Scandinavian companies of banking, retailing and hotel sectors investing into the Baltic States-developing service sector

Diplomityö tehtiin Lappeenrannan yliopistossa päätavoitteenaan selvittää tärkeimmät motiivit, jotka ovat saaneet pohjoismaiset palvelualan yrityksetinvestoimaan Baltian maiden kehittyvillä markkinoilla. Pohjoismaiset yritykset ovat olleet aiemmin aktiivisia hyödyntämään Baltian maiden työvoimaa tuotantosektorilla. Suomalaiset yritykset ovat investoineet aiemmin telekommunikaatio- sekävaatetussektoreihin, mutta nykyisin investointien pääpaino on siirtynyt palvelualalle. Pankkisektori on erittäin kehittynyt pohjoismaissa ja ruotsalaiset yritykset ovat onnistuneet myös Baltiassa siirtyen markkinoille yksityistämisen tuomien mahdollisuuksien avulla. Nykyisin näillä yrityksillä on vahva jalansija Virossa sekä ovat etabloituneet myös Latviaan ja Liettuaan. Suomalaiset pankkialan yritykset ovat olleet vaatimattomampia tällä sektorilla. Vähittäiskauppiaat ovat vasta kansainvälistymisprosessinsa alkutaipaleella. Suomalaiset yritykset ovat laajentuneet Viroon ja tehneet yhteistyötä ruotsalaisten yritysten kanssa. Hotellisektorilla suomalaiset ja ruotsalaiset ovat edenneet rauhallisesti, mutta norjalainen ketju, Reval Hotel, on laajentunut kaikkiin Baltian maihin. Hotellisektorilla on luvassa kasvua lähivuosina. Kilpailutilanne on kiristynyt kaikilla palvelualan sektoreilla sekä paikallisten yritysten kasvun että ulkomaisten investoijien myötä. Elinolojen paraneminen vaikuttaa myös kilpailutilanteeseen kiristävästi, sillä se luo mahdollisuuksia yrityksille laajentua. Tämä diplomityö selvittäätilannetta valittujen yritysten kannalta niiden kansainvälistymisen alkutaipaleella.

Stress testing practices in risk management - Empirical evidence from the Finnish banking and insurance sectors

The main purpose of this study was to analyze how stress tests are used in risk management in the Finnish banking and insurance sectors. In order to enhance understanding of the topic, stress testing was explored in the context of corporate governance and regulato-ry implications of Basel II and Solvency II on stress testing were examined. In addition, the effects of the global financial crisis on stress testing were mapped and the differences in stress testing practices between the banking and insurance sector were discussed. The research method was qualitative case study and it was conducted by interviewing risk managers from ten institutions and a representative from FIN-FSA. Findings pointed out that stress testing practices vary significantly between different institutions. Interesting observations were made in terms of stress testing practices in the banking and insurance sectors. The increasing importance and use of stress tests were recognized as a result of the financial crisis. Stress testing was even considered more like art than science given the amount of challenges it involves. In general, improvements in stress tests were suggested, with an emphasis on stress concentration between different types of risks.

Mobile banking in developing countries

This Master’s thesis examines the feasibility of eBusiness in developing countries by looking at the current mobile banking solutions. The research involved reviewing literature that was relevant to the research questions. It was discovered that the Wizzit and M-PESA are the current solutions to mobile banking. Furthermore, it was found out that the Wizzit and M-PESA were either transformational or additive. Additive mobile banking is the use of mobile phones as a channel to provide services to existing customers within financial institutions. Transformational mobile banking extends financial services to the unbanked. The results of the thesis are M-PESA works with only Safaricom while on the other hand Wizzit has compatibility with any mobile operator. The other result is that both M-PESA and Wizzit are transformational mobile banking technologies at the sametime Wizzit is an Additive mobile banking technology. Wizzit can provide financial services to both the unbanked and existing bank customers. It can be said the merits of Wizzit outweigh those of M-PESA which makes Wizzit better.

Fraud detection in the banking sector : a multi-agent approach

Fraud is an increasing phenomenon as shown in many surveys carried out by leading international consulting companies in the last years. Despite the evolution of electronic payments and hacking techniques there is still a strong human component in fraud schemes. Conflict of interest in particular is the main contributing factor to the success of internal fraud. In such cases anomaly detection tools are not always the best instruments, since the fraud schemes are based on faking documents in a context dominated by lack of controls, and the perpetrators are those ones who should control possible irregularities. In the banking sector audit team experts can count only on their experience, whistle blowing and the reports sent by their inspectors. The Fraud Interactive Decision Expert System (FIDES), which is the core of this research, is a multi-agent system built to support auditors in evaluating suspicious behaviours and to speed up the evaluation process in order to detect or prevent fraud schemes. The system combines Think-map, Delphi method and Attack trees and it has been built around audit team experts and their needs. The output of FIDES is an attack tree, a tree-based diagram to ”systematically categorize the different ways in which a system can be attacked”. Once the attack tree is built, auditors can choose the path they perceive as more suitable and decide whether or not to start the investigation. The system is meant for use in the future to retrieve old cases in order to match them with new ones and find similarities. The retrieving features of the system will be useful to simplify the risk management phase, since similar countermeasures adopted for past cases might be useful for present ones. Even though FIDES has been built with the banking sector in mind, it can be applied in all those organisations, like insurance companies or public organizations, where anti-fraud activity is based on a central anti-fraud unit and a reporting system.

