Danske Bank – A case study in delivering a digital strategy
Regular readers will often see Danske Bank highlighted in our research studies. Why is this, and what do we particularly like about their digital banking related initiatives?
Here, we will look to answer this question and by highlighting a few of the initiatives Danske Bank have taken to make them stand out from the crowd.
- The Danske Bank Group is the largest bank in Denmark and a leading Nordic financial services provider
- All operations take place under the Danske Bank brand name
- Positioned as a leader in DK and FI and a challenger brand in NO and SE
- 5.2 million customers (2.2 million active internet users)
- Two key personal banking related promises; make it easier for customers to make financial decisions by providing proactive advice, make everyday life easier for customers by offering seamless solutions
- Vision: Setting new standards in financial services
In Q4 2012 Danske Bank introduced a new strategy ’New Standards’ in response to the new challenges and opportunities as part of which digitalisation is one element. The bank has highlighted that it will focus on industry-leading advisory services, bring digitalisation and automation of banking to new levels.
Since last year a new personal banking customer programme is in place. The purpose is to better meet customers’ increasingly different needs. It aims to offer customers fair and transparent pricing and, in particular, attractive benefits for those who do more business with them. In short – clearer customer segmentation and more focus on the profitable segments.
The ‘New Standards’ strategy was introduced at a difficult time for Danske Bank: the banking crisis had reduced the bank from being one of the most trusted brands in Denmark, to one of the least trusted. There was an unfortunate advertising campaign that caused controversy in some quarters, and some customers were charged more for services as a result of the segmentation – never a popular move. However, the bank’s standing has recovered and the strategy is paying off.
Below we will assess a number of digital banking related initiatives introduced.
1. Mobile first approach
- Q1 2011: Danske Bank introduced an iPhone app with innovative wheel-type navigation and also a camera feature for scanning paper bill data: the latter has now become a feature that is more or less standard in today’s Nordic mobile banking environment.
- Q4 2011: An iPad app went live. This app raised the bar within the field – particularly with a customisable widget overview, drag and drop functionality and graphical visualisations of incomings and outgoings.
- Q4 2012: A new public site launched in conjunction with revealing the new strategy (above). An instant reaction was that the look and feel certainly is in line with the aforementioned apps.
- Q1 2013: New internet banking service goes live which further reinforces the fact that they are focusing on delivering seamless experiences across channels.
Both of the apps have become very popular with customers and they also catch a lot of attention when shown to clients. In relation to this, we saw some interesting stats presented by Danske Bank last year showing that mobile and tablet banking together now is the dominant way to access the bank digitally and that overall internet banking usage is decreasing:
Usage split per channel (as of Aug ‘13):
- Internet banking: 46% (slight negative trend)
- Mobile banking: 47% (still growing)
- Tablet banking: 7% (growing moderately)
2. Mobile and tablet developments in line with customer segmentation focus
Since launching the apps Danske Bank have clearly focused on implementing new features which fit in relation to the types of customers and business that they want to focus on. Examples include:
- Sharedealing and fund trading functionality
- Secure messaging including the option to directly contact your advisor
- Mortgage info – summary of existing loans and current debt to real estate value ratio
3. PFM tool simplified, more prominently positioned and put at the heart of marketing
A comprehensive PFM tool has been in place within internet banking for a number of years, albeit tucked away from the most visites pages. We believe it has been used by a minority – geeks, Excel lovers early adopters, whatever you like to call them – rather than winning wholesale consumer adoption.
In order to improve usage rates Danske Bank implemented a simplified tool named ‘Spending overview’. It allows you to see incomings and outgoings per category, totals and the net. We quite like the fact that it was launched simultaneously across all channels (works and looks in the same way) and it is now positioned at the top of the current account transaction page. In addition, Danske Bank use the ‘Spending overview’ as an unique selling point in marketing efforts towards both new and existing customers.
4. Web meetings – the future way of conducting meetings with your advisor
Danske Bank went live with web meetings last year and again this certainly feels in-line with their overall strategy. In November last year we attended a conference in Copenhagen where we listened to the views of Tonny Thierry Andersen, Head of Personal Banking at Danske Bank. He raised four points, relating to the Danish market:
- 15% of all meetings are web based
- Customers are as happy with web meetings as branch equivalents
- Customers using web meetings are more loyal than the ones visiting the branch
- The process is more efficient for the bank and the customer
In relation to this, Danske Bank is actively working on improving digital signing. As it stands, customers sign more than half of the documents that can be signed digitally within internet banking. Their goal is to automate 90% of credit decisions by 2015.
5. ‘Letbank’ (Easy Banking) – targeting the elderly
Banks today face the challenge of having to evolve with changing customer expectations due to new digital facilities, and at the same time you need keep the older and less digital savvy generations happy.
In order to help late digital adopters get online, Danske Bank in Denmark facilitates step-by-step meetings across the country as a way to educate customers and help them take their first steps.
As login to a full internet banking service, by some, may be considered a bit overwhelming in terms of navigation, options and features, Danske Bank have recently introduced an ‘Easy Banking’ service. Considering the marketing activity it is clearly positioned towards elderly people. This service is an alternative to regular internet banking and contains key features:
- View account balances and transaction history
- Make transfers between own accounts
- Pay others and bills
It has very few navigation options, clearer and bigger than usual images and font size. It is an interesting approach – rather than forcing customers into an overwhelming format, create something simple that works and fit their core needs.
6. First mover in Denmark: MobilePay p2p payments app
Finally, we must highlight MobilePay – a p2p payments app similar to Barclays Pingit. It was launched in May 2013 (Denmark only) and has so far attracted more than one million users (out of the total Danish population of under six million). What stands out is that 64% of the users are non-Danske Bank users, hence an outstanding opportunity to engage with and acquire new customers.
Danske Bank clearly saw the opportunity to become a first mover in Denmark (again similar to Barclays Pingit) and surely it has been a success so far.
We like how Danske Bank is executing its new strategy and that they are not afraid of taking decisions that may annoy some customers. Developments so far follow a clear path towards serving their targeted segments even better. We look forward to following them on their journey.
If you are interested in getting more insight to Danske Bank’s initiatives or other innovative players within digital financial services sphere, do not hesitate to get in touch with us.