Cash and payments

The Bank of Finland is responsible for the availability and issuance of cash in Finland. In addition to domestic cash supply, the Bank of Finland's duties include tasks related to the provision, development and security of payment systems and collateral management services.

The payments landscape was in transition in 2020, particularly in response to the COVID-19 pandemic.

The use of cash continued to decline at an increasingly rapid pace as card payment gained in popularity. Contactless payment and mobile payment (i.e. payment without a PIN) increased.

The number of interbank payments transferred via the TARGET2-Suomen Pankki system also increased in 2020.

The Eurosystem examined the possibilities of a digital euro

Electronic payment is a key part of everyday life, and its share in payments will continue to grow. If the objective is to ensure that in the future, too, payments will be executed in central bank money, the Eurosystem must be part of the change. As the use of cash has decreased, the Eurosystem has considered whether the central bank should also start issuing a digital means of payment. The Eurosystem launched in 2020 work on a euro area digital central bank currency, i.e. a digital euro. A digital euro would complement euro banknotes and coins.

As a result of the growth in electronic payments, an increasing share of retail payment services are provided by commercial entities. The task of the Eurosystem is to ensure the smooth operation of payment systems also in exceptional circumstances.

Development of financial sector cyber security

The possibilities created by digitalisation are made use of extensively in financial sector services.

This also exposes the entities to cyber risks. An attack on a bank or a payment system could, in addition to the direct impacts, cause a major loss of confidence in the financial system.

To improve their protection capabilities, financial sector entities try to identify vulnerabilities in their systems by testing them with methods used by real-life attackers. In such penetration testing exercises, an attacker commissioned by the entity tries to, in a controlled manner, gain access to the entity's production systems.

The TIBER-EU framework adopted by the European Central Bank in May 2018 provides guidance on penetration testing. In 2020, the Bank of Finland published a TIBER-FI Implementation Guideline that supports testing and enhances the resilience of the Finnish financial sector.

The Eurosystem enhances the sustainability of cash supply

Cash supply is one of the most operative tasks of central banks, and therefore it also creates environmental impacts. The impacts on the economy are, however, very small.

The environmental impacts of cash supply are created in production, transport, processing, counting and sorting, and storage. The largest environmental impacts of cash supply are created outside the central banks.

The Eurosystem has taken a decision that, as of 2022, banknotes will be destroyed by incineration and no longer taken to landfills.

The Eurosystem is also examining the possibilities of replacing the raw material of banknotes in the next series.