Adapting to the changing mobility of finance

By revising its banking model and focusing on customers, strategic financial advice and technological innovation, Danske Bank knows how to push boundaries in an industry constantly evolving


What do customers really want? That is the key question any company cannot ask itself too often. In the financial sector, we forgot to ask ourselves this question during the heydays of technical financial innovation that lasted until the financial crisis broke out in 2008. In its aftermath, it should be clear that the customer is the key to success, not the financial markets. The question of what our customers really want is more relevant than ever.

At Danske Bank, we have asked this question to our business customers – who range from small entrepreneurs to large multinational companies – and we are actually surprised that the answers are remarkably similar across customer segments and across the Northern European markets. Our business customers want their bank to:
– provide know-how and enable them to make the right financial decisions;
– be proactive and consider their best interests;
– enable them to focus on their business instead of banking issues;
– provide relevant information that improves the customers’ decision power; and
– inspire excellence and new solutions.

This can be described as customer centricity, but we need to take it a step further than that and create a common agenda with the customer.

Strategic financial advice
Customers want financial empowerment-enabling them to seize their opportunities. And they want to know that their bank will stand by them. It is also worth noticing that customers do not ask for specific products, the lowest prices or the longest maturity on loans. They ask for value in terms of financial know-how and solutions so that they can meet their strategic ambition, reduce risk, save money and run their business smarter and leaner. If we succeed in offering our customers the financial know-how they ask for, our products will sell themselves since they are the bricks our solutions are made of.

In my opinion, we sometimes tend to look at customers from a product portfolio perspective. We need to reverse our way of thinking and look at our product portfolio from a customer perspective. At least, it has been made clear to us that we need a value-based banking model and not a product-based one.

But what does a bank need in order to provide value and real financial empowerment to a business? When we developed Danske Bank’s new business banking strategy last year, we focused on three core elements:
– Make sure we have excellent advisers who can enable customers to identify opportunities.
– Meet customers’ need for strategic financial advice to help them reach their full potential.
– Deliver technological innovations such as user-friendly digital solutions.

The most successful consulting firms, such as McKinsey, Boston Consulting and Bain and Co, are characterised by being strong strategic partners for the top management in companies.

We need to obtain the same position in business banking; that is, we must be a trusted financial partner for customers by providing excellent advice and financial strategies that support their business plans.

Many of the most successful SMEs in the Nordic region have found a niche, where they are global market leaders or runners-up. Many of them have expanded rapidly and internationally during the past decade, and as a result, they often have just as complex needs as large corporations.

Redefining strategy
When we analysed our portfolio of SME customers, it became clear that they would benefit greatly from our products and service concepts for large corporations. Loans and deposits are still core banking products, but we need to refine the way we work with SME financing and liquidity management. We need to develop tools that build on the combined insight we have together with the customer.

Today, SME customers require strategic financial advice, capital markets products and risk advisory and trade finance services. We have adjusted our business to meet these needs and have adapted our products and services for large corporate customers to the needs of our SME customers, so that they can benefit from specialist teams and dedicated senior advisers.

We serve our small SME customers with less complex needs via phone and our online channels. This means that they can consult our highly skilled advisers via phone or at online video meetings at the time of day, or evening, that fits into their schedule.

Becoming the preferred financial partner for a small SME customer with a turnover of a few million euros and a large SME customer with a turnover of hundreds of millions of euros are obviously very different tasks. To do that, we need to take a consultancy and value-based approach to business banking and offer a range of different solutions on the basis of a detailed segmentation of customers. By investing significantly in training programmes and focusing on the needs of the different customer segments, our advisors become highly skilled partners for our customers and not only product specialists.

Seamless banking
We believe that the winning business banks of the future will be characterised by a strong ability to deliver user-friendly, intuitive and Apple-like solutions to their customers. Business banks need to learn from companies like Apple and Google.

Most business banks have invested significantly in developing their cash management systems in order to give customers a good online platform for managing their cash flow. But so far, banks have mainly developed user-friendly customer interfaces for personal customers, for instance mobile and tablet banking apps and graphic account overviews. It is time to develop the interfaces for business customers, who can benefit greatly from a seamless banking experience.

We have therefore launched business banking apps for mobile phones and tablets, enabling our customers to handle their business finances at any time and anywhere. We are investing heavily in seamless banking solutions and will expand these solutions extensively in the coming years.

We want to be the leading bank in our field when it comes to digital and mobile business banking solutions. We have an ambitious development plan for our online, mobile and tablet channels. Before the end of the year, we will introduce online advisory meetings on our cash management platform. Next year, we will invest significantly in the development of professional eTrading. We have only seen the tip of the iceberg here.

The most important thing to get right for a business bank is people. We believe that by creating frontline centres of excellence focusing on specific customer segments, we will be able to move from a product-based banking model to a value-based banking model, where customers experience top-notch competencies, dedication and decision-making power. By creating such frontline centres with specialised staff, decision-making power can – to a very large extent – be transferred to the frontline.

We believe that the winning business banks will be those with the most dedicated and empowered staff; the banks that really understand what their customers need; and the banks with financial know-how that can support their customers’ business strategy. It will be the banks who offer cool technology that gives business customers the smooth and user-friendly interfaces that they have been used to for years.