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01/10/2009 08:20:42 József Nyíri, IND Group - Budapest added:

Thank you József,

Glad to read that you agree on using e-banking tools for "connecting-customers" in e-commerce. E-commerce-payments and e-id have been huge success stories in several countries.

I do agree that the ambition must be to adopt features from the social web as  much as possible - but as it is very difficult, if not impossible, to keep up speed with those who can start from a clean slate when banks are tied to decade old legacy systems. Thus a must to compensate by bringing in new dimensions of value from extended payments, trust services like e-id and order-in-chaos domains. Young customers will still complain - but the thing that can be done is to tell them what can be done and what cannot - at any sort of decent cost. Customers pay every cent of the costs anyway - and should be told that banks take responsibility for keeping them as low as possible in relation to the value delivered.

I would have expected higher e-banking figures. In the Nordics some 85% of active customers are signed up and most of them also use the service. One reason for this may be that PC-banking was established already in the early 80s (in Finland) and became the launchpad for internet-banking.

Mobile banking still has some way to go. The launchpad for that will more likely come from balance reporting, notifications and card payments moving out of plastic.

Should have remembered to say that you do not have to have a bank account or be the banks's customer to get the e-id tools needed. Many banks offer this also to this segment.

Unfortunately I have to agree with what is said here. New customer value through new combinations of technology and services and embedding banking services into e-commerce is far too often low on the agenda. Same goes for simplifying offerings and communication.

This all is naturally rather boring compared to high profile risk taking in investment banking and so forth. Tax payers now have the right to ask for innovations in return for money spent on rescue operations.

Keith makes a good point in "Banks have for too long separated Sales & Marketing from Customer Service." I fully agree - and this is what has led to blind product pushing - seriously complicating things instead of dearly - both by customers and staff - needed simplification.

But then customer service yesterday is not the same as customer service today. Having had the experience of launching e-banking for private customers in -82 the counterarguments were often that it will take away personal service. For what? For paying bills over the counter, for checking balances over the phone, for cashing checks (eliminated with transparent pricing in -83) for withdrawing cash etc. Most of this "personal service" was a 30-45 second encounter.. But in the country side there was/is still a social dimension by swapping the latest on children and grandchildren.

When most over the counter and call center services were priced transparently most of this disappeared. Customers had of course paid for the service before - without knowing it (paralell case now: enterprises charging for sending paper invoices..). When the cost is shown - customers know how to behave in their very own interest. The cost of banking in Finland was cut in half - and most of the savings given back to customers in fierce price competition. Will consumer organization ever realize this opportunity to really serve cost cutting for customers?

Today it is a question of delivering good services over the Internet. And good services means that contact centres are not loaded down with routine tasks or people not understanding the offerings (simplification, simplification, simplification..). In stead of investing in handling the symptons (investing in outsourcing work that should be eliminated) it should by now be very clear that the disease needs full attention - investments in eliminating complexity and adding many logical and more holistic layers in - the by now dominating - e-banking channel.

Then as Keith says: "Sales and Service" are viewed as two sides of the same coin by customers."

Banks have themselves to blame for some of the complaints - having made "products" too complicated and having put sales targets ahead of real customer value.

But the problem with the above is that banks are hate objects in virtually any market situation - by media, by politicians (who follow media), by customers who do not get loans, by customers who did get loans, by customers who invested with the hope to get high yield without risk, by depositing customers who believe that the banks set the base rates so low, by customers who do not want to pay visibly for services, by consumer ombudsmen who resist transparent pricing etc etc

So the complaint stream reflects too much of the this sentiment and is difficult to be handled. Probably it is still best to make it public so that the man on the street can judge for himself if it is worth to spend his money for it. He pays every cent and penny for it himself - and this should in all circumstances be made very clear.

I have always thought that Ryan Air is doing the right thing - showing the cost and making the customer using it pay for it - not all customers - without knowing.

This also lowers costs for all as unnecessary baggage is not dragged onboard...

Why is this so difficult to see? Must take it to Facebook..

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.

Cedric,

This is an important discussion - I am sure you agree with me that we should give users choices, cut costs and speed up adoption of e-services. The public-private partnership model has worked really well in the Nordic-Baltic area - so why should it not work elsewhere?

I am sorry that I have not been clear enough on a few points - new try:

" What about the people who don't have a bank account? Should they be tax exempted?" Reuse of bank tool just one alternative - other tools are naturally welcome.

"Usually it's the governments role to take care of the society." Governments role is to superwise and procure services - not necessarily to produce all itself - nothing to be scared about.

"The primary role of a bank is simply to lend money." I disagree - banks have many other tasks - and new ones in the networked economy. Banks have since ancient times been a trust provider and guaranteed identity of trading partners - so this is not anything new.

" We should not centralize all the services in a single place and make fraudsters' job so easy." Banking has to be secure in all circumstances.

"Not really. Not even in Finland:" We offer alternatives - the state issued e-id has not been used - citizens prefer their familiar bank-id"

"But not secure because banks are not security experts." Most banks do this very well - and those who need to improve must do it - forced to do it by supervision if not otherwise - banking cannot be unsecure.  "It has been proven by all the data breaches lately. " Really? And state issued e-id would not have similar challenges?

"But the next step is also to let banks issue passports, birth certificates..." I do not see any logic in the state not doing this primary identity.

"Besides, the first thing a reasonnable public service would do is to consult and subcontract specialists." This is the public-private partnership we have in the Nordics - reusing strong e-banking tools and supervised procedures.

" but so far you have not convinced me that banks would be a good substitute for the governments." - I am not saying substitute - just one alternative - there can be other supervised private players also - and the state can issue e-id if necessary.

"Actually it's even in line with what's happening in the USA right now" When it comes to third generation e-banking and payments I think we are ahead of the US - I do admire them for much - but they are not always right in banking supervision as we  have seen..

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....