03.03.2020

Chambers TMT 2020: Trends and Developments. The Private Sector Perspective

Paweł Syguła

Online and mobile services

It can be clearly observed that business entities in Poland are shifting towards online channels for providing services. According to market studies, the e-commerce sector in Poland is worth nearly EUR11.5 billion and is expected to grow by another approximately 25% in 2019, according to estimates. At the same time, the legal framework governing e-commerce in Poland has not changed much in recent years, being affected mainly by the enactment of new laws by the European Union – for example, Regulation (EU) 2017/1128 of 14 June 2017 on the cross-border portability of online content services in the internal market, and Regulation (EU) 2016/679 of 27 April 2016, the General Data Protection Regulation.

Together with online spending, mobile payment services are constantly expanding and improving, making Poland one of the European leaders in this regard. Pay-by-link and cashless payments are extremely popular in Poland. As reported by the National Bank of Poland, 100% of point of sale (POS) transactions in the country provide contactless payment options. Last year also saw the launch of the country’s first-ever shops with no cash registers.

Further expansion of online services is anticipated in the future due to the increased availability of mobile devices and the development of the Internet of Things. Moreover, online sales and services appear to have received a further boost from the government ban on Sunday trading in Poland, which has effectively outlawed shopping in brick-and-mortar stores on almost every Sunday in 2020.

The switch to online and mobile services has likewise been reflected in the growing interest in “sharing economy” opportunities in Poland. The most striking example of this phenomenon is car-sharing, which almost tripled in popularity in the first half of 2019 alone. The demand for electric scooters is also on the rise.

Moreover, the number of passengers using mobile applications to order car services (such as Uber) has risen steadily. One interesting question is if and how the industry will be affected by new Polish legislation regulating passenger transport. Pursuant to the new provisions that came into force on 1 January 2020 (sometimes referred to as “Lex Uber”), taxi meters may now be replaced with mobile applications; however, all drivers require a special licence if they wish to provide passenger transport services legally.

Also worth mentioning here has been the emergence of the private remote healthcare sector in Poland, which has had to overcome numerous restrictions imposed by various laws, especially in terms of the legal framework governing data privacy.

Cloud services

Cloud services are gaining in popularity in the country. However, it is somewhat surprising that statistically only around half of all Polish entities use or intend to use cloud services in their business operations. These results are clearly inconsistent with global trends. The reason may be that the Polish cloud market is rather fragmented when it comes to cloud service providers.

However, this situation is expected to change in the coming years. In the case of IT contracts, more and more often we can expect on-premises arrangements to be replaced by cloud services. Business entities recognise the advantages of cloud services, such as improved compatibility between different systems and applications, a reduced infrastructure, etc. At the same time, however, certain cybersecurity issues must be properly addressed, especially in view of the relevant provisions of the General Data Protection Regulation.

IT sector issues

The Polish IT market is quite vibrant. A considerable number of foreign IT companies have decided to establish software development studios and research and development (R&D) centres in Poland. They include all the world’s top market players from the IT, media and telecommunication sectors. In addition, there are an estimated 1,000 Polish software development firms employing around 50,000 people. Polish software houses are especially active and successful in the gaming industry.

One noteworthy trend from a business perspective has been the significant increase in projects performed with “agile” methodologies instead of the “waterfall” approach. This, in turn, seems to be having an effect on settlement methods, thanks to a shift away from fixed budget projects to time and material settlements.

Another interesting development in the IT sector in recent years has been white labelling. Preparing ready-made IT solutions tailored to the individual needs and preferences of the customer ensures much greater efficiency and cost optimisation – ie, advantages constantly being sought by entrepreneurs.

Blockchain

Although blockchain technology has not yielded many cryptocurrency projects in Poland, it has undoubtedly attracted interest from many business entities. Given the potential of its local IT market, Poland could well become a reputable centre for developing blockchain-based systems.

