Our study examines organizational and sectoral developments in the Estonian banking sector. It can be concluded that despite the unstable economic and legal environ- ment during the transition period, banking in Estonia has been much more profitable than in many developed countries. But at the same time the effectiveness of banking in a transition economy is volatile and the risk of bank failures is high. The Estonian banking sector is clearly dominated by foreign banks that have brought stability and modern banking techniques with them and increased the competitiveness of the market. We also prove that new electronic channels are more cost-effective than traditional channels and explain the difference in the cost structure.
Aarma, A. and V. Vensel (2001) “Banks’ retail customer satisfaction and development of bank- customer relationships”. In Estonia on the threshold of the European Union: financial sector and enterprise restructuring in the changing economic environment, 85–106. Vello Vensel, Clas Wihlborg, eds. Tallinn: Tallinn Technical University.
Aladwani, A. (2001) “Online banking: a field study of drivers, development challenges, and expectations.” International Journal of Information Management 21, 213–225.
https://doi.org/10.1016/S0268-4012(01)00011-1
BankAway! 2001 Net banking benefits! Sheer acceleration. (2003) In: Electronic banking: the ultimate guide to business and technology of online banking. Edited by SCN Education B.V.Spronger-Verlag New York Inc.
Barisitz, S (2000) “The development of the Croatian banking sector since independence. Focus on Transition. Oesterreichische Nationalbank, No 2, 96–122.
Bonin, J. and I. Ábel, (2000) “Retail banking in Hungary: a foreign affair?”. Working Paper, Hungarian National Bank 356.
https://doi.org/10.2139/ssrn.260759
Booz-Allen & Hamilton, Inc. (1996) Internet banking: a survey of current and future development. [Survey was limited to North American banks who currently had a Web site, among which were 34 commercial banks, 19 credit unions and 3 thrifts/FSBs] February. Financial Services Group, New York.
Borensztein, E., J. De Gregorio, and J.-W.Lee (1998) “How does foreign direct investment affect economic growth?”. Journal of International Economics 45, 115–135.
https://doi.org/10.1016/S0022-1996(97)00033-0
Burr, W. (1996) “Wie Informationstechnik die Bankorganisation verändern könnte,” Bank und Markt 11, 28–31.
Claessens, S., A. Demirguc-Kunt, and H. Huizinga (2001) “How does foreign entry affect domestic banking markets?”. Journal of Banking and Finance 25, 5, 891–911.
https://doi.org/10.1016/S0378-4266(00)00102-3
Daniel, E. (1999) “Provision of electronic banking in the UK and the Republic of Ireland”. International Journal of Bank Marketing 17, 2, 72–82.
https://doi.org/10.1108/02652329910258934
Demirguc-Kunt, A., R. Levine, and H.-C. Min (1998) “Opening to foreign banks. Issues of stability, efficiency, and growth”. In The implications of globalization of world financial markets. Seongtae Lee, ed. Seol: Bank of Korea.
Emor (2006) “E-monitoring report”. Available at
http://www.emor.ee/arhiiv.html?id=1371 [in Estonian].
Forrester Research (2003) “The business case for right-channelling”. June 2003.
Glass, A. J. and K. Saggi (1998) “International technology transfer and the technology gap”. Journal of Development Economics 55, 369–398.
https://doi.org/10.1016/S0304-3878(98)00041-8
Gruben, W., J. Koo, and R. Moore (1999) “When does financial liberalization make banks risky? An Empirical Examination of Argentina, Canada and Mexico”. Federal Reserve Bank of Dallas, Center for Latin American Economics Working Paper, 0399.
Gurău, C. (2002) “E-banking in transition economies: the case of Romania”. Journal of Financial Services Marketing 6, 4, 362–379.
https://doi.org/10.1057/palgrave.fsm.4770065
Ilison, O. (2002) Head of e-banking development in Hansabank. Personal interview. September 2. Internet World stats (2006). Available at
http://www.internetworldstats.com/stats.htm
Kanaya, A., D. Woo (2001) The Japanese banking crises of the 1990s: sources and lessons. (Essays in international economics, 222.) New Jersey: Princeton University.
https://doi.org/10.2139/ssrn.879319
Karjaluoto, H., M. Mattila, and T. Pento (2002). “Electronic banking in Finland: consumer beliefs and reactions to a new delivery channel”. Journal of Financial Services Marketing 6, 4, 346– 361.
https://doi.org/10.1057/palgrave.fsm.4770064
Kokko, A. (1994) “Technology, market characteristics and spillovers”. Journal of Development Economics 43, 279–293.
https://doi.org/10.1016/0304-3878(94)90008-6
Measuring (2004) “Measuring and analysing profit development in the euro area”. ECB Monthly Bulletin (January) 63–73.
Mols, N. (1998) “The behavioural consequences of PC banking”. International Journal of Bank Marketing 16, 5, 195–201.
https://doi.org/10.1108/02652329810228190
Pohjola, M. (2002) “The new economy: facts, impacts and policies”. Information Economics and Policy 14, 133–144.
https://doi.org/10.1016/S0167-6245(01)00063-4
Sathye, M. (1999) “Adoption of internet banking by Australian consumers: an empirical investigation”. International Journal of Bank Marketing17, 7, 324–224.
https://doi.org/10.1108/02652329910305689
Satoshi, M. (2001) Financial moral hazard and restructuring in russia after the financial crises. (Discussion Paper, 524.) Japan: Kyoto University.
Stepic, H. (2002) “The strategy of RZB in Central and Eastern Europe”. SUERF Studies 19, 55–68.
Sõrg, M. and J. Uiboupin (2004) “The competitiveness of Estonian banks in EU”. In Integration of financial sectors of Baltic states into the European Union: challenge and experience, 77–116. Mart Sõrg and Vello Vensel, eds. Tallinn: Ühiselu.
Süld, R. (2002) Head of e-banking in Sampo Bank. Personal interview. September 6.
Dynamo (2001) = “The dynamo of E-Banking”. Business Week Online, April 16.
Toomla, R. (2003) Interneti mõju Eesti Ühispanga finantstulemustele. [The impact of Internet banking on Eesti Ühispank financial results]. Bachelor’s thesis. University of Tartu. Uiboupin, J. (2005) Foreign banks in Central and Eastern European markets: their entry and influence on the banking sector. (Doctoral dissertation of the Faculty of Economics, 12.) Tartu: Tartu University Press.
