Dynexco ? Your Bank Without a Physical Face
By Pekka Vanttinen, Fri May 18 00:00:00 GMT 2001

Here comes a new mobile banker ? virtually yours.


A petite lobby in the heart of Helsinki with elegant seats and a huge TV screen playing MTV hits. In the adjacent room, amidst the empty cardboard boxes, a group of twenty year olds, in their jeans and T-shirts sit eyes glued to their iMacs and PCs.

Sounds familiar?

At first encounter, Dynamic Excellence Corporation (Dynexco) appears to be another one of those IT start-up companies. That might be the case, but not quite. Set up by a few school time friends, the company entered the business arena less than a year ago.

Dynexco claims to be among the first (if not the first) to offer a mobile payment system operated on GSM-technology. The idea is nothing complicated – SMS based payment service. One might say it’s one step back and two steps forward.

In one sense, DNX MobileBank pretends that WAP never happened. To date, their service offerings are primarily based on SMS text messaging. The company is betting on the SMS platform as a potential mobile payment infrastructure given its popularity and accessibility today.

”In Finland, there are less than 20,000 WAP clients compared to 3.7 people carrying a GSM-phone. For the time being it doesn’t make sense to create WAP services. Later on, our system is transferable to WAP, but the market positions are being decided already now,” says Jukka Laukkanen, the CEO of Dynexco. Jukka Laukkanen, and Mika Heikkilä, the Sales Director. (The only two in the company wearing a suit and a tie. The interview is finally on).

How does their simple system work then? First one has to open a mobile account at Dynexco and then transfer some money to it by using bank transfer, direct charge or mobile phone. After that, by first dialing a bank code, it would be possible to conduct payments, purchases and money transactions in different currencies in real time (almost) anywhere in the world.

But, remember it takes two to tango. All this is possible only between two mobile accounts. For an individual to use the service to purchase a product, the merchant will require an account opened at Dynexco too – so all involved parties are client of Dynexco.

”I’ll give you an example. In a restaurant, after having my meal, the waiter brings me a code consisting of a few digits. I dial the code and send it. It opens the mobile account of this particular restaurant. Then I dial the sum, approve it and send it. The waiter recognizes my payment instantly and brings me the receipt,” explains Laukkanen.

”Or, imagine your kid phones you at 3 a.m. on Saturday morning. He’s been dancing the night away, the buses are not running, money’s gone. Daddy, please! In ten seconds, you’ll send some money from your mobile account to his. He’s able to take a taxi and pay the driver, who also happens to enjoy a mobile account.”

What if the needs and the willingness of the regular punter are yet again overestimated? Compared to season’s greetings, sending your hard-earned money out there in the orbit may prove to be a different matter.

”OK, fair enough. DNX MobileBank is not making any old ways obsolete. It only complements the current methods of dealing with payments and transactions,” says Mika Heikkilä.

”The atmosphere resembles the time when credit cards were first introduced. People were very suspicious of the ’plastic card’. But, of course, today, our main target group is the younger generation. They are very impatient when it comes to queuing up in the bank premises or outside cash points in sleet and rain. Moreover, this system fits in nicely with the prevailing chat-culture,” adds Mika Heikkilä

Currently, Dynexco has a balance of capital of around USD 2.2 million. The ownership is divided between three parties. The biggest share belongs to Jukka Laukkanen,CEO, who before going wireless spent ten years in the banking sector (last six in Conventum). The remaining part goes to Thomproperties, an investment company run by the family Jouhki and Veikko Laine, another high-profile investor is best known for his groceries wholesale business.

Dynexco is preparing a new investment round both in Finland and abroad for the forthcoming autumn.

From one perspective, Dynexco fits in the mould of fresh IT companies well. Most of the fund is poured into technical infrastructure (delivered by two Finnish firms, JaverDel and Grenwill), funky premises and the rapidly growing personnel - by the end of the year the thirty strong staff should have almost tripled.

However, unlike many newcomers, Dynexco hasn’t put all the eggs in one basket. Apart from mobile banking, the menu includes also a web-based banking solution and a service called VoxMox - where it’s possible to order a recorded message read out by a celebrity of your choice. The service is the only one in the world where you are able to select a different message to different persons. And it even makes your mobile phone understand your calendar and inform your schedules, for example to your business colleagues and to your family members.

For some mysterious reason, services such as VoxMox often prove to be the sector’s breadwinners. By the end of this year, Dynexco hopes to collect at least some revenue from mobile banking also. The launching of DNX MobileBank should commence in June. This year’s estimate is to have ”some ten thousand” account openers. Unbowed in their faith, the young entrepreneurs have calculated that in five years time half the payments should be done by using a mobile phone.

The customer pays either a yearly fee of roughly USD 62 or USD 0.70 per transaction. ”Presently, just one real time money transfer from one bank group to another can cost up to seventy marks,” Heikkilä is quick to point out.

In its marketing, the company relies heavily not only on the anti-conglomerate sentiments, but on the promise of something extra. ”In this country, there’s around USD 36 billion lying in the banks without virtually no interest rate whatsoever. We’re ready to offer around 4 per cent. If the banks start competing with us by using similar rates, it would mean them a profit loss between USD 1.2-1.8 billion.

That’s a direct income transfer to a regular Finnish consumer; for a fairly well-off family joining our system could mean a net income increase of around USD 737 a year. This is people’s banking,” says Laukkanen, like any populist politician.

Perhaps even more is expected from abroad where in many countries the old-school banking system is less developed than in Finland. In Europe, discussions with major operators, banks and central firms are said to be underway.

Obviously, a new venture involves risks and threats. Topping the list is security. Dynexco makes everything it can to convince that wireless financial transactions are as safe as the existing ones. In case of emergency there’s a 24-hour customer service. Rule number one: Don’t leave your account open after paying your fifth pint.

”I find it very difficult to believe that even the smartest hacker could enter this system. But, if so, it would only have to happen once,” admits Jukka Laukkanen. ”A bigger threat is that we’re treading on the toes of the vested interests of the Big Boys. That could trigger off a major campaign against us and the like.”

Pekka Vanttinen has a Master's degree in Social Sciences from the Helsinki University. He has studied Journalism at the City University in London from where he earned his MA in International Journalism in 1995. He is contributing to a number of Finnish magazines on a regular basis covering a wide range of subjects from sports to culture to economics. He also works as a stringer for The Daily Telegraph newspaper.