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Having launched e-banking back in 1982 I am naturally all in favour of offering everything possible on line (all the way to signing loan agreements with your log-in code). At Nordea in Finland now only 1pct of customers use branches for bill payments, cheques have not in practise been used since -83 and most more complicated transactions have moved to the web. As a result cost of banking in Finland has been cut in half - and this is big money - every cent paid by the customer.

Still branches are used - for advice on non-routine mortgages, SME-financing, non-life insurance, pension schemes and asset management etc. Partly because customers prefer it this way - but partly because banks have not made these "products" easy enough. There is still a belief (partly justified) that a personal banker is affordable as it adds stickiness to the relationsship. All considered I believe that the trend towards less reasons to use branches will continue - also here where there are 5,2m e-banking contracts in a population of 5,5m.

Well put Brett. The longwinding "business case analysis" even for small investments is being justified by the multitude of demands from fragmented organizations. But the answer is not to centralize decision making - but decentralize: grant powers to those who have been appointed to their tasks - and ask them to increase small fail fasts

I agree that protection of the banking system integrity should always be of highest priority. A matter of similar dignity is to keep mission critical IT-systems up and running. Innovative services and new channels lead to needs for upgrade in legacy systems and as radical rebuilding is difficult, expensive and risky such upgrades can become increasingly difficult to accomplish - and thus slow down innovations. 

This is very difficult for outsiders to understand. So trivial changes suggested - and nothing is happening. Bankers must be both lazy and stupid.

Who might these guys be?

We managed to launch this e-commercepayment back in -96 in Finland. Very popular from the outset, easy and riskfree for merchants. We did not manage to get it into 4-corner - but this enabled the payments to become real-time. Again huge value for merchants.

Starting to use onlinebanking is usually leading to a jump in customer satisfaction - and lower costs for the bank - and thus for customers taken together if competition is working. This does not mean that e-banking should not be charged for - but less than the manual alternatives.

Branches are important as sales offices - but we should by now try harder to get away from manual transactions of all sorts - especially cheques and cash.

I am saying that customers pay every cent of any service providers cost - not that they are getting back every saved cent. But for sure if cents are not saved there is nothing to give back. Our experience in Finland - where the combined costs of banks were cut in half - much due to branch closures enabled by e-banking - was that most of the costs saving went back to customers in fierce price competition. The other potential direction - the shareholders - got a much smaller slice.

Customers pay every cent of the costs banks have - and it is especially expensive and not very sensemaking to have too many big branches designed for transaction services in countries where online banking has taken off.

This was experienced already at an early stage of online banking - back in the 80s and early 90s in Finland - before the Internet version. What occured was extraordinary jumps in customer satisfaction and when we looked into them it coincided with taking e-banking into use.