Russian Bank VTB to Launch Digital Bank in VKontakte

Answer to Facebook, Russia's state-owned bank VTB will launch e-banking in the mobile messaging application of leading social network VKontakte, the company said. The Russian government has been seeking a technological solution to the problem of confusing bank transfers.

Since the U.S. and other Western countries imposed sanctions on Russia, the country has been cut off from global payment systems.

"VTB is focused on developing digital channels and alternative formats for servicing clients," deputy president-chairman of VTB's management board, Anatoly Pechatnikov, said at a briefing. "The development of our own technology is especially relevant in the context of geopolitical risks and international restrictions."

The digital bank enables customers to conduct daily financial transactions such as money transfers, bill payments, and cell phone top-ups through VKontakte's App. However, customers can only use the service through mobiles.

Russia is also launching Mir payment cards, but those are only available in nine countries.

At the same time, the Bank of Russia has developed the System for Transfer of Financial Messages (SPFS) to replace SWIFT, through which banks can make cross-border transfers with foreign parties via the system's Faster Payments System (FPS).

On March 1, Roskomnadzor, the Russian communications regulator, issued a list of foreign messenger services banned from providing financial services, such as Telegram, WhatsApp, Discord and Microsoft Teams.

VTB said the company will shut down its banking service, which was launched on Telegram in January, once the regulator makes a final decision.

"As of today, there has been no such decision, so the bank in Telegram works, although we have stopped actively promoting it."

(Source: Reuters)