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Nordea bank is the largest financial group in the Nordic region. It is considered a
universal bank, which offers services in corporate merchant banking, retail banking,
Nordea is the product of several mergers, which started in 1997 when the Finnish
Merita Bank merged with the Swedish Nordbanken forming MeritaNordbanken. Later
in 2000 MeritaNordbanken and the Danish Unibank merged. This merger was later
known as the Nordic Baltic Holding. Following the merger in 2000, the Norwegian
Christiana Bank og Kreditkasse joined the merger. By 2001 the entire group
Before the final merge Nordea was available in Sweden, Finland, Denmark, and
Norway. Today Nordea bank is represented in 16 different countries all over the
Poland, Russia, Estonia, Latvia, Lithuania) and it is also available Globally in Brazil,
Nordic Ideas
They are Nordic in operations while personal and local in delivering services.
They will be valued as the leading financial services group in the Nordic
They will be at the top of the league or show superior profitable growth in
They will have the leading multi-channel distribution with a top world ranking
SWOT Analysis
Strength
constraint, Nordea will be able to provide faster and more efficient transactions, and
transaction cost and cost on personal management, because online banks rely less on
energy sources. As bank size increases and knowledge further develops, online banks
are able to consolidate the complexity of their business, which results in more
economies of scale.
Weaknesses
Weakness becomes an issue when considering going online because in order to run
their business online banks have to execute their activities in countries where they
From the customers perspective, security of their personal data is one of the main
issues. Fortunately, Nordea was not facing such weakness. The online services were
was already very developed. Nordea bank was very well able to differentiate
themselves from online banks by offering several services such as: e-signature, e-
payment, e-identification
Opportunities
offer a variety of differentiated services (ex: bonds, mutual funds, and mortgages)
communication and collaboration between banks and other service providers. Setting
the base for implementing new business strategies will create value for both
Finland). By working together they agreed on a contract to send all their interested
customers an online phone contract to link to Nordeas Solo Internet bank website
where they could identify themselves and then sign the contract
Threats
The main problem for online banking is the availability of such a large number of
competitors from domestic and foreign banks. In addition the lack of supervision on
online activities and the implementation of effective legal norms prevent online banks
from running a flawless business. Nordea did not face such threats as they had more
customers using their online services then other domestic banks. Moreover they were
not threatened by pure online banks since they lacked the personal relationship and
trust with its customers. Even foreign banks such as Citi bank, Deutshe Bank which
provide online banking were not considered as competitors to Nordea since they dont
Approach to E-banking
Nordea started launching their e-banking services when Union Bank introduced
opportunity by making most of their services online in order to reduce cost, and focus
their branch employees on selling more complex and higher margin financial
products. Their e-banking channel was established through a joint effort of the
managers and the IT department of the bank. Although their management support was
limited on the idea of going online, only after showing statistical proof of the
advancement that the e-banking project would introduce to their company, the
Nordea was able to entice its customer to use the online channels through
relationship a sense of trust was created among their customers, which led
3. By making use of their customers data and preferences, they were able
business. They planned on reusing the technologies that they already have to also
reach customers with companies and businesses; they called this new service E-
business. The main services that Nordea included in e-business were: e-identification,
from Sonera which is the largest telecom operator in Finland, stated that since
customers can already get a loan online then why not also be bale to sign a
phone subscription contract online. Therefore after some time, Nordea reached
contract through a link where they can identify themselves and then sign the
contract. This system was later expanded to provide e-signature for other
contracts.
E-Billing: Through this services companies can now send their invoices
electronically to the bank, which are then forwarded to their customers who
have e-banking agreements, and those that do not have an e-banking account
receives an invoice online, they are asked if they wish to pay the bill, all the
E-Salary: this service is a more efficient way for companies to send the
the e-bank of their employees without the need for printed salary statements
E-Payment: this service allows customers to go to any online store in the Solo
where they request electronic invoice, and with just one click they can approve
the payment which is instantly transferred to the sellers account. This method
2. The merchant does not need to worry if the buyer pays or not. Nordea
Solo e-marketplace.
