Money and payment in 2024

Secure and efficient systems are a precondition for the reliable flow of money and payments in society. The Bank of Finland pursued this objective through a range of actions during 2024.

Cash services and safeguarding the position of cash in 2024

Issuance of cash continued to increase

The Bank of Finland is responsible for the issuance of euro cash in Finland and acts in cooperation with other parties involved in cash supply to ensure the availability, authenticity and fitness of banknotes.

Issuance of cash continued to increase in 2024. In other words, the amount of cash ordered from the Bank of Finland exceeded the amount of cash returns. The demand for cash peaked during the summer and at the end of the year.

The Bank of Finland monitors the availability, use and acceptance of cash in Finland.

The satisfaction of Finns with the availability of cash is high, as shown by the results of the Bank of Finland consumer survey conducted in spring 2024 and the European Central Bank’s (ECB) SPACE study on the payment attitudes of consumers, conducted in winter 2023–2024. Consumer satisfaction has nevertheless decreased slightly compared to previous surveys.

According to the findings of the SPACE study, the use of cash in Finland did not decline further, but instead increased slightly from the level seen during the COVID-19 pandemic. On the other hand, according to the ECB’s Companies’ Survey on Cash, the level of cash acceptance by businesses has decreased compared with the situation two years ago.

Bank of Finland wishes to ensure continued availability of cash services in the future

At the European Union level, preparations continued for a regulation on the legal tender of euro banknotes and coins. The Ministry of Finance continued reviewing the need for changes to the regulations on basic banking services and credit institutions.

In its opinion (in Finnish) issued in spring 2024, the Bank of Finland considered that in addition to the negotiations on the EU regulations, preparations should be made for ensuring, in particular, the availability of cash at national level too, before cash services shrink to a level insufficient in practical terms for cash use. The Ministry of Finance set up a working group (in Finnish) in autumn 2024 to assess measures for improving the availability of banking services. The working group may also, as necessary, propose regulations on the availability and acceptance of cash.

The number of counterfeit euro banknotes in Finland was again low in 2024. A total of 714 counterfeit notes were detected among banknotes in circulation. This represented a slight increase from the previous year but is still very moderate.

In April, the Bank of Finland organised annual banknote seminars in Helsinki and Lappeenranta for professional cash handlers. These events focused on identifying genuine euros and foreign currencies, and the prevention of money laundering and counterfeiting.

The euro area continued the redesign process for the euro banknotes. Expert advisory groups drafted proposals for the banknote motifs, based on the themes ‘European culture’ and ‘rivers and birds’, which had been chosen by the Governing Council of the European Central Bank in 2023. The Governing Council decided on the motifs and launched a design contest for the banknotes at the beginning of 2025.

Closer cooperation over preparedness measures in 2024

Geopolitical tensions did not affect the availability of services

The Bank of Finland ensures that payment and settlement systems in Finland operate securely and efficiently.

Individual banks were targeted by extensive campaigns of cyber interference in 2024, which caused temporary disruptions for some bank customers. Several data cables in the Baltic Sea between Finland and various other countries were damaged. Despite these incidents, the systems functioned reliably on the whole, without long outages in services. The availability of the services to businesses and households was good.

Finland has a long tradition of cooperation over financial sector preparedness and security of supply, and the ongoing geopolitical tensions underline the importance of preparedness work.

Regarding oversight, the Bank of Finland participates – within the scope of its mandate – in the work to improve the preparedness of the financial sector, in the collaboration between public authorities and in close cooperation with the sector.

Bank of Finland develops preparedness measures in cooperation with authorities and the financial sector

In 2024, the work on preparedness measures was intensified, with priority being given to the deepening of cooperation and the further development of coordination.

The working group on the management of financial market disruptions, of which the Bank of Finland is a member, started operations in 2024. Cooperation in the sector, within the framework of the National Emergency Supply Organisation, has also progressed smoothly. Enhancing cooperation both between the authorities and within the sector will also be one of the priorities in 2025.

In spring 2024, the Bank of Finland published an annually updated table on infrastructure oversight. The table presents an overview of the systems most important for Finland’s financial system, the oversight responsibilities concerned and relevant remarks on the systems.

In 2024, the Eurosystem’s oversight cooperation focused on the preparation of oversight assessments on Systematically Important Payment Systems (SIPS). The assessments are prepared every third year, and the period in between is used for remedying, in cooperation with the system operator, any deficiencies identified.

The assessments will be finalised in the first half of 2025, after which the findings and relevant corrective measures will be discussed with the operators. 

