TietoEnator © 2003

Role of e-payments, e-id and e-signatures in business andgovernment services

TKK

25.4.2007Bo Harald

TietoEnator © 2003

Outline

1. TietoEnator briefly2. Innovative banking services needed for the Networked Economy3. Emerging Mega-trends4. End-user centric approach –making it from inventions to innovations5. E-invoicing in EU focus

TietoEnator © 2003

TietoEnator

Born in banking –established in1968 by Union Bank of Finland(now Nordea) and major industryenterprises

One of the world´s leadingproviders of high-value-added ITservices in selected businesssectors

One of the largest IT servicescompanies in Europe

TietoEnator © 2003

TietoEnator

Annual net salesexceeding EUR 1,7 billionListed on Stockholm andHelsinki ExchangesOver 15 000 employeesin more than 25 countriesDeliveries to 100countriesE-banking and e-invoicingprovider to global leaders

TietoEnator operates in: Austria, Belgium, Canada, China, the CzechRepublic, Denmark, Estonia, Finland, France, Germany, India,Indonesia, Italy, Latvia, Lithuania, Malaysia, the Netherlands, Norway,Portugal, Russia, Singapore, Slovakia, Sweden, Ukraine, the UnitedKingdom and the USA

Key Facts >

TietoEnator © 2003

Deep vertical know-how in mass market industries –starting from banking

supporting BANKS in Nordic countries to:become world leaders in e-banking and payment automationexpand business offerings from e-banking to e-business-embeddede-banking - 2nd revolution

AND at the same time with automation, self service and sourcingcut their costs in half

ANDestablish a model for public-private partnership

Experience cannot be copied - ithas to be experienced...

TietoEnator © 2003

Outline

1. TietoEnator briefly2. Innovative banking services needed for the Networked Economy3. Emerging Mega-trends4. End-user centric approach –making it from inventions to innovations5. E-invoicing in EU focus

TietoEnator © 2003

Innovations make the difference –stages 1&2 (Nordea)

• Corporate e-banking (1979)• Private e-banking (1982)• one-time-code log-on (1982)• equity trading in e-bank (1988)• Travel currency (1993)• SMS-banking (1996)• E-loans (1998)• Foreign payments (1999)• WAP-banking (1999)• E-mortgages (2003)• Warrants (2002)• etc

1. Basic banking

2. All products, multi-device,

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Innovations make the difference –stage 3 (Nordea)

• E-id third parties (1992)• Real-time e-commerce-payments (1996)• E-billing b-to-c (1998)• E-signatures 3rd parties (1998)• E-salary (2000)• E-id for public sector (2002)• Finvoice e-invoicing (2003)• Certificate on EMV-card (2004)• Finvoice for documents (2004)

3. “Connecting customers”–reuse (economy of reuse) familiar(economy of repetition) e-bankingtools for 3rd parties–embedded in e-commerceand e-public sector services

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Nordic banks have delivered these -much with support of TietoEnator

Banks have beenserving

BusinessPublic sector

Private Customers

withtraditional tools:

payments,financing, storing

wealth etc:with netbanks

Banks have beenserving

BusinessPublic sector

Private Customers

withtraditional tools:

payments,financing, storing

wealth etc:with netbanks

Mass markettool for:

e-id &e-signaturesE-bank id

IDEALFor STP

Mass markettool for:

e-id &e-signaturesE-bank id

IDEALFor STP

Mass markettool for:

Real-timepayments/paymentsassuranceIDEAL for

STP

Mass markettool for:

Real-timepayments/paymentsassuranceIDEAL for

STP

Mass markettool for:

Payments-integratede-invoicingIDEAL for

STP

Mass markettool for:

Payments-integratede-invoicingIDEAL for

STP

Business going e-global.Public sector becoming e-omnipresent

The Networked Economy -3 more pillars needed from banks

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Example from ESTONIA:

- 0,8m citizens have netbank authentication tools1,0 m citizens have mandatory national ID-card with certBOTH ARE ACCEPTED IN ENTIRE PUBLIC SECTOR

361 000 Estonian citizens used bank-id in March 2005 for tax return(up 100 000 since 2004)

(904 used state issued certificate on smartcard)

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Re-using electronic banking infrastructure in E-services

Electronic banking - the baseE-IDE-ID Online

MessagingOnline

Messaging File TransfersFile Transfers

The bank

Corporate/Public sector

3rd Party authentication services (E-ID)3rd Party authentication services (E-ID)

Web order & pay - e-payments (Online mess.)Web order & pay - e-payments (Online mess.)

