Telenor has opened an online bank in Serbia as it looks to introduce mobile financial services into the Eastern European country. 

Telenor banka is the operator’s first wholly-owned financial institution and follows its acquisition of KBC Banka last year. 

In terms of services, the company is offering a multi-currency current account with a contactless MasterCard debit card. 

Thanks to an agreement with MasterCard, customers will be able to make money withdrawals and deposits through the bank’s own ATMs, in addition to others. 

Foreign money transfers and currency exchange at “favourable” exchange rates are also on offer. 

All transactions can be handled via an app on mobile phone, tablet or PC, while customers will be able to open their account at Telenor shops across Serbia. 

Serbia has a population of seven million, however Telenor said 80 percent of transactions are currently performed in cash. 

It added that half of Serbia's population uses Facebook, but only nine percent manage their finances online. 

Telenor also cited a 2011 report from the Boston Consulting Group, which forecast that by 2020 access to mobile financial services could increase GDP in Serbia by two percent. 

Kjell-Morten Johnsen, EVP and Head of Region Europe at Telenor, commented: "The launch of the bank in Serbia is conducted in close cooperation with Serbian authorities and represents a significant step in the company's financial service history.”

Telenor first entered the Serbian telecoms space in 2006 and now has 3.1 million customers. The operator is currently the market share leader by revenue. 

It reports its financial results in the country alongside those of neighbouring Montenegro. Revenues in the two countries rose four percent year-on-year in the first half of 2014.

[Read more: Telenor's revenues remain on the up as customers base grows]

Johnsen said the operator is evaluating whether to launch financial services in other Telenor markets in Europe. 

He commented: “As market conditions vary across Europe, the approach might be different from the one in Serbia.” 

Operators have found opportunities in Europe limited as mobile banking services have more chance of success in countries where there is a heavy dependency on cash. 

In March this year, Vodafone launched its M-Pesa service in Romania.

Telenor Group President and CEO Jon Fredrik Baksaas said: "Telenor banka is an example of how we can contribute to the digitalisation and development of society. 

“Mobile financial services are key to our Internet for All strategy, an ambition to connect the unconnected and built on our belief that the internet is for everyone. The mobile phone is the essence to simpler money transfers, readily accessible savings accounts, new methods of bill payment and even insurance products."

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