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The Social Insurance Institution of Finland to test a new type of digital smart money

The Social Insurance Institution of Finland – Kela and Tieto will carry out a proof of concept in 2019 which will seek to develop a digital payment guarantee usable either with a mobile application or a payment card.


A new type of digital payment guarantee, the smart money could help digitalise some of the processes related to payments. Kela and Tieto will develop a proof of concept in 2019 designed to test smart money either with a mobile application or a payment card as an alternative to paper-based payment guarantees.

Kela currently still uses paper-based payment guarantees to a certain extent. Smart money would be suited to situations where payments need to be targeted to a specific use. While paper-based payment guarantees must be presented at the point of sale, users of a smart money would have equal standing for example with customers using a payment card. Other uses for smart money could additionally include gift cards, insurance payouts as well as meal, exercise and culture vouchers.

The proof of concept is based on the premise that smart money is easy to use either with a mobile application or a payment card. The user experience is planned to be similar to existing digital payment methods. Smart money could be used also in off-hours and it could save a visit to the Kela customer service point.

At this stage, smart money will not yet be tested among customers. This is to ensure that the solution meets high-level service process, regulatory and technology requirements. The proof of concept is part of Kela’s innovation programme and its efforts to evaluate emerging opportunities related to payments. The proof of concept will leverage the open-source Corda and Hyperledger Indy blockchain technologies.

“We are experimenting with emerging technologies, such as blockchain, to investigate how they can best be harnessed to serve our customers in their various life events”, says Janne Pulkkinen, Head of Innovation Unit, Kela.

“Through the use of new technologies, we are able to create completely new kinds of services and business models for society. In the smart money proof of concept, we are testing how blockchain technology can digitalise essential services to improve Kela’s customers’ everyday lives and streamline processes for all stakeholders”, says Markus Hautala, Head of Blockchain Center of Excellence at Tieto.

Scheduled to be completed by the end of 2019, the proof of concept will be carried out by Kela and Tieto as well as their advisors the Finnish Tax Administration, the Financial Supervisory Authority, Borenius Attorneys and a service provider that will be named later. The results of the proof of concept will inform future decisions on whether to involve a wider range of participants, including individual customers.

Kela, the Social Insurance Institution of Finland, provides social security coverage for Finnish residents and many Finns living abroad through the different stages of their lives. Among the social security benefits offered by Kela are family benefits, health insurance, rehabilitation, basic unemployment security, basic social assistance, housing benefits, financial aid for students, disability benefits and basic pensions.

Tieto aims to capture the significant opportunities of the data-driven world and turn them into lifelong value for people, business and society. We aim to be customers’ first choice for business renewal by combining our software and services capabilities with a strong drive for co-innovation and ecosystems.

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