From reactive to proactive banking : connecting with customers with context-aware mobile technology

Mobile technology has been employed in banking for already two decades. However, its significance this far has been modest. It is expected that the industry will change a lot in the future. Elements of this change include tightening of competition, considering customer’s individual and changing needs, becoming involved in customer’s life and being where customers are. The goal of this study is to explore these fields with regard to Finnish banking as well as investigate selected consumers’ views towards this kind of new service approach. It can be divided into three questions: • What kinds of mobile services does the Finnish banking industry currently offer for consumers and what expectations do experts and consumers have towards them? o What is consumers’ attitude towards a context-aware service approach in the banking industry and what are the suggested tools for it? o What factors define clients’ adoption intentions towards the new context-aware service approach? Which factors do they consider most important? In order to create the framework for the study, both Finnish and foreign scientific and professional literature considering evolution of the industry and innovation adoption has been used. The empirical part of the study consists of 11 interviews, including 6 expert interviews and 5 consumer interviews. The results show that the selected consumers reacted very positively to the suggested new service approach that considers them as a person and aims at simplifying their banking. The consumers appreciated especially solutions that simplified their everyday banking. Also proactive actions from a bank was considered important especially in everyday banking, as long as the customer was able to define the amount and way of contacts he received. According to the findings banks should aim at supporting their customers more than they do now. However, they also need to pay attention to not irritate their customers by excessive contacts. Banks should also open-mindedly introduce new technologies to their customers. Key words

Mobile Banking and Mobile Payments: Changing Banking Services in Finland

The purpose of this thesis is to examine how mobile banking and mobile payments services will change the banking sector in Finland, and what role non-bank companies from the IT and telecom industries will play in this process. The thesis consists of a literature review and a qualitative study. The literature review forms a comprehensive overview of mobile banking and mobile payments services. The qualitative research was conducted as a descriptive study, focusing on the views of bank and non-bank players. The results show that banks have a significant advantage over their IT and telecom rivals in regards to their service offering, financial buffer, and status as trustworthy institutions. The banks’ embrace of mobile financial services will change the Finnish banking sector into one, with a light branch network focused on sales power, and a heavy emphasis on new mobile devices providing service power regardless of time and place.

Facilitating corporate entrepreneurial behavior: A study of corporate entrepreneurial behavior in corporate banking

This study discusses the pronounced importance of corporate entrepreneurial behavior, CEB, facilitation and enablement as a key dimension in the rapidly changing business environment within companies. The research target is a large finance company in Finland, where regulations, compliance and processes restrict and refine extensively business approach. The purpose of this study is to foster the understanding of corporate entrepreneurial behavior and requirements and identify the supporters and inhibitors of facilitation of it. Furthermore, this study examines who should be driving the implementation and offer concrete outcome for the company to get the facilitation started and berth it as part of the organizational culture and values. The theoretical background is constructed from literature related to concept of corporate entrepreneurial behavior, factors supporting and hindering the facilitation based on previous studies and innovation management. Furthermore theoretical framework of middle managers entrepreneurial behavior in facilitation process was researched. Additionally top down and bottom up approach of conversational space building within the organization in order to foster innovation and involving mindset and behavior was in the core literature. The empirical research conducted for the study consists three parts; innovation audit questionnaire, semi-structured interviews and secondary data from previously made research within the case company. Questionnaire and interviews were targeted to eight middle managers within the company, the head of branch regions in corporate segment. The secondary data was collected from over 300 employees in the case company by an external company. Research results were analyzed mainly by themes and source division in adaption with the theoretical framework. The study finds that facilitation of CEB should be a strategic choice and requires strong management support and examples. Behavior should be involved with organizational culture, values, structures and processes. The companies´ willingness to take risks and encourage employees at all levels to participate and be involved by taking ownership and responsibility is in the core. CEB is found to be a key dimension in increasing employee satisfaction and engagement, competitive advantages and economic growth of companies. There is increased interest towards CEB in the case company but there is lack in the mutual consensus of it. CEB is not in the strategy although the mindset and support from management is in place. There is no concrete enablement and space for innovation and CEB although the platform would be receptive. Further research is needed to build shared vision of CEB and how to make it a part of the organizational culture and values in addition to building the conversational space.

