Take a look at the interviewes with our clients who were among the first to introduce Smart-ID in their e-services. We tried to find out what will the future business look like, to which direction will the fintech industy shift to and how can companies take advantage of Smart-ID.


A Year with Smart-ID – How Swedbank Latvia Multiplied the Digital Activity of its Customers

Bank Cards and Cash Will be Replaced by Humans Becoming Biometric Currency

How the Collision of Fintechs and Banks Will Change the World


A Year with Smart-ID – How Swedbank Latvia Multiplied the Digital Activity of its Customers

Published on March 5, 2018

In the Baltics, Smart-ID – a new authentication solution released in the February 2017 – has won over 700 000 end users. In Latvia, the effect has been especially prominent as the country previously had no convenient and secure mobile authentication solution.

After just celebrating Smart-ID’s one-year milestone at Mobile World Congress 2018, I decided to reach out to our good client Vadims Frolovs, Head of Customer Service Division at Swedbank Latvia and ask him to shed some further light on how their customers have received Smart-ID.

Mobile Revolution in the Banking World

“If I was asked which technology would be the best choice to use as a day-to-day assistant, the smartphone would certainly rank at the top of my answer today. Statistics show that 61% of all Latvian residents already own smart devices. They also constitute an integral part of our financial lives – the bank's mobile app allows people to stay fully informed of the situation in their digital wallets and how they are operating with their funds,” said Frolovs of today’s mobile banking world.

Frolovs believes that mobile apps are becoming and, to an extent, already have become everyday banking tools, which is illustrated by the fact that the number of Swedbank’s mobile app customers skyrocketed in 2017, reaching nearly 300 000.

“We can also see a very strong correlation between the launch of Smart-ID in February last year and a surge in the digital activity of our customers. Statistics show that 75% of our customers who have taken up Smart-ID have also started using our digital services more often. On average, the digital activity of Smart-ID users in our bank has increased 3-4 times,” Frolovs added.

The Expansion of Mobile Banking

Since the launch of Smart-ID a year ago, the number of logins to Swedbank Latvia’s mobile app has risen significantly. In addition to using the bank’s mobile app, the authentication tool can also be used for other purposes, such as logging in to Swedbank’s internet bank, making online purchases etc.
Frolovs considers the rise of mobile banking to be a great example of how we are already living in the future. People are walking around with technology that gives them access to modern banking services from the convenience of their pockets, eliminating the need to visit physical bank branches.

According to Frolovs, the adoption of Smart-ID in Latvia has been remarkable. “It seems unbelievable that Smart-ID entered our lives only recently, given how rapidly it has become an everyday tool in financial matters,” he said.

Currently, 150 000 Swedbank customers use Smart-ID and its most active customers belong to the 31-40 age group where 46% of them use Smart-ID daily. But the service is popular across all age groups: the youngest Smart-ID user among Swedbank Latvia’s customers is 8 years old and the oldest is aged 98.

Spearheading the Future of Technology

According to Frolovs, staying ahead in innovation and promoting digital skills at the same time is extremely important for Swedbank. “As every second person in Latvia uses the services of Swedbank, it is very important for us to both offer and develop innovative solutions as well as prepare our customers for the use of new technologies,” he said.

“We have also seen over the course of many years in our joint journey towards digitalization that our customers’ knowledge of innovations and the adoption rate among them is very high. For example, many indicators of customer activity in our mobile app already surpass those of our internet bank,” he added.

Frolovs emphasises that Swedbank has a duty to its customers to deliver innovative solutions to their wallets and finances, to provide them with new opportunities, and to be relevant in ways they cannot even conceive yet.

“Our customers expect no less from us and we intend to meet that goal. We are not just adjusting to the changes in our environment, but we are the ones leading the change in many respects. That means that we also need to take responsibility for those customers who need our assistance. As we have historically lead the transition from physical bank branches to the internet bank, it is now our duty to help people make the next step from desktop to mobile,” said Frolovs.

As for Smart-ID, in the span of a year, it has established itself as a frontrunner and the fastest growing e-identity solution in the Baltics by reliably offering customers a secure and convenient option for verifying their identity.

Share and comment the article on LinkedIn

Bank Cards and Cash Will be Replaced by Humans Becoming Biometric Currency

​Published on December 7, 2017

In a relatively short amount of time, banking has gone from frequent visits to bank branches and standing in ATM lines to check your account’s balance to having access to most bank services on your phone and contactless payment cards.