Exchange of documents- order, e-invoice, status...(File transfers, messages)

Exchange of documents- order, e-invoice, status...(File transfers, messages)

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Infrastructure supporting SMEs in the networkedeconomy –”e-only-age”

SMESME

Public sector

Supplier 1

Service

Supplier 2

Customer 1

Customer 2

Customer N

Q: How to solve electronic communication in anefficient way?A: Same for all - just like payments…

e-only! e-only!e-only!

e-preferred!

e-only!

e-only!

e-preferred!

TietoEnator © 2003

Outline

1. TietoEnator briefly2. Innovative banking services needed for the Networked Economy3. Emerging Mega-trends –a few..4. End-user centric approach –making it from inventions to innovations5. E-invoicing in EU focus

TietoEnator © 2003

XML

!

TheSingularity…

SOAPUDDI

ebXMLUBL

RSS RDF

AJAX

OWL

N-tier EAILoose coupling

Semantic Web

Database of intentions

TaggingSOA

WSDLWeb services Grid-computing

BPM

EDASDO

Corp blogs

Long tails

AON

VoIP RfID

IPTV

On-Demand c

AIAny number ofthings happening

Social Web

Web2.0

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Programmable web eclipsed static web in 2006

Flickr beat WebshotsWikipedia beat BritannicaBlogger beat CNNEpinions beat Consumer-ReportsUpcoming beat EviteGoogle Maps beat MapQuestMySpace beat FriendsterCraigslist beat Monster

Why?The losers launched Web sitesThe winners launched vibrantcommunitiesThe losers built walled gardensThe winners built public squaresThe losers innovated internallyThe winners innovated with theirusersThe losers jealously guarded theirdata and software interfacesThe winners shared them witheveryone

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Technological connectivity will transform everything

We are at the early, not mature, stage of technologicalrevolution. …

More transformational than technology itself is the shift in behaviorthat it enables. ..

source: McKinsey 2006

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Start early –let mature –implement gradually

“ICE AGE”“ICE AGE”

“Any hype will do”Early start: “Explorer”Late (re)start: “Panicky follower”

Bo Harald 4.2.07

TietoEnator © 2003

Outline

1. TietoEnator briefly2. Innovative banking services needed for the Networked Economy3. Emerging Mega-trends4. End-user centric approach –making it from inventions to

innovations5. E-invoicing in EU focus

TietoEnator © 2003

… simple insight - the only thingscarce in a world of abundanceis human attention.” Business 2.0 Jan 2000, James

Daly, Editor in Chief

Less time for any one thing... > quest for clarity, simplicity, holisticcollaborative offerings and repeatability in user interfaces

A world with far too many choices, fragmented technology,lack of standards, information overflow...

Only 24 hours available

TietoEnator © 2003

Very useful new technology“raining on the plains”

Reality:Severe information overflow (less time for any one thing) and inflexible IT-infra

From inventions innovations

Collaborative servicesneeded to get to newlevels

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My name is Guy

Same Guy

Bank customer Bank corporate customer Utility customer

Citizen in publicsector service

Operator customer Operator corporatecustomer

Corporate utility customer

Enterprise inpublic sectorservice

What makes him move?What holds him back?

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Same Guy

Pankin asiakas Pankin yritys-asiakas Sähköasiakas

Terveyskeskusasiakas OperaattoriasiakasOprin yritysasiakas

Sähkö yritysasiakas

Often used and trusted e-toolsfor e-id, e-signatures, e-payments,payments-integrated e-invoicing

Banks & insurance Utilities

TelecomPublic sector

Same familiar e-tools - embedded

Same familiar e-tools.. Same familiar e-tools - embedded

TietoEnator © 2003

Build ladders for your end-users!Use familiar tools..

Top line growth opportunity as keybusiness driverTop line growth opportunity as keybusiness driver

Cost savings for allCost savings for all

Ready habit and trust - e-bankingReady habit and trust - e-banking

Reuse tools - integrated in corporate andpublic sector services - economy of

repetition (learn once - use everywhere

Reuse tools - integrated in corporate andpublic sector services - economy of

repetition (learn once - use everywhere

Expand further to benefit from economy of reuse,economy of scope and scaleExpand further to benefit from economy of reuse,economy of scope and scale

Add partners for collaborative offeringsAdd partners for collaborative offerings

Standardize further for end-to-end automationStandardize further for end-to-end automation

