21 June 2018
Bo Harald

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Bo Harald - ZEF, Transmeri, Demos, 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.

Charge for it!

05 February 2014  |  2315 views  |  0

When we launched e-banking back in 1982 for consumers and SMEs at Union Bank fo Finland we pretty soon started to charge for the service. We thought that getting banking into homes and offices was worth paying a very small monthly fee for. Somebody even said that value and convenience for free is stupidity per defenition..

There still are of course loudvoiced protesters against any visible pricing and in this case it can even be argued that the cost savings by shifting work to customers is so big that the business case is there in any case (banking sector costs in Finland was halved). So some encouragement for transparent charging is perhaps needed. The reasons:

1. New services cost money to build - and those using it should pay - not all customers

2. If your service is not creating new income you will find it difficult to get funding for improvements.

3. Transparent pricing is important for competition. Competition is important for development and for taking cost savings into customer pricing.

4. The charges do not have to be big as the customer base is so large. 

5. Charging has not delayed take-up. Convenience gained and time saved outweighs charges - hands down.

6. If costs - as a minimum - are not charged it will as a rule lead to customers acting against there own interest (they pay all the cost anyway) as they usually do not have time to move into new services without this very efficient and costefficient nudging..

This honest and open way of doing things is important - to get the banks to deliver their full value potential in the networked economy, where they can do so much more around payments, automation of value chains and strong e-id-services - to mention a few..

TagsMobile & onlineInnovation

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job title Chairman/Founding member
location Helsinki Region
member since 2008
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