Browsing by Subject "digitalisation"

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  • Bank of Finland (2021)
    Bank of Finland. Bulletin 2/2021
    Payments are changing. In the same way that technological progress influences so many of the day-to-day activities of households and businesses, it affects how we make payments. The coronavirus pandemic has irreversibly changed how we live during the past year and has accelerated many long-brewing developments. The future of payments may arrive sooner than anticipated just one year ago.
  • Manninen, Otso (2015)
    Bank of Finland. Bulletin 2/2015
    If loss in interbank confidence regarding banking sector balance sheets intensified the crisis in 2008, banks’ faltering confidence in other banks’ systems could cause the next crisis, experts warn. Confidence is vital to the financial system, and as account balances are situated in cyberspace, confidence in the numbers on the screen is of the utmost importance. From a practical point of view it is irrelevant whether a loss of confidence is due to the realisation of financial market risks or cyber risks.
  • Grym, Aleksi (2018)
    Bank of Finland Bulletin. Blog
    Cryptocurrencies refer to virtual mediums of exchange, which are transferred from one holder to another without the use of a centralised ledger. Originally conceived as an alternative to the official monetary system, cryptocurrencies have failed to realise their intended purpose. Instead, they might be viewed as an asset class of sorts, but only as long as there is a functioning market for them. As such, it is more appropriate to speak of crypto-assets, not cryptocurrencies.
  • Kemppainen, Kari (2017)
    Journal of Payments Strategy & Systems 1
    Digitalisation is shaping almost every sector of the economy, enabling new ways of doing things, not merely digitising old, often manual, processes. Numerous new digital payment applications have emerged in retail payment markets, but the underlying payment infrastructures have remained almost unchanged. However, it is expected that technological advances combined with increasing competition enhanced by regulatory changes will shape retail payment markets in the coming years. With this evolving new environment will come new requirements, most notably for the authorities responsible for safeguarding the security, reliability and efficiency of payments. To analyse this challenge, this paper first reviews the theoretical framework that can be applied in examining the development of retail payment markets. Based on this, it outlines possible policy actions for the authorities. Secondly, it assesses the roles of authorities in practice, focusing on their position as catalyst for development in the European and national payment landscapes. Finally, it draws policy conclusions, emphasising the importance of multi-stakeholder cooperation bodies involving both payment service users and providers as well as relevant authorities.
  • Laine, Tatu (2018)
    Bank of Finland. Bulletin 2/2018
    Reliable payment and settlement systems are basic requirements for maintaining financial stability and fostering economic activity. The smooth functioning of society would quickly become disrupted if businesses and households were to lose trust in payment services or the accuracy of bank account balances, for example.
  • Grym, Aleksi (2018)
    Bank of Finland. Bulletin 2/2018
    In retail banking, the two key services are the provision of credit and management of payment transfers. The revised Payment Services Directive (PSD2), which regulates payment transfers, entered into force in Finland for the most part in January 2018. The purpose of PSD2 is to increase competition, and it has been prepared with the consumer’s interests in mind. In addition to benefits, the revised Directive involves also risks and uncertainties.
  • Bank of Finland (2018)
    Bank of Finland. Bulletin 5/2018
    Housing company loans and consumer credit add to high and rising levels of household indebtedness. The macroprudential toolkit needs to be replenished with borrower-based instruments that take into account loan applicants’ repayment ability and are able to address the rise of household indebtedness as a whole. Nordea's redomiciliation has increased the size and structural vulnerability of the Finnish banking sector. Italy's budget crisis and Brexit proceedings have contributed to uncertainty in Europe. Cyber risks and climate change pose yet further challenges for financial stability.
  • Heikkinen, Päivi; Välimäki, Tuomas (2021)
    Bank of Finland. Bulletin 2/2021
    Payments are a basic function in society, the lifeblood of economic activity; if disrupted, this could bring society to a total standstill. It matters how payment services and the systems executing these services are designed, how they are managed and what costs are involved. New types of services enabled by technological progress, increasing competition as a result of deregulation and risks related to the digital environment have an impact on both payment services and the underlying arrangements. The coronavirus pandemic has irreversibly changed how we live during the past year and has accelerated many long-brewing developments. The future of payments may arrive sooner than anticipated just one year ago.
  • Itkonen, Juha (2017)
    Bank of Finland. Bulletin 3/2017
    The impact of digitalisation is not fully reflected in economic statistics. Even though the commonly used economic metrics such as GDP are still relevant in assessing the state of the economy, the production of statistics should be developed to better measure the digital economy. Because of digitalisation, GDP may have understated output growth, even though measurement errors alone do not explain the exceptionally weak developments in recent years, nor do they eliminate the key challenges for the Finnish economy. Digital technology has, however, improved our well-being in ways that aredifficult to measure in money.