All of this has happened just in last years. But what else will the 21st century bring to banking sector? To find out, we turned to a banking professional who gave us the overview below.

Could Facebook secure our bank accounts?

According to Margus Holland, the Head of Digital Banking at LHV Bank in Estonia, the current trend of fast advances in technology will continue as despite the fact that Moore’s Law no longer applies in its original form, the technological aftershock will still be felt for decades.

For the financial sector, this means huge opportunities for better and faster processing of increasingly bigger amounts of data, but also means an increased need for qualified workforce. The accelerated rate at which new developments are being introduced to the market also increases the danger of overtly fragmentized product portfolios in banks as they try to stay ahead of the competition by being innovative in every sector.

Banks are already actively moving towards the discontinuation of password cards and soon, other unsecure authentication methods will also be discontinued. Additionally, the need to send banks your account statement when applying for loans and the need to show up in person when opening a new bank account will be phased out.

Holland also speculates that one interesting yet scary short-term innovation in banks could be the use of social media accounts for authentication and use of different online services. Although it would be an extremely convenient channel for customers to use, it would also create a ton of new complicated questions regarding data security which would then need to be answered.

Payment at your fingertips

In the long-term, there are many changes that we will see in the world of finance. First of all, the need to visit banks physically will completely disappear as all financial activities will be doable digitally.

Second, both cash and bank cards will eventually disappear from use and will be replaced with alternative payment methods. Even further down the line, humans will most likely become “payment methods” themselves as new solutions are created through the combination of biometrics and technology.

Third, with globalization, the different country-based currencies will be replaced with global currencies that are independent from borders. The global authentication and identification of people will also become more relevant.

Finally, with all these innovative changes there will undoubtedly appear new problems as it will become harder to fight fraudulent and criminal financial activities.

Virtual NFC bank cards and robot bank tellers

Holland also elaborates on some of the newest innovations and futuristic updates available at LHV in Estonia, a country known for its forward-thinking digital solutions. For example, they are the first bank in Estonia to offer video identification.

Anyone who wishes to become a customer at LHV can open a bank account through LHV’s homepage by authenticating themselves via Mobile-ID or Smart-ID, adding some more details, and finally, after going through video identification, their new account will be open for use.

LHV also introduced a new and unique “Salary payment” solution to the market in cooperation with the Estonian Tax and Customs Board, which allows companies to simultaneously make salary payments to their employees along with automatic tax payments and income tax declarations, all in one channel – the internet bank. The solution won the Estonian Banking Association’s 2017 Innovation Award.

To better serve their customers, LHV “hired” chat robot Uku – whose name pays homage to the mythological Scandinavian god of rain, wind, and thunder – on Facebook. Uku can give customers answers to the easier and most frequent questions.

The bank is also constantly working on developing its digital channels, having recently added Smart-ID to their options for authentication and electronic signing of payments, and detailed information about credit agreements, including the option of ending an agreement early via internet bank.

In the future, LHV aims to implement the use of virtual bank cards which will be issued immediately upon the creation of a new account. These virtual bank cards will use NFC chips in phones which means that users can make payments by using their phones as if they were contactless cards.

Internet banking in Estonia also allows the country’s citizens, residents, and e-residents to make full use of the various online public services, such as those related to healthcare, pensions, entrepreneurship etc.

Minimize security risks in mobile banking

Eventually, mobile banks will become more than a way to quickly check your balance and make a payment. They will become the main method for managing our finances.

With so many new functions like applying for a lease on a car coming to mobile banking, banks also need to guarantee that use of mobile banking is safe and secure.

Banks can ensure that the channels they offer for customers are secure and provide the best user experience possible without any software glitches and errors. Otherwise online banking doesn’t create credibility or trust towards users.

However, since banks don’t control their customers’ computers and phones, it is mainly up to the end users to ensure the safety of their accounts and financial activities. For this, Holland recommends always keeping any relevant software up to date and following the general suggestions on data protection, especially when using a public network. One way for users to better safeguard their accounts and data right now is to start using secure authentication tools, which provide a stronger protection method than the traditional username-and-password combinations.

