the business plan forms; bank supported the puppet • Lawyers for Tomorrow, Edition show: "Nightingale and Rose" 6 - in which individuals, or for children of "Zyber Hallulli" teams, delivered subpoenas Orphanage, Tirana. This show and defenses /rebuttals for a was held in several orphanages legal causes/issues. and social centers, throughout OTP Bank Albania supported Albania. financially one of the first prizes, • Supported the National awarded to participants in this Theater during the artistic activity, and became an active calendar of the year, the online part of juries that assessed the performances of the project: quality and creativity of the idea "The show must go on", as presentation. well as the artistic production dedicated to young people: "TK RIN ART ON". • Supported the Puppet Theater's artistic calendar, by entertaining and educating younger generations through art. Raiffeisen Bank: • Planted 250 trees on Kombinat – Vaqarr road axis, by supporting Tirana Municipality's project to increase green spaces in the capital. • In cooperation with the Free Thought Forum, some 4 • In cooperation with Kamza actions were taken to clean Municipality, distributed food Spille, Tale, Zvërnec and the packages for 100 most families Lalëz Bay beaches. A special in need, in the Kamza area. contribution, as every year, • Provided equipment and was given by bank’s staff. interior furniture for Piskova • Donated some protective Health Center, Përmet. equipment such as: masks, • Supported and showed special clothing and goggles, solidarity with the Bank of to Durrës Regional Hospital, Albania normative act to thus supporting medical staff evaluate every customer, who of this hospital. has been directly affected by

July 2020 Bankieri 43 www.aab.al AAB ACTIVITIES

the pandemic and thus being unable to make timely loan AAB activities in regard to Covid-19 installment repayments. Also, the war salary brought In the frame of global precautions • Temporary suspension of the to Tirana Bank branches a for the COVID-19 Coronavirus, the implementation of the obligation large flow of customers to banking sector was among the derived by the requirements on open their accounts. Branches first to impose security (health) credit risk management for loan responded professionally to measures, aiming at protecting the classification and provisioning to each application, respecting health of clients and employees, all categories of customers, for an all hygiene measures. despite the cost related to them. additional period, from June 1st, • On April 15th, it signed with On March 17th, following the Decision to August 31st, 2020, due to the the Ministry of Finance and of BoA’s Supervisory Council, the financial difficulties and solvency Economy the Agreement on joint order of Prime Minister and deterioration of borrowers affected State Guarantee, which will be BoA’s Governor, authorizes a three- by the situation; used to cover the financing of month loan payment holiday for • Temporary suspension of the salary fund that businesses businesses and individuals, who creation of reserve funds for real will receive at Tirana Bank. are faced with difficulties, as the estates obtained versus the loan • Offered to all business and result of COVID-19 situation. The payment, until December 2020; retail customers the use measures on rescheduling loan • A mitigating provision on rest- of Winbank platform, with instalments entered into force on ructured loans, according to which preferential terms, as a very March 13th, 2020 and will be in force banks are enabled to restructure secure platform, during till May 31st, 2020. AAB coordinates current loan agree-ments, in order the time of pandemic. All the data collection process. to find adequate solutions, without customers can transfer funds Some banks have pushed and deteriorating the status of the from her/his account to one promoted the use of digital channels, borrowers; account in another bank, in addition to this three-month • Extending by 1 year the entry into without commission. loan payment holiday measure, by force of tighter requirements for • The situation at hand put waiving online service commissions the classification and provisioning in the spotlight the "War (home and/or mobile banking), as of restructured loans, until January Heroes" category, by well as cash withdrawals at other 2022. This measure enables banks designing a preferential banks' ATMs. to use in 2021 the same criteria for package of products and AAB cooperated with the Ministry of the classification and provision of services, with preferential Finance and Economy, regarding the restructured loans as those before terms and services with zero Sovereign Guarantee instrument the pandemic; and commissions. The package of for the companies affected by the • Extending by 1 year the effects heroes included: unsecured financial impact of the pandemic. of the Regulation “On out-of-court consumer loan, overdraft, On May, the Albanian Association of treatment of distressed borrowers”, Payroll Package, 25 Monthly Banks, the Bank of Albania as the until January 2022. These relieving Deposit, Debit Card, Credit supervisory authority, with respect measures will provide banks Card, or services such as: to the analyses and considerations with more time to find the most direct debiting and payment of proposals presented by banks, appropriate solution for joint order. as well as based on the best distressed borrowers. experiences of other countries Meanwhile, borrowers whose and the guidelines, issued by the solvency is neither affected nor European Banking Authority (EBA), damaged by this situation should has adopted some amendments to normally continue to pay their the rules on credit risk management liabilities to banks. by banks, mainly through:

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facing in the new reality, supporting new laws: “On Collective Investment borrowers in need, without Shcemes” and “On Capital Markets compromising lending criteria and in Albania” adopted recently by the maintaining the soundness of the Parliament, were discussed. AFSA and AAB representatives showed the willingness to cooperate and organize joint activities to ensure financial education for all financial market participants.

The AAB Chairman, Mr. Silvio Workshop with General Tax Dire- Pedrazzi attends the meeting: ctorate “Bank – Business relationships: A workshop on Automatic Exchange Common economic challenges in of Financial Account Information face of global Covid-19 pandemic” took place on June 25th. Following On May 13th, 2020, the Bank of concerns raised by several banks, Albania organized a forum with balance sheets. AAB and GTD organized the online the banking system and business Power breakfast with AFSA Gen- meeting focused mainly on IT community representatives. In his eral Executive Director issues. speech at this meeting, Mr. Silvio Mr. Silvio Pedrazzi, AAB Chairman Pedrazzi, AAB Chairman of and CEO of and the General Executive Workshop with Bank of Albania of Intesa Sanpaolo Bank Albania, Director of Intesa Sanpaolo Bank On June 19th, AAB, in collaboration emphasized the responsibility, Albania, accompanied by several with Resolution Department of professionalism and commitment CEOs of commercial banks, held Bank of Albania and upon the of the banking sector in this a power breakfast with Mr. Ervin request from banks, organized an extraordinary situation, ensuring Mete, CEO of Albanian Financial online workshop, related to the the full range of financial services, Supervisory Authority (AFSA) draft regulation: “On the minimum in response to the needs of the and other representatives of the requirement for regulatory capital community. He highlighted some institution. During the meeting, and eligible liabilities”. of challenges the banking sector in various legislative matters, as the

TRAININGS AAB organizes trainings April - June 2020 Credit risk and cash flow analysis, organized by AAB and ATTF Luxembourg on May 13 – 14th & May 20-21st 2020. Time management and productivity, organized by AAB and Lincoln Center on May 14 – 15th. Positive aspects of the out-of-court dispute resolution for resolving Insolvency - Building Awareness of the Business Community, organized on May 14th, by IFC in cooperation with AAB and with the support of Swiss Embassy. Sales skills and management. On June 2-3rd & 9-10 th, AAB, in collaboration with AIEx, organized for the first time the on-line training in Albanian language in the LMS platform. Toward the new Reality- Leadership Resiliency. organized on June 23-24th, in cooperation with AIEx. Creating a Culture of Employee Engagement. an online workshop was organized, on June 26th, with Dr. Larissa Winter and supported by the AAB, DIHA and AIEx. On May 7th, AAB launched the House of Trainings – ATTF Distance Learning Calendar, and facilitated the banking system employees’ participation in relevant virtual trainings and e-Learning courses are, thanks to the financial support of the Luxembourg Government.

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