  • Bank of Finland (2018)
    Bank of Finland. Bulletin 2/2018
    A macroprudential decision taken by the Financial Supervisory Authority's Board in early spring to tighten the maximum loan-to-collateral (LTC) ratio for housing loans will bolster the stability of the Finnish financial system. The policy adjustment will help curtail growing household indebtedness by restricting the provision of large housing loans relative to collateral and by increasing awareness of the risks inherent in such loans. It will not, however, remove the risks associated with outstanding household debt and its protracted growth. New macroprudential tools are still required to contain growing indebtedness.
  • Rehn, Olli (2018)
    Bank of Finland Bulletin. Blog
    Digitalisation is currently the most significant force transforming banking as well as the entire financial industry at large. Most payment and financial services have already shifted online and are readily accessible through people’s mobile devices. In the future, financial services will become increasingly untethered from the constraints of location, granting users immediate and on-the-go access. The adoption of instant payment infrastructures will only accelerate this process.
  • Grym, Aleksi; Koskinen, Kimmo; Manninen, Otso (2018)
    Bank of Finland. Bulletin 2/2018
    The Nordic countries are the most digital societies in Europe, which is also reflected in past and future investment within the Nordic banking sector in digital business models. Keeping up with digitalisation helps these banks respond to the competition posed by new FinTech actors. Elsewhere in Europe, the banking sector as a whole is not as digitally advanced. In the longer term, the lack of a digital strategy may weaken individual banks’ position in the provision of various financial services. A material shift in this activity from banks and other closely regulated and supervised entities to loosely regulated actors could give rise to new kinds of risks.
  • Kemppainen, Kari (2017)
    Bank of Finland. Bulletin 2/2017
    New players and practices are taking hold of the payments market. In Europe, these developments are also being driven by legislative amendments, with the revised Payment Services Directive entering into force in 2018. The three key trends in payments are fragmentation of the market, payments going real time and the actual act of payment fading into the background of the process. Amid these changes, the central bank has the task of ensuring reliable and secure payments also in the future.
  • Koskinen, Kimmo; Manninen, Otso (2019)
    Bank of Finland. Bulletin 2/2019
    The profitability of the European banking sector is weaker than 10 years ago or compared with banks outside the EU. However, the average figures conceal market differences among EU banks.
  • Itkonen, Juha (2019)
    BoF Economics Review 1/2019
    The impact of digitalisation is not fully reflected in economic statistics. Even though commonly used economic metrics such as GDP are still relevant in assessing the state of the economy, the production of statistics should be developed to measure the digital economy better. The most significant measurement challenges caused by digitalisation relate to new goods, free services, changes in quality and the movement of intellectual capital between countries. Due to digitalisation, GDP and productivity growth may have been understated and the rate of price inflation overstated. Measurement errors alone do not explain the exceptionally weak development in recent years, nor do they eliminate the problems of the Finnish economy and the key challenges for economic policy. Digital technology has, however, improved our well-being in ways that are difficult to measure in money.
  • Koskinen, Kimmo; Tuomikoski, Olli (2017)
    Bank of Finland. Bulletin 2/2017
    Finnish household debt accumulation is also rapidly increasing via consumer credit. The majority of these loans are still from credit institutions, but there is a growing number of channels for credit provision. Lending has grown both via foreign providers of credit operating online and through peer-to-peer lending services, and household debt accumulation from these sources is difficult to monitor.
  • Nykänen, Marja (2018)
    Bank of Finland Bulletin. Blog
    Digitalisation holds great promise for new opportunities, but it will also usher in new challenges and risks. Businesses will enjoy lower operating costs and consumers a wider breadth of choice, while cross-sector and cross-border competition will both increase. Service providers will need to make determined efforts and investments in order to keep up amidst the technological change and intensified competition. Regulatory changes will also spur the digital transformation of payments. The revised Payment Services Directive (PSD2) entered into force in early 2018, and its effects are gradually being felt. As payments become quicker and are increasingly relegated to the background of purchase transactions, greater demands will be placed on personal finance skills and financial literacy.
  • Tölö, Eero (2016)
    Bank of Finland. Bulletin 2/2016
    Traditional financial participants are facing new competition in the wake of digitalisation. On one hand, major technology giants have begun to provide services designed primarily for payments but partly also for lending, while on the other hand fast-growing fintech startups are out to peck the most delicious titbits off banks’ plates, spurred by feather-light cost structures and new ways of thinking.