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Small countries have many disadvantages - small home markets, small languages, smaller skill pools and smaller resources - to mention a few.
But they also have advantages - better opportunities for networking, smaller vested interest groups, better public-private co-operation, better agility - that they can benefit from - subject of course to having leadership that creates enthusiasm, co-operation and open standards. We have seen good examples of this - Singapore, Taiwan, Estonia - and when it comes to the digitalizing banking, payments and financial administration - Finland.
Bigger countries should use these as laboratories - see what works and how standards and services evolve - to form stepping stone after stepping stone (layers) towards a fully automated real time financial administration. All with natural links to the other side of the coin - e-commerce and e-government services.
Looking back it all started somewhere in the 60s -
1st Layer: a centralised but centerless strongly standardized payment service that created standards for giro payments, payment references, file transfers, account statements replacing separate receipts, salary payments to bank accounts, bank cards, ATM-operations - to mention a few early ones.
This strong tradition continued later with standards for Edifact, e-invoicing, e-salary, e-commerce-payments, e-id services and many ISO20022 initiatives.
2nd Layer: The above enabled fast development of e-banking- as payments were the first services. E-banking for large corporates was launched in 1979, SME and home-banking in 1982. Foreign payments and in practise all transaction services were available in PC-banking well before Internet.
3rd Layer: If the above created the base for cutting the cost of transaction banking in half the 3rd layer (using e-banking) started to build the base for cutting SME-administration cost in half. Here services like e-commerce payments, e-id services, e-invoicing, e-salary created entirely new and hugely useful ecosystems.
4th Layer: e-invoicing and e-id ecosystems (but also e-salary and e-payments) created the base for the next target: Ecosystem for fully automated and towards real time accounting, cash flow estimates and public sector reporting (VAT, anti-grey-economy etc etc). This holds enormous productivity, service improvement and stuctured big-data potential - especially as row specific EAN code card payment transactions can be obtained directlly from POS in e-invoice format!
5th Layer: building on real time accounting, real time cash flow estimates, real time ownership information from CDS-services and the national income register finance processes will be automated both for the SME-sector on and off balance sheet financing, housing loans and other consumer finance. This will of course also support risk evaluation for investments, partner evaluation etc.
Layers 4 and 5 are now in focus and much is happening every week. Interesting? Say No More.... Keep watching this space..and feel free to copy.
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Erica Andersen Marketing at smartR AI
04 November
Prakash Bhudia HOD – Product & Growth at Deriv
01 November
Ben O'Brien Managing Director at Jaywing
31 October
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