21 October 2017
Bo Harald

Good for society at large

Bo Harald - ZEF, Transmeri, Real Time Economy Program

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Innovation in Financial Services

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

In praise of NEGATIVE carrots...reissued

25 January 2013  |  3745 views  |  0


TeliaSonera (the leading Nordic telco) announced this week in Finland that they will increase the charge for sending paper invoices to corporate customers from 5 to 10€. Consumers are charged 1,90.

This clear policy is for sure to be applauded – good for all parties (and big time for society at large) – for the following reasons:

1. The cost saving for enterprises  (Sonera customers) by moving from handling paper invoices (or e-mail)  is estimated to be anything between 8 and 25€ each. Many have already set deadlines for anything but structured e-invoices – but it is a very good deed to speed up the move to cost savings for the remaining paper users with this nudge.

2. There is no reason for enterprises not to accept e-invoices – in practice all of them are using e-banking in Finland – and the convenience to pay with one click instead of having to key in lengthy reference codes and other details is more than obvious (e-invoicing also offers parametrable automatic payments and press “a” approval to mobile notification).

3. e-invoices enable automated accounting, automated cash flow estimates, automated VAT etc – more cost savings – but above all a real time view of financials

4. Digitalization of enterprises processes also produces digital reporting to the public sector – saving costs > lower tax (less debt) > lower cost for enterprises/more purchasing power for citizens > growth from home markets and more exports/less imports

5. Savings are massive (250bn+ on EU-level – easily) – but the real target must be to liberate work force for better jobs – more productive, interesting and better paid

6. e-invoicing is better service – not only saving customers costs but also improving interaction, followup, visibility and upselling

7. CO2 reduction is (all included) – according to recent study 300g net

Sonera is of course saving costs when their customers realize that paper invoicing has never been free (only not visible charged for). This cost saving will benefit their shareholders – but experience from the banking sector says that the lions share goes back to customers in price competition and more money available for upgrading services.

Other companies are following TeliaSonera’s example – hopefully this will become standard market practice. Some have taken the view that carrots should not be negative (calling them sticks..) – but plain carrots have proven to have one disadvantage – they do not work. And as this migration is so much needed as a base for cutting administrative costs in half – we need determined and brave moves.

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