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					Business Case
      prepared
         by


  Rojan Gharadaghy
    Patryk Strojny
    I.    Introduction
    II.   Business Model
    III. Outlook




2
Historical Overview


Due to mergers, Nordea became one of the largest
banks in (Northern-) Europe
● Nordea is a product of several mergers between banks from Scandinavian countries
● 2003: 15th largest Bank in Europe

                                      1998         1999            2000         2001
         Sweden       Nordbanken                                        Postgirot
                                                MeritaNord-
                                                Banken     Nordic Baltic
         Finland             Merita                          Holding           Nordea

         Denmark                      Unidanmark
                                                              Unidanmark
                                         TYRG
         Norway                                                           Christiana Bank
                                                          Vesta           Og Kreditkasse



3
Vision and Mission Statement




 Nordea has a clear vision and mission

 Mission
 • We share and exchange Nordic Ideas
 • We are Nordic in operations while personal and local in delivering services. We
 thing Nordic and act locally.
 • Our market is of a size that makes it worthwhile to develop joint concepts, products
 and services


 Vision
 • We will be valued as the leading financial services group in the Nordic and Baltic
 financial market with a substantial growth potential
 • We will be at the top of the league or show superior profitable growth in every
 market and product area in which we choose to compete
 • We will have the leading multi-channel distribution with a top world ranking in e-
 based financial services and solutions


4
Customer and Market Distribution


 Nordea’ main customers is doing Retail Banking in
 Finland




5
Product Mix – From e-Banking to e-Business



Nordea does offer many business services that transition
their e-Banking model to an e-Business model
                     Business Service           Description and exemplary applications
                                             Identify themselves on other particiapting websites
                       e-Identification      or governmental Agencies. Examples are state pesnion site or
                                             elektronischer Personalausweis

                                             Signing off online phone contracts through a link to Nordea’s Solo Internet
                         e-Signature         bank



                                             Customers can send invoices electronically to bank, which then forwards
                            e-Billing        them to their customers



                                             Send out income statements straight to employee, thereby eliminating the
                           e-Salary          need for printed salary statements via mail




                          e-Payment          Online merchants can use for settling payments on Solo platform



                                             GPRS and WAP used b4; Alliance with Nokia: phone with two slots, SIM
                          m-Banking          card, and m-payment card by Nordea which is based on wireless
                                             identification module



6
Vision and Mission Statement


Nordea started early to become strong in e-business
activities
             Key to success was early start. 1982 telephone voice commands. 1984 PC banking with a dial-up
             modem, therefore low “make-up” costs




                                                    e-Strategy

                 Goal 1                                 Goal 2                                Goal 3


    “e-habit” among its customers.
                                            Interconnect customer by
    Primary goal is to keep it simple                                              Personalize and customize
                                            integrating different banking
    to achieve higher customer                                                     offerings through data-mining
                                            channels.
    satisfaction




7
Technology



Technology backbone derived from merged banks

•    Backbone: has been influenced by merged banks
       – Merita (Finnish): browser and password (low Entropie)
       – Nordbanken (Swedish) software and smartcard-reader

•    Consequences:
       – four main production centres
       – 9000 different Applications
       – four different branch networks

•    After: streamlined IT-Infrastructur
       – 20% of total expense, $ 800 million
       – 1981-2000, Finnish arm spend $ 19 million

•    Philosophy IT:
       – Business decides what
       – IT decides how



8
Security



Security is a key factor for Nordea’s Authentication process

Authentication:

•      since 1980: for all contacts with the
       bank (via Internet, mobile or call
       centre) customers use Identification-
       Number and One-Time Codes (OTC)

•      Customer shows up in person at the
       bank branch opens an account and
       gets his OTC-Card.

•      Disadvantage: you have to carry
       around the OTC’s

•      Improvement: developing a PKI
       (smartcard with chips)


9
     I.    Historical Overview
     II.   Business Model
     III. Outlook




10
Industry Life Cycle


Nordea took advantage with their e-Banking strategy
early on
Industry Life Cycle




● Nordea started to build up their e-Banking in an early stage
● The market changed meanwhile into a growth market
11
 Porter‘s Five Forces


Threat of telecom operators as entrants into the market
is increasing
                            Threat of new Entrants
                            ● Are Nordea’s products differentiated?
                            ● Do Economies of Scale exist?
                            ● Does Nordea have a strong brand
                               Identity?




         Threat of
                                                                      Buyer Power
         Substitutes
                                                                      ● Are Nordea‘s
         ● Low Barriers
                                                                         customers
            to entry?
                                                                         price
         ● Competitive
                                                                         sensitive?
            advantage of
                                                                      ● Few switching
            alternative
                                                                         costs?
            business
                                                                      ● Threat of
            models
                                                                         backward
            („click-only,
                                                                         integration?
            „click-and-
            mortar“)?
                                 Supplier Power
                                 ● Switching Costs for
                                    Nordea?
                                 ● Forward integration
                                    possible for supplier
                                    group?



12
  12
 BCG Portfolio Matrix – e-Banking Nordic Countries


High growth rates in e-Banking customers and users
results in high industry attractiveness

 High
                                        Stars                                Question Marks
  Industry Growth Rate




                                   Cash Cows                                   Dogs

 Low


                         High                        Relative Market Share            Low


13
 SWOT Analysis


Security issues might become a growth problem for
Nordea

                     Strengths                          Weaknesses
       - Brand name in Nordic region         - “share trouble”
       - Strong customer base                - Bank’s total income decreasing
       - Well-developed and up-to-date e-    -“Insecure” System
       business strategy


                  Opportunities                         Threats

       - Extend market position in other     - Further online theft attacks
       markets                               - Increased competition from
       - Enter new markets                   global banks and telecom
       - extend well-established e-banking   operators
       model



14
     I.    Historical Overview
     II.   Business Model
     III. Outlook




15
 Security Problem

                           Phishing Attack 2007

•    8 million € Damage

•    McAfee describes it as the "biggest" online bank heist

•    Over the last 15 months, Nordea customers have been targeted by emails
     containing a tailor-made Trojan

•    Trojan installs keyloggers to record keystrokes

•    When users attempted to log in to the Nordea online banking
     site, they were redirected to a false home page

•    250 customers have been affected by the fraud

•    According to McAfee, Swedish police believe Russian organised criminals
     are responsible for the attacks


16
 Security Problem

                    Phishing-Site




17
 Security Solution

                     2007 New Security Solution from Unwire

•     Combines the use of the internet bank and the mobile phones

•     A minute after a money transaction has taken place, a sms is sent to the
      customer if the transaction is unusual (profile!)

•     If the customer answers the sms from the bank with a ”yes” within the time
      limit of two hours, the transaction will be carried out

•     Customers can react if a strange money transaction occurs

•     New sms solution has already resulted into a reduced number of hackings




18
 Security Solution


                     2009 New Security Technology

•     Replacing many existing channels with a single new one

•     ISO 20022 XML standard-based SEPA (Single Euro Payment Area)
      payment file

•     Using worldwide standards in Web Services and PKI for corporate-to-bank
      file transfer connections

•     Just one communication to send and receive all services, like payments and
      balance statements




19
 Growth Opportunities




Growth opportunities do exist in different sectors

● No further growth in Finland, Denmark/Norway growth in private and corporate banking
● Seize growth potential in Baltics because of high online acceptance
● Extend market position in Poland and CEE countries (Nordea bought four banks)
● New services over internet, e.g checking balance on credit card though their mobile
● e-business future opportunities:

-    Extended CRM, triggered data mining that results in making offers via mail or face-to-face in
     a branch

-     Risk Management services for e-business




20

				
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