Inexpensive Internet banking looking for commissions

TALLINN - The three biggest Estonian banks provide Internet banking
services for free. This is a welcome service because people prefer to
communicate with the bank electronically rather than visiting the
branch offices. As a result, Estonian banks earn less commission on
services and are planning to charge a fee for some transactions.

Hansapank has changed the price list for business clients while
Uhispank is planning to charge Internet bank clients in the future.
Hansapank announced on Dec. 14 that beginning Jan. 10, business
clients will be charged 3 kroons per domestic payment transaction.
Joining the Internet bank as well as account information are free of
charge. There is no periodic service fee.

Hansapank also changed the price list of Telehansa services and will
introduce in the first quarter a new "Telehansa +" version, which
enables the employees of big enterprises to work with the same
program simultaneously.

"Information technolgy requires a lot of investments. Estonian
clients are accustomed to good information technology standards and
thus have higher requests. Hansapank has to cover these investments,"
said Ando Noormets, spokesman for Hansapank.

Hansapank invested 122 million kroons in information technology in
1999 and will invest 167 million kroons in the year 2000.

Uhispank undecided

Uhispank has not decided when to start charging a fee for Internet
services. Currently Internet transactions are free of charge.

"The share of transactions with the bank through electronic channels
has increased from 40 percent to 85 percent," said Eero Raun,
spokesman for Uhispank. "When a large proportion of bank services are
done through electronic channels, and the non-electronic channels of
the bank are used less, the bank loses its revenues from commissions
and interest on loans," said Raun.

Optiva Bank announced it is not planning to increase commission for
Internet services in 2000.

Hansapank has about 95,000 Internet banking clients, Uhispank 30,000
clients and Optiva Bank about 6,000 clients on the Web. According to
recent research done by BMF Gallup Media, there are about 300,000
Internet users in Estonia.

The percentage of Internet banking clients is very high in Estonia.
According to Tiit Pekk, managing director of Hansapank e-commerce
department, about 10 percent of Hansapank and Uhispank clients use
Internet banking services. As a comparison only 1 percent of Deutsche
Bank clients and 5 percent of Swedbank clients use its electronic
services. At the same time Scandinavian banks are far ahead:

Skandinaviska Enskilda Banken (SEB) has about 17 percent and Merita
Nordbanken about 11 percent Internet banking clients.