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Bo Harald

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Bo Harald - ZEF, Transmeri, Demos, Real Time Economy Program

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e-banking making great progress

03 May 2009  |  4649 views  |  2

Check progress here: http://boharald.blogspot.com/2009/05/e-banking-and-payments-in-finland.html

Not bad for population of 5,3 million - but then we started in 1982..This will naturally happen everywhere. Also the 3rd party services - "connecting customers" - with services like e-id, e-signing contracts, e-commerce payments, e-invoicing, e-salary, e-pension etc

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Comments: (4)

A Finextra member
A Finextra member 04 May, 2009, 07:00

 

Your blog about "e-banking in Finland starting in 1982" made me step back a bit in disbelief. I recall that in 1995, I had to pay for a partial T1 to be installed at my home in San Francisco to access the internet. So, I thought, what kind of e-banking in Finland starting in 1982 is Bo Harald referring to? I then googled "what is e-banking" and came up with this :

"Electronic banking is an umbrella term for the process by which a customer may perform banking transactions electronically without visiting a brick-and-mortar institution. The following terms all refer to one form or another of electronic banking: personal computer (PC) banking, Internet banking, virtual banking, online banking, home banking, remote electronic banking, and phone banking. PC banking and Internet or online banking are the most frequently used designations. It should be noted, however, that the terms used to describe the various types of electronic banking are often used interchangeably."

So allright. If phone banking is e-banking then I am happy to announce that even my mother actually did e-banking even way before 1975. And this was not in Finland.

The take up of e-banking in Finland (web banking) is commendable. As studies have stated, this can be attributed to the technological advancement experienced over the years such as the growth in the usage of Personal Computers, reasonable pricing* charged by telecommunication companies for internet access, consumers attitude in taking up new technologies and geographical and weather conditions.

In Finland's case, as much as I enjoyed the blinding white of its 'winter wonderland' scene and the visit to a tavern at 3:00 pm (when it looked like it was midnight outside), I have to say that similar weather conditions as well as low-cost to access the internet would motivate me into doing e-banking (or phone banking).

*one article stated $20.00 per month.

 

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Bo Harald
Bo Harald - ZEF, Transmeri, Demos, Real Time Economy Program - Helsinki Region 04 May, 2009, 10:34

Marite,

E-banking for large corporates was launched in 1979 in Finland and e-banking for SMEs and private customers in 1982. Multidevice with one-time code from the outset - pushbutton telephones quickly overtaken by PC-banking (1984). Most banking services where included already in the 80s. Mobile services in 1992.  When internet arrived there where already 0,5 million PC-bank users - a fair share of the active population.

When you start early you have more time to learn from gradual progress.

Not really a question of wheather conditions - not differing from other Nordic countries. Some seem to believe that e-banking took off so early because people do not dare to go our because of the polar bears roaming in the streets....

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A Finextra member
A Finextra member 05 May, 2009, 05:12

"Finland was the first country in the world to offer telephone banking in 1982, on-line share trading in 1988, banking via a mobile phone in 1992, Internet banking in 1996 and banking using a WAP phone in 1999."

"It is clearly a unique situation in Finland and banks in other countries will not find it so easily to introduce similar services with a successful take up.  However, they can learn from Finland’s experience as it serves as an effective example of how to do it successfully.  Finnish banks have actively encouraged people to utilise new technology by making it cheaper to pay bills online and introducing a surcharge for cheques and other traditional banking services."

Finland as the first country in the world to offer telephone banking (in 1982)? Like I said, telephone banking existed well before 1982 in other countries. But if it claims to be the first, well then so be it.

Finland has an average population density of 17 inhabitants per square kilometre, after Iceland (3 per sqkm) and Norway (12 per sqkm). Sweden has 20 inhabitants per square kilometer. Indeed many studies and articles do mention that 'geographic reach' was another factor in banks decision to offer e-banking.

Now compare this with France's 109 inhabitants per square kilometre and seeing a bank in every other block in Paris. It is also noteworthy to mention the Minitel which was debuted in France in 1980 and by which french consumers could do online banking.

A remarkably thorough explanation of why Finland and Sweden are world leaders in e-banking is found in Matti Suominen's 21 page report. It describes the environment and circumstances which contributed to the success of e-banking in Finland and Sweden.

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Bo Harald
Bo Harald - ZEF, Transmeri, Demos, Real Time Economy Program - Helsinki Region 05 May, 2009, 14:28

Marite: "Finland as the first country in the world to offer telephone banking (in 1982)? Like I said, telephone banking existed well before 1982 in other countries. But if it claims to be the first, well then so be it."

I:

1. I am not claiming that Finland was the first to launch telephone banking

2. e-banking for large enterprises was launced in 1979 (TELEUBF)

3. e-banking for SMEs and private customers was launched in 1982 with pushbutton telephones and overtaken by PC-banking in 1984 - using one-time code e-id

4. PC-banking was then moving over to Internet in mid90s - with same safe e-id.

Hope this clarifies - it is not the weather/darkness/polar bears - or us being so clever - just starting very early - it takes time to change behavior in the mass market.

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