Gospic Plazina Stojs Partner Lana Stojs talks about banking and finance in 2025 in Croatia.
CEELM: What is in the pipeline in terms of legislation that you believe will have the most impact on the banking/finance sector in Croatia?
Stojs: Several legislative measures are expected to have a substantial impact on Croatia’s banking and finance sector. These include the implementation of the Digital Operational Resilience Act and the NIS2 Directive on cybersecurity and the transposition of the Consumer Credit Directive 2 into the Croatian legal system by way of a new Consumer Credit Act until November 2025, along with, perhaps the most pressing of them all, the alignment with the Instant Payments Regulation (IPR) which has to be completed until April, 2025 and by way of which Croatia is fully aligning with EU payment services regulations to improve security, transparency, and accessibility in the financial sector, making payment services faster, more secure, and more integrated across borders.
CEELM: Of the above, which ones are you/your clients most excited about and why?
Stojs: The IPR brings several key benefits for consumers, businesses, financial institutions, and the broader economy. The main benefits could be recognized as faster transactions, enhanced consumer experience, increased efficiency for business, financial inclusion, and cost-effectiveness. The evolving landscape will surely encourage competition within the payment services market, and the financial institutions in Croatia will need to innovate and differentiate their services to remain competitive, thus also opening doors to new fintech solutions. As the adoption of instant payments continues to grow, the benefits will likely expand, contributing to a more integrated, digital, and secure payment environment.
CEELM: On the flip side, which ones are you/your clients dreading the most and why?
Stojs: While DORA, which entered into force in February 2025, offers substantial benefits for the financial sector, its implementation poses certain challenges for banks. In terms of compliance requirements, DORA covers a broad range of areas, including risk management, governance, incident reporting, third-party management, and business continuity, all of which must be adequately addressed or enhanced. Further, given that many banks operate across different jurisdictions, complying with DORA’s provisions while also adhering to local regulations can be complex. Additional challenges lie within the upgrading of ICT systems and infrastructure while simultaneously adhering to robust cybersecurity measures, requiring banks to implement advanced security protocols. Finally, one of DORA’s key requirements is the management of third-party risks, including those related to cloud providers, outsourcing arrangements, and other external partners that provide critical services where the banks must ensure that their third-party vendors comply with DORA’s resilience requirements.
CEELM: What trends do you expect to shape the banking sector in Croatia in 2025?
Stojs: In 2025, the banking sector in Croatia is expected to further develop, driven by a combination of regulatory reforms, technological advancements, and evolving customer preferences. Digital transformation and fintech integration are expected to be dominant trends, and it is highly likely that traditional banks will continue to enhance their digital offerings. With the IPR and Croatia also moving toward a cashless society, banks are expected to adopt new technologies to accommodate digital-only transactions. Finally, sustainability and green finance are also expected to be in focus for the banks, as both regulatory frameworks and customer demand push for greater integration of ESG principles into banking operations. In 2025, Croatian banks will likely offer more green financial products, such as green bonds and credit lines that support sustainable projects, especially since, in February 2025, the European Green Bond Regulation was implemented into the Croatian legal system, thus aligning the Croatian legal framework with the European Green Bond Standard.
CEELM: What is the biggest challenge for the banking sector in Croatia at the moment, in your view, and what is the likelihood you’ll see it overcome in 2025?
Stojs: The banking sector is currently facing an excessive number of rules, requirements, and regulatory processes that need to be complied with. While regulation is crucial to ensure the stability, integrity, and safety of the financial system, overregulation imposes a range of challenges, such as compliance risks and potential penalties, regulatory uncertainty, and operational complexity. The possibility of overcoming the challenges of overregulation will highly depend on the quality of collaboration between the legislators, the regulators, and the banks. A valuable and impactful initiative in terms of simplification of certain regulatory obligations is the so-called EU Omnibus Regulation, the proposal of which is expected to be released by the end of February. The initiative recognizes the intersection between three European ESG regulations: the Corporate Sustainability Reporting Directive, the Corporate Sustainability Due Diligence Directive, and the EU Taxonomy regulation and aims to promote consistency, streamlining, and simplifying sustainability reporting requirements for businesses – including financial institutions – operating in the European Union by consolidating multiple sustainability-related requirements into a single framework.
This article was originally published in Issue 12.1 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
