Digital banking
Due to Covid-19, e-commerce
accelerated, allowing Nordea to roll out its omnichannel netbank to 50% of its corporate customers by mid-2021.
now require social or physical contact. “If I just look at myself as a consumer,” notes Kam, by way of example, “I don’t need cash and I don’t need to go to shops.” Nordea’s move away from its legacy infrastructure to a centralised, digital-first one put it in the ideal position to serve its customers when avoiding shops became vital. It simply had to emphasise the elements of its offering that already catered to digital life across Scandinavia. In fact, once the bank was able to ensure that its staff were safe, comfortable and supported working from home, it was able to optimise pre-existing processes rather than building new ones under pressure. Tellingly, the pandemic has spanned the end of the ‘Execution’ phase and the beginning of the ‘Optimisation’ stage of the digital, mobile-first transformation Nordea announced in 2015. The €600m fall in profits from Q2 2019 and 2020 became a €1bn gain over the following year.
“We were already well on our way to becoming very digital and self-service, and – obviously apart from the physical branches – we were able to support our customers through business as usual.”
Smooth operations “We were already well on our way to becoming very digital and self-service, and – obviously apart from the physical branches – we were able to support our customers through business as usual,” Kam explains. Even in corporate transaction banking, it was more a process of extending and porting capabilities than anything else.
“E-commerce was already experiencing almost double-digit growth every year, but because of Covid, that has obviously accelerated – in B2B as well as B2C,” continues Kam. “We were already
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supporting our corporates from an e-commerce perspective – providing PSP [payment service provider] capabilities, providing smooth checkout capabilities for their online sales – but I think more and more corporates have put their ecom strategy higher up their agenda. Not only from a consumer, but from a corporate perspective, we are trying to push that needle even further towards being digital and self-service.” By mid-2021, Nordea’s omnichannel netbank had been rolled out to more than 50% of its corporate customers. None of this is ground-breaking. At base, transaction banking is about ensuring corporate customers’ daily banking needs and services run as smoothly and as cost-effectively as possible. It’s as much about ease and convenience as its consumer equivalent, making digitalisation equally appropriate. Beyond that, a good banking partner helps CFOs, corporate treasurers and finance departments understand and mitigate risk, and – “very importantly”, Kam stresses – does all it can to add value to their companies. That also comes down to convenience. The less time a finance department has to spend phoning its bank, filling out forms and troubleshooting, the more it can drive the business forward.
“So,” Kam summarises, “the core pressure is to become a more strategic player for the CFO and the company. We need to ensure that daily banking services are running smoothly and efficiently, so, where we can, we digitalise, we automate, we become more self-service... to free up time, capacity and resources for corporate treasuries to become more strategic for their businesses.”
The data case Tellingly, the banks that performed best through the pandemic had long since strategised for digitalisation, exploiting their vast information reserves to understand and adapt to how consumer preferences and technological developments were changing society. In many respects, the necessities of competing with tech- driven challengers and complying with stringent regulatory regimes have made the banking industry one of the most advanced and data-literate in Europe. This is good news for corporate customers – particularly post-Covid-19.
“The trend was happening before Covid, but over the last 18 months, there has been an acceleration in all areas around helping our customers to better manage their risk,” explains Kam. That means ensuring that corporate clients have access to dashboards and cockpits that efficiently consolidate all the pertinent data points for determining their risk positions, and that they have the relevant information to make their forecasts even more accurate. “We’re adding data insight
Future Banking /
www.nsbanking.com
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