Serbia’s banking sector is undergoing a pronounced shift toward mobile financial services, with smartphone-based transactions expanding rapidly while conventional electronic banking activity declines. Registered mobile-banking users reached approximately 5.45 million in the second quarter, representing a 13.2% year-on-year increase. During the same period, mobile banking transactions climbed 26.8% to 42.6 million. By comparison, transactions conducted through conventional electronic banking fell 3.1% to around 32.7 million. Combined activity across the two digital channels reached approximately 75.3 million transactions, an increase of 11.8%.
Branch networks face a changing role
The growing use of mobile services is changing how customers interact with financial institutions and could gradually alter the economics of Serbia’s extensive physical banking network. Branches continue to serve an important role, particularly while cash remains widely used and customers have different levels of familiarity with digital banking. However, the migration of routine payments, transfers and account-management activities to smartphones reduces the need for customers to visit branches for everyday banking.
Physical locations are consequently positioned to concentrate more heavily on services requiring direct interaction, including mortgages, investment products, SME relationships, complex lending and financial advice. For banks, this transition could reduce the cost of processing routine transactions while allowing employees to focus more heavily on activities that generate revenue.
Mobile platforms require broader technology investment
The expansion of mobile banking is also increasing technology requirements. Banking applications are evolving beyond basic balance checks and money transfers, with customers increasingly expecting access to instant payments, biometric authentication, card management, digital onboarding, consumer lending, investment services and personalised financial tools through the same interface. Reliability has consequently become a competitive factor. Banks that provide weaker mobile experiences risk losing customers even when they offer competitive interest rates or maintain extensive branch networks.
The development could intensify competition across Serbia’s banking sector, which has undergone substantial consolidation and now includes institutions with the scale to make significant technology investments. Digital services can nevertheless reduce some traditional advantages associated with bank size and branch coverage. Customers can increasingly open accounts remotely, meaning physical proximity to a branch is less important, while digital onboarding can lower the barriers associated with changing banks.
Competition expands beyond traditional banks
The customer relationship is increasingly centred on the digital interface through which financial services are accessed. This brings banks into competition not only with other financial institutions but also with mobile wallets, payment institutions, e-commerce platforms and technology companies.
Payments are a key part of this competition. As smartphones become the main tool for everyday financial activity, banks have greater opportunities to place additional products and services directly within their digital platforms. Serbia’s developing instant-payment infrastructure has further supported the shift by making digital transactions faster and easier. A bank that becomes a customer’s primary financial application can potentially offer consumer loans, insurance, investment products and merchant services through the same platform, reducing reliance on traditional customer-acquisition channels.
Cybersecurity becomes a central banking priority
The expansion of mobile banking also increases the importance of cybersecurity and operational resilience. Fraud increasingly involves social engineering, rather than attacks directed exclusively at banking infrastructure, while artificial-intelligence-generated voice and identity manipulation could make fraudulent activity more sophisticated. Banks therefore face the challenge of combining simple customer experiences with effective security controls. Customers want fewer barriers when accessing financial services, while banks and regulators require stronger measures against fraud, money laundering and account takeover.
Artificial intelligence could become another area of competition. Serbian banks have started experimenting with automation and advanced analytics, although the sector has not yet fully deployed AI across areas such as credit underwriting, customer service, compliance, fraud detection and internal operations. The expansion of mobile banking creates a broader digital environment in which such systems can become increasingly useful, as mobile platforms generate substantial volumes of structured customer and behavioural data.
Digital finance expands into the wider economy
The development of mobile banking has implications beyond individual financial institutions. Lower reliance on cash can increase payment transparency and reduce transaction costs for businesses, while digital lending can improve access to finance for smaller companies. More efficient electronic payments can also support e-commerce and reduce administrative friction for businesses and consumers. The profitability of Serbia’s banking sector provides institutions with financial capacity to invest in digital transformation, while the rapid movement of customers toward mobile channels is simultaneously increasing pressure to adapt.
The 26.8% year-on-year rise in mobile-banking transactions reflects a substantial change in customer behaviour, with smartphones becoming an increasingly important channel for payments and everyday financial services. Physical banking infrastructure remains part of the sector, but the primary customer interface is increasingly shifting from the branch and computer to the mobile device.