Share and comment the article on LinkedIn

How the Collision of Fintechs and Banks Will Change the World

Published on December 13, 2017

The technological advances being made today are created and implemented relatively fast in historical terms. These innovations are changing how our world works and how we work in it. And, with the various new devices, solutions, and upgrades also come new security risks that need to be managed.

Accordingly, these changes also affect big industries, such as finance. So what kind of innovations and changes can we expect to see in the future of finance? To answer that, we turned to a professional in the field, Gediminas Misevičius, the Digital Development Officer and IT Department Manager at Swedbank Lithuania.

The rise of fintechs

Over the past couple of years, a lot of innovative fintech companies, especially startups, have appeared on the finance scene. Some notable examples of these are Stripe from Ireland, Transferwise from Estonia, and Lufax from China, to name just a few.

According Misevičius, the fintech companies can be divided into two types: those that want to disrupt traditional banking by offering cheaper or easier alternative services, and a new emerging group of fintechs – those who wish to cooperate with large banks and grow through the large number of customers that traditional banks have.

The disruptive fintech companies offer easier and cheaper alternative services for consumers, such as payment options, cards, or P2P loans, and their product sets are constantly expanding. But the companies who are interested in working together with banks are creating an improved integrated experience for their customers. Misevičius adds that there are more collaborative fintechs in the USA than in Europe or the Asia/Pacific regions.

Some banks that have gained inspiration from fintechs are also implementing additional functionalities in their products. But it is difficult to do this alone and compete with every single fintech company with each of them concentrating on a narrow area of banking.

So, the fintech companies are having a big impact on banking through the creation of competition for traditional banking and at the same time, through how they provide banks with new collaboration opportunities and inspiration.

Integration brings unity

Misevičius calls Swedbank – a Swedish bank founded in 1820 that has become large Nordic-Baltic banking group today with assets worth 237 billion dollars – a universal bank, a so-called one stop shop where customers can have a very broad range of products in one place.

Recently, they launched their Open Banking platform that enables cooperative fintechs and other internet companies to test and later integrate their services within Swedbank’s internet and mobile banking environments.

Current examples of this are ERPLY Books in the Baltics – accounting software integrated with Swedbank’s Internet Bank that also includes automatic accounting – and the Mina Tjänster (My Services) subscription manager in Sweden.

Additionally, although Swedbank mostly offers digital products, they are also considering adding IoT devices to supplement their product offers. For example, in insurance, IoT devices could be used for tracking people’s behaviour which in turn could be used to establish pricing. 

Will automated banking replace bank tellers?

The future of banking will also see an impact from both fintech companies and various new technologies.

Misevičius says that the cooperative fintechs will create solutions that will be integrated with banking solutions, which will enable better customer service. One of the first examples of this is the aforementioned ERPLY integration. The competitive fintechs alongside big players like Google and Facebook will also have a significant impact on the payments industry with their solutions.

Other technologies that will influence banking include blockchain technology and AI and automation. The latter will drive down costs for companies, improve customer experience, and, as it has done in other fields, will also reduce the number of employees in the banking and finance sector as various tasks get automated.

Companies must account for careless employees

All these technological advances, both new and upcoming, also require appropriate protection. This is why the whole process of building a new product – from the architecture and technology used for development to the processes – needs to be done properly to prevent any data leaks.

Swedbank takes security very seriously and doesn’t even underestimate the security leaks that their own employees could create. For this reason, they have dedicated cyber security teams who act as an additional security layer in their data protection.

MFA is the future of account security

Misevičius also adds a note and suggestion about account security, saying that the whole banking industry agrees that the safest way for customers to secure their accounts is by using two-factor authentication methods.

Besides national ID documents (e.g. ID-cards), Swedbank’s customers can also use Smart-ID and Mobile-ID to ensure safe online access to their bank accounts. These solutions use two factors to authenticate the user – something they have – their ID-card, a phone or tablet with the Smart-ID app installed, or a mobile phone with the Mobile-ID SIM card – and something they know – like user or account specific PIN codes.

He adds that WYSIWYS – What You See Is What You Sign – or in other words, the ability of a customer to verify their actions on an independent device, such as a mobile phone, is a very important feature of all authentication solutions.

In the future, a third factor, biometrics such as fingerprint, iris, face or voice recognition, could be added to these solutions, creating multi-factor authentication methods which will help to achieve an even higher level of security in authenticating a person’s identity, but the technology for this is still in its early stages.

Share and comment the article on LinkedIn