The oversight of settlement systems focused in 2024 on ensuring the smooth and reliable functioning of the pan-European securities settlement platform (T2S) launched in Finland in autumn 2023, and promoting in the Finnish market practices that are compliant with EU standards.

In 2024, preparations were also made for changes to be introduced in the Finnish market, such as the use of central bank money for the payment of dividends. 

In May, the Bank of Finland organised the annual Payments Forum (in Finnish) for payment ecosystem participants. The Forum discussed payment topics of current relevance. The Nordic Cyber in Finance 2024 conference for the financial sector and Nordic and Baltic central banks took place in October, hosted by the Bank of Finland.

TARGET Services and international cooperation in 2024

Simulator software supports quantitative analysis in oversight activities

Within the analytical environment of the Eurosystem’s TARGET Services, the Bank of Finland continued to maintain and improve its BOF-PSS3 payment and settlement system simulator. The simulator software plays a significant role in the Eurosystem’s annual stress tests of critical participants.

In August 2024, the 22nd international simulator seminar for central banks’ oversight experts, operators and researchers was held in Helsinki.

Strong international cooperation using the simulator software continued in 2024, for example in a joint analysis project with the International Monetary Fund (IMF), in which the simulator was used for estimating the scale of potential damage to payment systems from cyber threats. The final report on the analysis was presented at the IMF conference ‘Managing Cyber Risk of The Financial Sector’ in December 2024. 

Bank of Finland supported significant payment system development projects

Two-year preparation phase of Eurosystem’s digital euro project has proceeded as planned.

A digital euro would complement cash and would extend the options available for consumers and businesses for different forms of payment. It would ensure that the single currency is available to all in the euro area, in both physical and digital form.

The instant payment project launched by the Payments Council was finalised in 2024. The project produced a rule book on instant payment and a governance model for a possible instant payment solution in Finland. Further progress towards instant payment will be made in the form of collaborative work between the sector and the relevant authorities.

Retail payment services provided in Finland have lacked an electronic alternative to card payments that would be available to all consumers with uniform conditions.

A payment instrument that is not dependent on payment card rails would promote competition and resilience in the field of payments. The objective of both the instant payment initiative and the digital euro is to launch this type of alternative on the payments market.

TARGET Services operated without significant incidents

The Bank of Finland is the national centre of expertise in Eurosystem TARGET Services, which are based on central bank money, for credit institutions operating in Finland and the other Nordic countries and other financial market entities.

The uses of TARGET systems include settling monetary policy operations, instant payments and securities transactions in central bank money.

TARGET Services, such as T2 liquidity management and payments, TIPS instant payment settlement and T2S securities settlement, operated without significant incidents in 2024.

The Bank of Finland and the participants in its TARGET component system focused on introducing the functions not implemented earlier in connection with the 2023 launch of the new T2 payment system, and also on, for example, the T2 contingency procedures. In 2024, the Bank of Finland supported its Nordic TARGET participants in their migration to TIPS.

In July 2024, the ECB published the Eurosystem’s policy on payment institutions’ access to payment systems maintained by central banks. In practice, non-bank payment service providers (non-bank PSPs) can in future join the TARGET system directly.

More detailed guidelines and participant criteria will be published in 2025. The Eurosystem policy was prompted by the changes resulting from the entry into force of the EU Instant Payments Regulation (IPR) and the aim to increase competition. The Regulation required that PSPs in the euro area offer, by 9 January 2025, the service of receiving instant credit transfers. The Bank of Finland published an analysis article on the Eurosystem’s policy:  ‘ECB grants payment institutions access to its payment systems (in Finnish).’

At the end of 2024, a total of 51 participants in Finland and the Nordic countries used the Bank of Finland TARGET component system. In 2024, the average daily value of interbank fund transfers and other payments settled in the component system ‘TARGET-Suomen Pankki’ was approximately EUR 72.6 billion.

Bank of Finland participated in planning and preparation of ECMS launch

The Bank of Finland participated in the planning and preparation work for the launch of the uniform Eurosystem Collateral Management System (ECMS), and coordinated the project closely with its monetary policy counterparties.

The ECMS will replace the separate collateral management systems maintained by the national central banks. The Governing Council of the ECB decided in September 2024 to reschedule the ECMS launch to June 2025 to enable the counterparties that will be joining the ECMS to achieve sufficient testing coverage in a stable environment.

Customer satisfaction with the Bank of Finland TARGET Services was high in 2024: 4.7/5.