Currently, the potential of blockchain technology is mainly being exploited by the financial sector (banks, peer-to-peer platforms, etc). One recent, interesting example of how blockchain technology is being utilised for commercial purposes is the Polish company Billon. In 2019 Billon became the first electronic money institution to be granted a licence by the Polish Financial Supervisory Committee. Billon created the first system based on distributed ledger technology (DLT) for business. Using blockchain technology as a platform, Billon devised a new protocol that allows national currencies to be registered in accordance with relevant laws and regulations, and it came up with a scalable solution for micropayments. We can expect Billon’s future fortunes to be monitored closely by other market players considering investing in blockchain technology.

Artificial intelligence (AI) and machine learning

Solutions based on artificial intelligence (AI) and machine learning are undoubtedly attracting much interest from many business entities in Poland. The most visible examples of commercially applied AI-based solutions on the local market include “chatbots”, voice search and virtual assistants. Machine learning-based user experience has become a recognised tool in the e-commerce sector. It is used to improve the selection of a company’s goods and services, enhance marketing communication and identify a company’s most valued products. Business entities pioneering such tools strongly believe that AI-driven solutions will become a vital factor in building relationships with customers. This outlook is also reflected in market studies, which reveal that by the end of 2020 up to 85% of interaction with clients will be handled by chatbots.

Big data, AR/VR

Big data is one of the most widely discussed issues among business entities in Poland. On the other hand, in contrast to global trends, the reception of big data solutions among Polish companies is relatively low. According to market studies, only a few percent of business entities in Poland report using big data tools and systems. On the other hand, approximately 60% claim to apply business analytics in their day-to-day operations. Consequently, the outlook is brighter when it comes to the application of big data tools on a more dynamic scale.

Interestingly, it is said that one of the biggest challenges in the near future is the monetisation of collected data. What is crucial in this area is the quality, not the quantity, of data as well as the added valued obtained within big datasets (“smart” data versus “big” data). Supposedly, further developments in this field may affect the choices and actions of business entities with respect to big data solutions.

Currently, big data solutions are mainly applied in marketing and e-commerce to better understand customer needs and thereby boost sales volume (data-driven marketing). Growing interest in big data solutions has also been observed in logistics and production, as well as in telecommunication and finance.

Apart from big data solutions, another tool that businesses believe can give them a competitive edge is “augmented reality” (AR). On the one hand, the number of virtual reality or augmented reality service providers has soared, and on the other business sectors are becoming keener to make use of VR/AR solutions in their products.

Other interesting issues

Importantly, the trend towards further digitisation in Poland has been mirrored in recent legislative changes providing for the mandatory dematerialisation of joint-stock company shares. This amendment has resulted in what has even been described as the “digitisation of the joint-stock company”. Pursuant to the provisions that entered into force at the end of 2019, every joint-stock company is required to run its own website, which should include the most important information about the company and a separate tab intended as a communications channel for shareholders as well as for publication purposes. Moreover, the new regulations provide for the mandatory dematerialisation of all shares, and this process should be completed by 31 December 2020. As a result, from the beginning of 2021 only persons entered in the company’s register of shareholders will be considered a shareholder. From the IT market’s perspective, the above legal arrangement could be an incentive for fashioning specialised services connected with maintaining electronic shareholder registers.

Since the beginning of 2019, the rules governing the maintenance of employees’ personal files have also undergone a radical overhaul. These revolutionary changes include the possibility of switching to fully electronic versions of file-keeping. In addition to shortening the mandatory storage period for employees’ personal records (originally this was 50 years following the termination of an individual’s employment), these regulatory innovations may help significantly reduce the costs of conducting business in Poland. Furthermore, maintaining employees’ personal files in electronic form necessitates implementing specialised software that allows for the digitisation of documents, electronic signatures, and storing and sharing such information in an appropriate manner. Digitisation of employees’ personal files is another example of how business entities in Poland are harnessing new technologies to perform everyday tasks.

[Source: https://practiceguides.chambers.com/practice-guides/tmt-2020/poland/trends-and-developments]

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