ANNUAL REPORT 2012
DANSKE BANK CASE
BUILDING THE BRIDGE AS YOU WALK ON IT BY JESPER ADELTOFT
T
he past years have been turbulent times in the world of business, not least in the financial sector. Banks face tougher regulations and stricter demands to their capital and liquidity position. Many private customers lost faith in the banks during the financial crisis, and the huge task of rebuilding trust in the industry is only in its early innings.
COMPANY FACTS
Eivind Kolding took over as CEO of Danske Bank in 2012, and, together with a new management team, he carried out an extensive organisational transformation.
Danske Bank is one of the leading financial enterprises in Northern Europe. Danske Bank is organised in three business units: Corporate and Institutional Banking, Personal Banking and Business Banking.
Danske Bank went from a six-stringed, country-focused organisation to having a segment focus with three business areas:
PERSPECTIVE INVENTING THE FUTURE When moving into unfamiliar territory, it’s common practice to look to the experience of others and learn from those who do well. But what to do when bold and innovative moves are needed to develop a unique proposition in the market, get ahead of competition and be the first business to plant a flag in an unexplored field? This is a perpetual challenge for first movers in every industry.
Corporate and Institutional Banking, Business Banking and Personal Banking. One of the new management team’s first priorities was to develop a new strategy for Danske Bank. For Personal Banking the reality was that the bank was losing money, more in some markets than others, that many customers were unprofitable, that customer satisfaction was low, and that the bank no longer had a distinct position in the market. So, the task for the new management was to execute a financial turnaround and simultaneously define the road to a competitive and profitable future for the bank. The future of personal banking
The development of new technologies and platforms will undoubtedly continue to change retail banking. The Nordic countries have an extraordinary position as the internet penetration and the share of the population using online banking are close to unmatched. Danske Bank saw this as an opportunity to embark on a journey to take personal banking to the next level, allowing customers to serve themselves on state-of-the-art digital platforms when performing their daily banking transactions while offering more service and tailored counselling to customers with complex needs.
There are ups and downs of pioneering. You develop invaluable knowledge and experience about new products or technology, creating an asymmetric relationship between your business and competitors, leading to temporary monopolies. But it requires resources and time, it most often leads to costly experiences, and your competitors might be able to follow your moves with a substantially smaller risk and investment. So, how do you make sure that your business is one of those for whom the benefits outweigh the risks? The key is to keep looking into the future and learn from experience. Those who plan well to exploit the pioneer’s position and dedicate resources to consolidate their advantage will most likely come out successful in the long term.
QUARTZ+CO
The internet penetration rate and share of online clients make the Nordic countries a good platform for taking retail banking into the future
Leading change
In order to agree on the scope of the strategy and the new direction, the management team needed to create alignment on a number of parameters. The first step was to establish the baseline for the new organisation and a joint view on the strategic direction and key levers in order to obtain a solid starting point for defining the future ambition. The next step was to translate the strategy into executionable programmes and concrete projects, including tools for following up and measuring progress. Lastly, it was crucial to mobilise the organisation, define a strong governance model and initiate execution. In today's fast-paced business environment, most large companies will recognise the dilemma of handling daily operations and structural changes in parallel. Danske Bank is no exception, and therefore an agile virtual organisation with the sole focus of transforming the bank has been created, while the remaining employees focus on operating the bank efficiently. This dual focus on running the bank while changing the bank will enable the tightrope walking of ensuring short-term financial sustainability while setting new standards within four areas: Advisory services & solutions, Customer interaction, Transparency & financial strength and Responsibility in order to make Danske Bank the most trusted financial partner for its clients.
The development of new technologies and PLATFORMS will undoubtedly continue to CHANGE retail banking
THE JOURNEY TOWARDS THE FUTURE BANK WILL CHANGE THE ENTIRE BANK
From focus on the entire market to clear segment prioritisation.
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From independent channels to integrated channels.
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From broad physical footprint to the best self-service platform.
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From reactive service to proactive care. BANK
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