Bring in next level concepts and technologyBring in next level concepts and technology

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Accenture: Building the trust Survey 2006

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Not end-user centricEnd-user centric

New levels of technology in use

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Data intensive service work is moved

To machines2. M2m and 3. th2M rfid

Automatic billing,asset management,meter reading, patientmonitoring,housing monitoring,content production

1. To customersselfservice

Network payments,health reporting,voting in the net,production of mediacontents

3. To low cost producers

Global sourcing andnetworking in planning,design andsupport services

No cost Low costDIGIT“A digit is a toe or a finger. “

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% oftransactions

Time

20%

40%

60%

80%

100%

Towardsreal timecompletion

M2Mdegree

Web usage(self servicedegree)

Transactionalwork STP-

degree

PULL

PULL

Finnish banks have halved their costs!

TietoEnator © 2003

Layer-by-layer Case Nordea

ReuseE-habit and

E-trust

ReuseInvestments

ReuseSalesForces

Can be demanded from banks !

TietoEnator © 2003

Outline

1. TietoEnator briefly2. Innovative banking services needed for the Networked Economy3. Emerging Mega-trends4. End-user centric approach –making it from inventions to innovations5. E-invoicing in EU focus

TietoEnator © 2003

Productivity for Europe with Full SEPA

EU cost saving estimate from e-invoicing: €100 billion/year28 billion invoices + billions of other documents “

Finnish State Treasury:cost estimate for incoming manual invoice €30, 8€/outgoing

Electrolux:Electrolux stated a cost of €50 / paper invoice 1999...

Finnish Employers Federation:annual saving from b2b e-invoicing at 2,8bn€(Finland 1/66th of EU GDP..)

European Association for Corporate Treasurers (EACT):is demanding actions from banks and software providers - EU 243bn€costsaving estimate

Something REAL for Lisbon -that only banks can deliver...

TietoEnator © 2003

Significance of SMEs –Case: Enterprises in Finland99% are small –will join only when banks provide tool

1,3 mill300 bill €232,000TOTAL

38.3%47.6%0.2%Large (>249)

17.6%19.1%1.0%Medium (50-249)

19.5%15.6%5.7%Small (10-49)

24.6%17.6%93.1%Micro (1-9)

PersonnelTurnoverNumber of Co'sSize / Personnel

Source: Statistics Finland,Finnish Enterprises in2004

EU (=66 times Finland) 15,312,000 19,800 bill €

Significance of SMEs –Case: Enterprises in Finland99% are small –will join only when banks provide tool

Source: Statistics Finland,Finnish Enterprises in2004

EU (=66 times Finland) 15,312,000 19,800 bill €

Have automated transactions with proprietory EDI –mostly with other large enterprises

Mostly un-automated 60% of all invoices

TietoEnator © 2003

E-invoicing dilemma

SmallerBusiness

Volvo:”only e-invoice

allowed ! ”

Municipality:”send e-invoice !”

SYSTEM 1Private customers:”pls send e-invoice

and directdebit e-notification !”

Retail:”e-invoice !”

SYSTEM 2

SYSTEM 4

SYSTEM 3

We needONE way to ALL !

Just like payments!!

4 differentapplications -not possible

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Invoices to ALL customers –send to all in one channel–JUST LIKE PAYMENTS

National filecustomers

Foreign filecustomers

Netbank customersInvoicer: file or singleinput in netbank (file ofone) –same software withALL Banks –Finland>Sweden>Nordic

Other bankJUST LIKEPAYMENTS

Other banks’customers

Non-e customersor non-e-invoicingbank customers

Printing PartnerNo investments or softwareinstallations for small customers !!!

(+otheroperators)

Corporatecustomers /

non-standardformats

Any bank

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BuyerBuyer

SupplierSupplier

Order / e-signatureOffer

Statements - tax etc

Payment

Demand estimate

Payment Guarantee

Direct debit adv

e-Invoice

Invitation to tender

Deviation info

Delivery GuaranteeDelivery Information

Account statement

Payment Assurance

From e-invoicing to all messaging - easy XML-based horizontalAutomation and vertical Reconciliation

Only in e-banking for17 million smallbusinesses in EU

100bn€

Ordersposted toSeller’saccountsand backto own

Invoicesposted toBuyer’saccountsFull

SEPA

TietoEnator © 2003

TietoEnator © 2003

The future is not plannednor prognosed

Thank youbo.harald@tietoenator.com,

http://boharald.blogspot.com

It is created !

TietoEnator © 2003