Table: Getting a Bang Out of E-Banking

More than any other bank in the world, Nordea is tapping the Internet to woo customers and streamline its operations. The bank hopes the Net will boost its bottom line by $250 million--or 10%--over the next three years, half through reduced costs and half through higher revenues.

USING THE WEB INSIDE NORDEA

Branches: Nordea has cut the number of its branches in Finland from 800 to 400. As online business has risen, customer visits to branches have been slashed in half in the past two years. The Internet initiative was a primary factor in pushing the bank's profits up 22% last year.

Communications: By yearend, Nordea plans to integrate four computer systems it inherited in mergers. That will give all workers access to the same info and help them mine customer data to target pitches to clients.

Staff: About one-third of banking transactions are made online, and 90% of withdrawals have moved to automated teller machines. The combo has cut 5,000 jobs and saved big bucks: An online transaction costs 11 cents to process, vs. $1 for manual ones, resulting in $40 million in annual savings.

EXTENDING THE WEB TO CUSTOMERS

Retail Banking: Most customers fork over $2 per month to conduct online transactions, resulting in some $30 million in extra revenues annually for the bank. Nordea handles 6.9 million online bill payments monthly, more than any other bank in the world.

Corporate Accounts: More than 20 large companies, including phone companies and utilities, let Nordea customers view and pay their bills online, without ever seeing a paper copy. Nearly all Nordea's online customers use the service.

E-Marketplace: Nordea has an online marketplace where 600 small businesses that do their banking with Nordea sell the bank's customers everything from sausages to saunas. It charges the merchants $18 monthly and takes a 25 cents fee for each of the 60,000 transactions monthly.

Stock Trading: Nordea launched electronic stock trading via dial-up PC connections in 1988. Today, 80% of all trades Nordea handles in Finland are done on the Net, reducing the bank's transaction costs by more than 90%. Even better, Net customers make twice as many trades as unconnected ones do.

Loans: Since 1998, Nordea has let customers apply online for loans up to $15,000. Decisions are e-mailed back within 15 minutes. About a fifth of Nordea's Finnish loans are approved over the Net, saving the bank 30% in processing fees per loan.

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