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My e-Journey - over 40 years. Part 2. All banking.

So once we in the early 80s saw how customers - with delight - started to use e-banking for bill payments and balance checking, we started to ponder what other services could be built on the economy of trust and economy of habit created. Adding economy of scope (buy more in one-stop shopping) and economy of repetion (learn once - use for more services).

The first additional service was buying and selling listed shares (-88), followed by investments in bonds and investment funds. Paperless loans (signed with login codes - almost all student loans..) were added in the 90s, e-mortgages in year 2000, followed by general insurance, warrants and time deposits. Eventually almost everything could be handled in the homebank - but more should have been done with e-power of attorneys etc.

The Internet version (-96) of e-banking improved the user experience - even if all the 250 000 users were not all that happy to see the trusted black & white old pre-Internet version replaced (it had to happen gradually).  As there were half a million e-banking users in Finland when Internet arrived we topped the global per capita Internet usage statistics for a couple of years. 

One interesting surprise was how popular a simple onehand SMS-based balance and transaction reporting service became when launched in the early 90s. This opened our eyes for how important the always-there and always-on mobile device was going to be - after a while. WAP-banking was the next step but did not reach big volumes due to high communications costs. GPRS made it cheaper and faster - but customers were so used and delighted with PC-banking - gradually more at home (as modems became commonplace) than in workplaces (very interesting still to follow on real time how logins dipped during lunchbreaks - and how fast new browser versions and mobile devices stepped in). 

The impact of the two first phases of e-banking was, that an early thinning of the branch networks could be done. Bank of Finland proudly reported that the cost of providing banking services in Finland was cut in half. Fierce price competition followed so most of the savings went to the customers. 

Lessons learned:

(i) Economy of repetition, economy of scope, economy of reuse, economy of trust and economy of scale are huge - but not often enough well understood - levers for customer benefits, sound profitability in banking and society at large

(ii) One-time login passcodes enabled workplace banking (as no installation was then needed). We should have used OTCs not only for signing loan agreements but for signing all documents - earlier than we managed to do.

(iii) We should have used more time for networking with the some times bank-sceptical public sector so that society at large would have benefited much more from our worldleading Internet usage in the 90s

(iv) One-hand simplicity can take off like a rocket in mobile

(v) Good-enough services and habitprisons lead to slower uptake of the next steps. In this case mobile. 

(vi) Customers do not realise that they pay every cent of costs in manual services until transparent pricing is introduced. More time should have been spent on analysing how much time (and travel cost) was saved thanks to workplace and home banking (Germany nowadays uses 25€/hour in impact assessment) and how the time saved can be used for creating value at work and at home.

This was the all-services & all-devises part - could be referred to as e-banking 2.0.  Part 3 will be more revolutionary. Interconnecting customers be a usable headline.







Comments: (1)

Bo Harald
Bo Harald - Transmeri, Demos, Real Time Economy Program,MyData - Helsinki Region 28 December, 2022, 18:40Be the first to give this comment the thumbs up 0 likes


Why cannot all service be in e-banking?

Equity trading added to Home-banking. Later a long range range of services - for private and corporate customers.



- Why can the Solo e-bank not have a back door – where customers step out strongly identified into third party services?

 Doable as KYC was in law already and log-on tool used two factor and one time code (OTC). E-id services introduced. 2017 used 100,9 million times. Estimate for 2019 - 150 million. Public sector services big user.

- Why are payment receipts needed when account statements have the same data?

Account-statement-as-receipt for automated accounting introduced (no receipts needed).



Why not Mobile?

Payments with voice synteziser and SMS balance reporting introduced.



Why is it not possible to pay real time from account in online-shopping?

E-commerce real time e-payment introduced – based on invoice payment solution. Dominating payment method in Finnish e-commerce.



- Why does loan agreements have to be signed on paper?

E-Signing (with login-OTC) introduced.

- If you can sign a loan with bank codes – why not a telephone contract?

E-signing service introduced.  Naturally legal and binding – also in employee role.

- Is it fair to load customers down with having to key in payment details- especially very long creditor reference number series?  

Consumer one-click-to-pay e-Invoicing introduced. Direct debit-like standing order added later. No need to use much more expensive and complicated SEPA direct debit. Available of course.



- If  you can make domestic payments from your home computer – why not foreign payments?  

Foreign payments introduced (10 times lower fees – and free of charge with SEPA).

- Internet in your pocket? 

E-banking went WAP.



Bo Harald

Bo Harald

Chairman/Founding member, board member

Transmeri, Demos, Real Time Economy Program,MyData

Member since

04 Nov 2008


Helsinki Region

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Banking Strategy, Digital and Transformation

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