Danske Bank: Setting the Pace

Hard and fast figures are hard to come by, but there are few who would argue against the statement that Danske Bank is the market leader when it comes to corporate and business banking here in Northern Ireland.

Danske’s own figures put the bank ahead of the chasing pack, and it’s unlikely that any other surveys would produce a different result. But complacency isn’t something that Danske’s Managing Director of Corporate &Business Banking, Shaun McAnee, wants to see creeping in.

“We’re not transfixed by being the biggest, so marketshare isn’t everything. But we do think that we have about a third of the market. What we do set out to be is the best bank.Not by an inch, but by as big a margin as we can.” he says.

“How do we do that? We’v edone a huge amount of workaround customer satisfaction, and our survey levels are looking really strong. We’re certainly ahead of our competitors on customer satisfaction ratings, and our aim is to stretch that gap.

“Every business says that it puts the customer at the centre of what they do, but we try to bring that into everything we do.We work to find out the negatives from our customers and we work on those pain points. They become our priorities. The whole process means that we’ve had to re-see ourselves, and I think we’ve got our heads around it.

“If we get this process right,everything else will follow.”

Within the local Danske structure, Corporate & BusinessBanking looks after some 7,000medium and large business customers. There are 70relationship managers in the team and they’re supported by locally-based specialists. One of Danske’s USPs is a dedicated dealing room offering FX and Interest Raterisk management services to the bank’s customers. Danske also has specialist teams across asset finance, invoice finance, cash management and trade and export finance operations.

“That totals about 140 people in customer facing roles and between us all we manage a balance sheet of £2.7 billion, with 97% of that deployed within Northern Ireland.”

A direct result of the renewed strong focus on customer satisfaction is the recent internal appointment of Lyndsay Adams as Head of Business CustomerJourneys. She takes up the story of her innovative job title.

“Historically, we would have focused on products for our customers. What we’re doing now is coming at banking from a different perspective. We’re bringing our customers in to the early development of our solutions. Understanding what their pains are when it comes to banking experiences. Then we can design our solutions around what they tell us.” Lyndsay explains in a large second floor room at Danske’s Donegall Square West headquarters that is every inch an ‘ideas factory’....with illustrations, thoughts and concepts written across every wall and multiple white boards.

“The key to what we’re doing is that we’re asking our customers the right questions and we’re learning from what they tell us. Our services and products are now built from there.

“We know that we’re number one for customer satisfaction. But we also know that there is a tidal wave of change in banking and financial services. So focusing on just ‘good’ customer experiences, in itself, isn’t enough in this landscape.

“What does customer satisfaction mean? It means that expectations were met....but otherwise the experience might be forgettable. A great experience is one that they’ll remember. Customers feeling more confident, feeling more valued, feeling as though they’re more in control. That’s what we’re aiming for.

“As part of the process, so far, we have interviewed nearly 300 of our customers and received a really wide range of views and opinions. From there, we have designed personas based on different types of customers. When we’re designing solutions, we make sure that they’ll fit each different persona.”

Niall Harkin, Head of Organisational Development for Corporate & Business Banking – another recent internal appointment - picks up on the theme. “There has even been a shift in how we measure our business performance. It’s not all about financial metrics and sales figures. Up to 50% of our KPIs now are based around customer service metrics. If we look after customer satisfaction, in other words, the business will perform better as a whole.”

A chartered accountant as well as an experienced business banker and former head of Danske’s business acquisition team, Niall is also the current chairman of the Ulster Society of Chartered Accountants.

“My role at Danske is all about the change agenda and delivering the change agenda in the front line,” he says. “And a key part of that is delivering digital solutions that make a real difference to our customers.”

Danske’s very latest digital innovation is its Future Financing platform. The bank’s rationale is clear-cut.

“We’ve seen a lot of change in the competitive banking arena. A lot of new entrants have come in, primarily to personal banking but some of them are making moves into business banking. That’s a challenge to us, but also an opportunity.

“Future Financing is a new approach to delivering support to our customers – digital with a human touch. This isn’t a small change....it’s a big leap forward. And it makes the whole credit process much easier for our customers, and further empowers our relationship managers.”

Initially, the platform will be used by Danske’s relationship managers dealing with customers. But it has the potential, a little further down the line, to be used directly by those business customers. “Our customers should, in the near future, be able to go online and request an overdraft increase on a smartphone at home. It will be as easy as that.”

How does Future Financing work? It incorporates what Danske calls a ‘credit engine’, using customer data and advanced analytics to make a decision on online credit applications.

“The system makes that credit recommendation in seconds, and that’s the key strength of this piece of innovation,” adds Niall Harkin. “We’ve seen excesses being approved in 40 seconds and the money being in the customer’s account within eight minutes. For an overdraft, we’ve seen approvals in four minutes and access to money well within 24 hours.

“A facility letter is already issued through automated technology but we’re introducing digital signing later this year....allowing letters like this to be signed online. This is already live in Denmark and we’ve seen cases where the whole overdraft process takes ten minutes....from initial contact through to access to funds.

“So, when we use the term ‘transformational’, we absolutely mean it......”

Future Financing was launched in the bank’s Belfast Business Centre in January, and it’s now been extended to the other regional business centres. “The relationship managers just love it,” says Niall Harkin. “I don’t think they thought it would be as good as it really is. And we’ll be working to improve its functionality over the coming months with a target that by next year almost all of our new money applications will be supported by this technology.”

Danske’s relationship managers, according to Shaun McAnee, have been getting a very positive reaction from business customers. “The customers can’t believe how quick and seamless the process is,” he says. “It is driving customer experience to higher levels.”

“And our goal is to take it to the next level. We’re planning to have a pilot up and running later in the year for small business customers, whereby they can go online, get a quote, review it and have access to funds in five or ten minutes. And, if you want to speak to an adviser, you can.”

Geoff Sharpe, as Head of Corporate, leads a team responsible for some 300 of Danske Bank’s largest customers... businesses with turnovers of £15 million and above across a diverse range of sectors, including many of NI’s ‘Top 100’ as well as largescale organisations like housing associations and public sector bodies.

“We have our own dedicated corporate relationship managers, with many specialising in key sectors such as commercial property, agri-food, manufacturing and pharmaceuticals,” he adds. “And we have close, valued relationships with key industry bodies and business partners like law and accountancy practices.”

“Many of our Corporate customers today have been long standing customers of the Bank through their growth from SME, to larger national or international companies – so we have a deep understanding of their business as their needs and requirements have got more complex, having partnered with them through that journey”

It’s a competitive marketplace at the top end of the business space.

“There’s no doubt that alternative funding solutions are more readily available in the corporate sector,” says Geoff Sharpe. “As well as the pillar banks, private equity is a growing feature of this market and customers have a number of potential sources when it comes to funding growth”

“We see those options as playing an important part in the market, and in many cases we sit alongside alternative funders. There’s no question that as a result of the options available, we need to be more than a traditional Corporate bank by continually innovating, providing best in class products and value adding relationships”

“Our share of the top 100 NI companies has grown from 25% to more than 60% in the last five years and it’s continuing to grow. 2017 was a record year for new lending and Q1 2018 has followed that trend. And our new lending activity is broadly split between two thirds existing customers and one third new customers. That tells us that our customers are investing for growth, and that we also have a compelling value proposition to continually attract new customers”

“The key reasons for that growth are the strength of the team, an agile approach, credit decisions made locally and a best in class digital offering. Future Finance is just one new transformational digital initiative. There is more to come.”