how do banks position themselves in e&m channels and payments epfsf/eif joint event april 1 2008...

How do banks position themselves in e&m channels and payments

EPFSF/EIF joint event April 1 2008 European Parliament, Brussels

Dag-Inge FlatraakerGeneral Manager, DnB NORChairman EPC Standards Support Group and EPC e&m Expert Group

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Dag-Inge Flatraaker – DnB NOR

e&m payments -

How do banks position themselves in e&m

channels and payments

Agenda- Internett banking – the Nordic case- eInnvoicing- EPC/SEPA – e-commerce & mobile channel approach

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DnB NOR –- By far the largest financial group in Norway (40 % market share)- Third largest in the Nordic market (total assets >200 billion Euro)

- One of the largest shipping banks in the world- A main international bank in Energy

DnB NORD

Rep.offices

Branches

Subsidiary

Asset Management

London

Santiago

Rio de Janeiro

Copenhagen

Stockholm Hamburg

New York

Vilnius

Copenhagen

Hong Kong

Chennai

Luxembourg

Monchebank, Murmansk

Singapore

Tallin

Shanghai

Helsinki

Warsawa

Riga

Helsinki

Houston

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The Nordic and Baltic countries are well positioned for the future. Example Norway

• Early adopters of new technology and high penetration in technology use:• 3 mill persons above 13 years with Internet access• 2 mill people use the Internet daily• 100 % mobile penetration (40% in 1997)• Fixed line penetration 73%

• The most dynamic mobile internet market outside Japan

• The highest use of mobile content services

• Almost all households and corporates are using e-banking services (internet banking)

• Electronic multi-channelling and holistic approach has paved the way fora very efficient payment infrastructure

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Payment infrastructures and channels in Norway

1995 Cash-back offered as a separate service

1996 Internet Banking introduced

2001 Bank in Shops (BiB) introduced

1972Bankgiro and ATMs

National Giro system and ATM scheme

1990-95Interbank clearing and settlement

NICS (clearing) and NBO (RTGS)

2000E-invoicing

eFaktura (EBPP)

2003BankID (PKI)

Trusted Services

1980’sNational card scheme

EFTPOS Cashback introduced

2006Mobile banking

Mobile access to financial services

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Payment infrastructures and channels in the Nordic countries – an example

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NORWAY SEEMS TO HAVE A HIGHLY FAVOURABLE PAYMENT MIX, WITH LOWEST RETAIL CASH USAGE

1

2

0

0 00 0

0 5 8

0

5 3 9

34

1313

17

13

1517

25

2 0

6 12

2

1

2

7

53

1

1 0 1 15

2 37

3 5 3 14

0

0 10

2

1 758 1 970 1 505 1 467 985 1085 1 403 1 237 1 068100%

Number of retail transactions per household (percent) Direct Debit

Cash

Check

Cards*

Transfers

* Including E-Purse

1 702

98 93 93 87 86 82 82 79 78 75 72 71 70

SP IT GE NLBE UK FR SEPL PT AT CH NO

1 515 991 1 184

Source: McKinsey

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e-Invoicing - Streamlining the corporate value chain

• What's at stake:

- potential huge savings for corporates

- important in the context of the Lisbon Agenda

• Why banks:

- all people and businesses have a relationship with a bank

- the banking industry can enable an environment of all-2-all electronic interface and communication in payments and electronic document exchange (e.g. order, order confirmation, invoicing, payment etc)

- As banks we can ensure our clients of the legal validity of sender and receiver identity

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e-Invoicing/EBPP and the Nordic region

• Banks in the Scandinavian countries have for years been running national E-invoicing Schemes

• The Nordic banks have established a joint Nordic scheme for E-Invoicing

• Entails agreement on standardized formats and format conversion, Rulebook, Implementation Guideline (MIG) and Governance

• Will enable clients to exchange E-invoices between themselves across banks in the whole Nordic region (the first regional scheme in the world ?)

• Will, over time, enable huge savings for clients and could be an example to follow, we are building on international standards and are open for wider cooperation

The Nordic banks welcomes European/SEPA and/or global solutions, the EU initiative helps driving this process.

