E-Services - The Nordic Experience
Nordic consumer clients mostly use web-based banking services on the Internet and today it represents the most important distribution channel we have to this segment, complemented by cards at the point-of sale. We are now commercialising electronic card payments for use in the fast growing market of e-commerce. A key issue here is establishing necessary trust through secure and reliable payments solutions for this fast growing market.
The Norwegian banks have also started issuing a national PKI solution enabling all communication with clients, be it authentication or electronic signatures, in a secure and standardized way over the Internet. This will also be made available for all electronic commerce now under development in the private and public sector.
In the new world most payments activity will be electronic, borderless and require integrated automated solutions, e.g. enabling corporates to streamline their processes and value chain. We also see a trend towards the mobile becoming a major channel for information services, the next phase will probably be consumer clients and mobile content service suppliers demanding more information and payments services via this or similar distribution tools or channels.
To be ready to defend our role in the value chain of our clients we have to prepare for these kinds of services in the new mobile and electronic world. To do this efficiently we are all depending on standards to evolve, most preferably common European or global standards.
All Nordic countries already have in place domestic solutions for electronic bill presentment payments solutions (EBPP). DnB NOR and other Nordic banks have now initiated a common Nordic project with the aim of establishing a Nordic EBPP Scheme encompassing common formats, implementation guidelines, scheme rules and scheme governance for the Nordic region. This will in time enable the Nordic banks to offer EBPP services with a Nordic reach for its clients, of which many are doing business throughout the Nordic/Baltic region.
The aim is not to create regional standards. We are using European and global standards where available (ECBS, ISO, SWIFT) and expect this regional project, as well as being perhaps a chance to be the first regional multi-country EBPP Scheme in the world, to contribute to driving the evolution towards common global standards.
DnB NOR participates fully in the SEPA infrastructures and rules under deployment, we are a full member of the European Payments Council (EPC) and have implemented all EPC rules and resolutions regarding euro payments. This also encompasses being a direct member of the first Pan European ACH (PEACH), EBA Step 2. We have, in this regard, also established full receiver capability enabling all banks in Europe to access all accounts in Norway via this hub. We believe that SEPA will contribute significantly to driving standards and cooperation in the European and international market and we are committed to supporting this development.
SWIFT is one of the most important institutions we have to enable common standards. SWIFT with its broad user community has historically helped banks achieve great benefits in the wholesale and capital markets and is now also moving towards the retail segments and enabling market infrastructures to support this. SWIFT’s role in the area of standards, especially after being rendered the governance role regarding UNIFI standards development process on behalf of ISO and an agreement working together with the EPC on standards, will undoubtedly increase in the years ahead.
Most importantly, the level of common understanding on the need to drive collaboration on standards and infrastructure varies widely depending on country, bank and region. The ideas and perceptions of how and when to join forces to meet the challenges and needs of the ‘new world’ are certainly not uniform, which is understandable considering the different characteristics and maturity of markets.
Mobile infrastructures represent a mix of networks, technologies and business agreements between mobile operators. Even roaming agreements are not consistent over different protocols, e.g. there could be a roaming agreement between two operators on SMS (GSM-based), but no agreement on GPRS or 3G. The mobile operators even control the use of open operating systems and open protocols in the mobile handsets and networks. Therefore, the banks alone cannot ensure mobile payments because of the dependence on mobile operators.
The mobile phone could be solely regarded as a new instrument that will make use of existing payment methods (credit transfer, card payment). However, this instrument will raise new challenges and demands for existing payments (security, for instance). Existing payment methods will also face new challenges from micro payments. This market is moving fast, and banks should work together on these issues to meet both market demands and threats from new competitors.