Adding channels to a bank satisfy the main goal; adding value. The multichannel
services are the major assets of the bank. It facilitates the customers life through the
quick facilities and instant access and hence avoids wasting time with the whole
queuing process. Also, it enables the customers to do their banking anytime and
anywhere, which makes it flexible. Last but not least it allows the transfer of money
channels such as; m-banking, pc banking, TV banking and branched based banking
are available.
ATMs are no longer considered as relevant and important as it used to be since card
M-banking: the wireless service started with WAP phones in 1999. The WAP
phones enabled the customers to track their account and credit card
transactions, transfer funds between accounts, pay bills, trade equities and read
customer mail. The WAP service extended to the mobile phones. In 2000
Nordea was able to introduce stock trading, bank transfers and the purchase of
movie tickets via the mobile phones. In 2002 the wireless services introduced
the dual-SIM handset for mobile transactions. One of the slots was for the
operators SIM card and the second was for the m-payment card.
PC baking: Nordeas online banking started in the mid 1980s. The special
minimum which means that in order to gain the customers trust in Nordeas
services they minimized the phone consultation and disabled the online
consultation and adopted simple offers to succeed in the internet business. All
Tv Banking: The TV banking started in 1996 through the use of a set top box
tool for computers and enabled the customers to write emails and check their
account balance. However this invention was not successful because in both
Branched based banking: SOLO (Nordea internet bank) played a massive role
in decreasing the number of branches that Nordea has and hence decreasing
the manual transactions. The purpose was to make the staffs work more
efficient and helpful through selling and providing services instead of wasting
time and making transactions. Banking is local but it doesnt always require
between branched banking and the Internet. Its quite the contrary; they
complement each other and co-operate in order to generate whats best for the
1. Since the beginning Nordea success was due to the efforts of its managers and
IT departments, they tried to engage all their bank employees in the new
between the online and the physical branch by integrating both channels. This
process was accomplished through crediting back the online revenues to the
branch the customer is associated with. The goal was to unite the cost
atmosphere of the branch network. In doing so, the entire organization was
2. Nordea had also used pricing schemes that set incentives for customers to
make more use of the Internet service. For example, a foreign currency wire
costs would cost $7 online while $14 in a branch. Another example is bill
payments, usually in any branch it would cost on average $3.50, while online
it is free of charge.
corporate customers; one time code from list of cards and a sign out code
require the customer to install any software on their computers or carry on any
password generating devices. Moreover, the same code can be used on any
electronic channels such as PC, mobile phone, TV banking and for direct
cost on attracting customer into their online channels. This was since they
through the personal relationship that was built among their branch
employees. This relationship ensured that their customers would use their
online services, and once they have made use of them, they passed on their
Despite their success in e-banking, Nordea were concerned with expanding their
mining to provide customized services to their customers and last but not least,
engage in risk management services in order to minimize the risks between two
Nordea Today
Nordeas recent activities include; lending, deposits, private net banks, trade, project
finance, security services and risk management. For example the saving and asset
management products are designed according to the countrys and customers specifics
needs; Emerging markets and theme funds as well as other products were also
management, its considered a main capital market product. Nordea offers different
types of risks; commercial risks, political risks and currency risk. Nordea life and
pension offers products to pension customers, which are basically insurance policies.
In addition, Nordea offers customized set ups for different corporate customers which
also rely on the countries jurisdiction demands. All in all, Nordea currently offers a
broad range of financial products along with corporate lending and savings and asset
management.
Geographically speaking, Nordea made its way to a successful expansion beyond the
northern and eastern European region; Africa and Asias pacific region specifically
Conclusion
All in all, Nordea bank was able to reach the peak in financial markets by adopting e-
banking system in its early stages. Also, they managed to integrate the previously
established value chain with e-banking through their primary activities that include
relationship built on trust with its customers in to the newly adopted e-banking
system, as well as their service activities that the employees offer to customers by
infrastructure, Nordea bank was able to entice their customers to use online banking.
relationship with their customers and attract new customers through their employees
which means they focused on building a strong foundations by finding talented and
skilled employees who were motivated through rewarded incentives and providing