Foreign Divestment Decisions in Banking − Case Nordea in Poland

In the 21st century, the realignment of multinational companies’ business scope has become a major issue globally. A very prominent part of the global realignment process, alongside with mergers, acquisitions and alliances, are foreign divestments. Foreign divestments have become an integral aspect of international business since they are now widely practiced by MNCs from a growing and diverse range of home countries and host economies. The objective of this thesis is to identify the factors that contribute to foreign divestment decisions in the banking sector. This thesis is a qualitative research with a single case study approach. The chosen case of this thesis is the divestment made by the internationally operating Nordic financial service group, Nordea, in Poland in 2013. The empirical findings were obtained by interviewing experts from the case company and the interviews were conducted as theme interviews using the four themes that according to the theoretical framework of this thesis are the contributing factors in foreign divestment decisions: (1) environmental stability, (2) attractiveness of current operations, (3) strategic fit, and (4) governance issues. The empirical findings of this thesis suggest that there were four dominant contributors to the foreign divestment decision of the case company: (1) host government regulations, (2) strategic considerations, (3) economic outlook, and (4) interested buyer. The empirical findings mostly support the accuracy of the selected framework as the first three theme groups were found to be major contributors also in the case company’s foreign divestment. However, the importance of the fourth theme group, ‘governance issues’, is not supported by the findings of this thesis. Furthermore the findings suggest that in addition to the groups presented in the framework, also timing can be an import factor in divestment decisions. Three managerial recommendations can be drawn from the findings of this thesis: (1) If a foreign divestment decision is the best course of action due to strategic reasons, it should not be avoided; (2) The pre-investment due diligence processes should not be ignored since it can help to avoid unwanted divestments; and (3) Companies should concentrate on building good relationships with the host government since it can facilitate business activities in the host country.

CSR Reporting in the Finnish Banking Sector – Status and Recent Development

This thesis reviews the development of CSR reporting in the Finnish banking sector. This was achieved by analyzing the content of specific CSR reports published by three banks during years 2012-2014. The banks selected represent the three largest banks operating in Finland according to their market share, constituting approximately 70 percent of the total perceived market share. The purpose of the analysis is to establish a clear descriptive overview of the status of CSR reporting and how it has thematically developed over the years. The research was conducted with the qualitative content analysis method. By analyzing the contents of the CSR reports it was found that CSR reporting is understood in 3 different themes that reflect the general CSR theory: economic, social and environmental responsibility. The following research focused on analyzing these three core themes separately during years 2012-2014 in order to find specific tendencies in the development of CSR reporting. The results confirm that CSR reporting is developing in the Finnish banking sector. Reporting about economic responsibility is based on core financial performance reporting, and it’s mainly developing in the assessment of the global recession and how the potential fiscal reforms affect to the bank sector’s performance. Economic responsibility is also being understood and reported as a wider concept, including intertwined and shared meanings with the other responsibility reporting themes. The research also suggests that banks value social responsibility reporting increasingly each year. Environmental responsibility reporting is the most standardized form of reporting, however, the reporting development includes the increased use of digitalization as source of lessening the environmental impact.

Mielikuvien luominen traileroinnilla : tutkimuskohteena Big Brother Suomi

The thesis studies the launch campaign of Big Brother Finland, especially from the viewpoint of on-air promotion. Interest to the subject arose when participating in the campaign as an on-air promotion planner together with Subtv's marketing director, on-air promotion editor and the channel's advertising agency. The launch of the campaign was a challenge due to the format, since not a lot of information can be revealed before the start of the program. When the planning started, all the material consisted of two logos. The first season of the Finnish version of Big Brother begun on Subtv August 2005. The goal of the program was to become a topic of discussion on TV on the fall 2005 and to raise the profile of the channel. The goal of the launch was to get good ratings for the first episode. The launch campaign was also supposed to open up the format to the viewers and to arouse interest in the show. Secrecy and the size of the program were set to be the marketing tones of the launch. Although partly different messages were told via on-air promotion and external media, the campaign was congruent in visual design. In the study, interviews of Subtv's staff, campaign plans and notes were used as research material. From the aspect of affecting images and emotions, the finished campaign promos and other on-air elements were analyzed. In on-air promotion, all choices in audio and visual design affect the outcome and therefore the images that the viewer constructs. The two promo series were made to affect emotions and to awaken curiosity. Other on-air elements were merely used to present program information. The campaign and the series were accepted with enthusiasm. The launch of the second season was even more massive than the first. Participation in the launch campaign of Big Brother Finland was an essential experience in the development of professional identity. When one has taken part in the creation of a massive campaign from scarce materials, tools are given to future assignments in the field of on-air promotion.