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European Payments Council (EPC) and SEPA

• Established in 2002, purpose is to realize one Single Euro Payments Area (SEPA)

• One organization representing all European banks • EPC has the authority to bind European banks in common

decisions• Strong pressure from the authorities (EU-commission, ECB)• EPC covers the banking industry in all EU countries as well as

EEA/EFTA-countries, which means 31 countries involving more than 8000 banks/500 mio inhabitants/25 million corporates and SME's

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EPC structure for retail payments

AuditAudit

NGCNGC

SecretariatSecretariatScheme Management

Committee *Scheme Management

Committee *

Stakeholder Forum

Stakeholder Forum

StandardsSG

StandardsSG

SEPAPaymentSchemes

WG

SEPAPaymentSchemes

WG

CardsWG

CardsWG

Cash WG

Cash WG

ProgrammeManagement

Forum

ProgrammeManagement

Forum

LegalSG

LegalSG

Coordination Committee **Coordination Committee **

Plenary *Plenary *

* Decision making body** Process decision making body

E&M Expert Group

E&M Expert Group

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The EPC response to mobile channels

EPC Strategy on e&m

• EPC Plenary decision 18 December 2007;- The Mobile channel for initiating payments is regarded as a priority area for the industry - Contactless payments are regarded as the most promising area to be prioritized first- The European banking industry will collectively, via EPC, work together with the mobile operators (and others) on cross industry cooperation

• Goal: Together with GSMA (and EMVCo and others) explore/establish;- high level principles and a framework for creating the necessary standards and business rules so that e.g existing SEPA schemes (SCT & SDD) and SEPA cards can be leveraged- minimum requirements, standards and best practises for security for using a mobile to initiate payments

• SEPA Online Payments (SOP) at web merchants- EPC has decided to develop standards and a framework to allow for SEPA online payments at web-retailers

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Mobile banking - the next big step ?

• Need for cooperation on standards, security features and business models across industries (banks, telcos etc)

• Collaboration with Telecom/mobile operators necessary and key !!Mobile operators dominates today the mobile distribution(both handset and services)

• For both industries to succeed, business models needs to encompass both banks and mobile operators

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Reduce Cash

Mobile Banking

Using Mobile network

On-line Channel

Mobile Contactless

Proximity payments

“Tap-and-Go”

NFC technology

Authentication

Security Token

Alternative Channel

for Authorisation

Usage of the Mobile Phone in Payments(categories)

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Mobile Payments Market: some Mobile Payment initiatives 2007

Belgium: operators and Banksys launch SMS

payment

Belgium: operators and Banksys launch SMS

payment

France: NFC pilots in Caen, Strasbourg,

Grenoble, Paris

France: NFC pilots in Caen, Strasbourg,

Grenoble, Paris

Croatia: 50% of parking fees paid by moble

phone

Croatia: 50% of parking fees paid by moble

phone

Austria: operator-owned Paybox grows to 300,000

mobile payment users

Austria: operator-owned Paybox grows to 300,000

mobile payment users

Germany: NFC implementation in public

transport in Frankfurt area

Germany: NFC implementation in public

transport in Frankfurt area

Netherlands: NFC mobile payment pilots (Rotterdam,

Amsterdam)

Netherlands: NFC mobile payment pilots (Rotterdam,

Amsterdam)

Norway: Telenor and banks launch BankID for

identification & authentication

Norway: Telenor and banks launch BankID for

identification & authentication

Italy: card issuer CartaSi launches ski

pass payment service

Italy: card issuer CartaSi launches ski

pass payment service

UK: Vodafone and Citigroup announce remittance venture

UK: Vodafone and Citigroup announce remittance venture

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Mobile financial services – an example

Mobile services as supplement to other channels(on-line banking, telephone banking, branches)

Complete bank for clients not using PC's

1. Banking services: Account balances, transfers, bill payments, dialogue with the bank, alerts and incidents

2. Added services: Real estate, Stock trading, Insurance

3. Payments services: Payment for goods and services in the mobile channel, PC, TV, Payment instrument at point of sale ("wave and pay")

4. Trusted services: Authentication Signing

Mobile services

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Secure Element

Mobile financial services

Banking

Information

Account management

Bill payments

Trading

Alerts

SMS, BRO

ESER, CLIENTS

Proximitypayments

POS

Vending

Tickets

Fast foodParking

ATM N

FC

RemotepaymentsTickets

Top Up

Content

SMS, BRO

WSER,

CLIENTS

TrustServices

e-ID

e-signature

loginO

nlin

e / O

fflin

e

Source: Mobey Forum

how do banks position themselves in e&m channels and payments epfsf/eif joint event april 1 2008...

Documents

norwaydaginge flatraaker

exampledaginge flatraaker

daginge flatraaker dnb

nordic countries

dnb norchairman epc

nordic regionbanks

joint nordic scheme

largest shipping banks