RIGA - Without a doubt the most robust trend in retail financial operations these days is e-banking, according to Metasite, a company specializing in management consulting and technology solutions that recently concluded a report on the subject.
"Baltic retail banks did a tremendous job in educating users back in 2000, 2001 and 2002, when the real Internet usage explosion was taking place. Hansabank must be given appropriate credit here for following through with their focused strategy for converting their residential clients to e-banking users," says Aldas Kirvaitis, managing director of Metasite.
Realizing the potential of e-banking, banks were more willing to invest in it as much as possible. "They realized that the financial benefits the bank gets from customers doing their transactions online [lower customer service costs] match or outweigh the benefits that the customers get, so they resisted the temptation to charge the users extra for doing their banking online," says Kirvaitis.
By the end of September Lithuanian banks had 848,445 registered Internet banking users, up 50 percent from the same time last year. Hansabankas led the pack with 402,400 online users.
"We can presume that Internet banking still has potential for growth in the short-term, given that Lithuania's Internet penetration is still below the EU's average levels," Egle Klevickiene, deputy chairwoman of the management board at Hansabankas, told the Baltic News Service.
A notable exception has been Latvia, where some smaller banks still penalize customers when they use e-banking. Perhaps more importantly, the technical drawbacks of e-banking that frustrated many customers in the beginning of the e-banking boom have been ironed out.
Kivaitis believes that the problems now lie in the clarity of Internet sites and the response to online inquiries. "These are problems in lack of management focus, process standardization and control," he said.
Once the advantages and disadvantages of e-banking have been weighed, the one thing bankers can be assured of is that e-banking is rooted in growing technology. The amount of cash in circulation will decrease as the ATM machine becomes a fond memory, and people use more up-to-date and secure methods of managing their money. The emergence of yet more technology-based banking methods - such as mobile phone banking through SMS - will make sure people can manage their money wherever they are. This latter type of banking - dubbed m-banking - has already been implemented in Tallinn, where residents can pay their car-parking fees by SMS.
M-banking even has the capacity to become more popular than e-banking, as more people have access to a mobile phone than the Internet.
Kirvaitis believes that e-banking still has a lot to offer us. "More and more Baltic banks are getting ready to integrate their Internet banking systems with third party service providers," he says. "From the user's perspective, this basically means the ability to access additional online functions and tools after logging on to their account - such as viewing their mobile phone call lists, studying their utility bills or electronically filing their taxes."
But after this increase in technology and the ability to pay taxes at the click of a button, the only question left unanswered is whether consumers will eventually grow nostalgic for the feel of a crisp note in their wallets and the jangling of coins in their pockets.
