The bank must become digital – and stay trustworthy

When reading forecasts of foreign bank analytics and experts, a lot is said about the changes in the banking industry. Consumers are becoming more and more digitally oriented, the percentage of smart phone users is constantly on the rise, they wish to have banking services at hand, and they are especially careful with time management as they do not want to lose time anywhere, not even at a bank. Are you noticing similar trends?

The analogue is making way for the digital—also in banking. Surrounded by computers, telephones and touch screens we are able to perform most banking services anytime and anywhere—comfortable, easy, saving time and money. NLB is keeping in step with the times.

How does this affect your marketing approach, are marketing and sales channels a lot different than 5 years ago?

Firstly, I would like to point out that we still believe in the old saying that people make the business and we wish to offer our clients personal services and advice also in the future—in this, we believe, NLB has certain competitive advantages and skills. At the same time our marketing approach is to follow trends and in the last years we are thinking about focusing mostly on digital or web and mobile channels, social media etc. NLB will be where our clients are, mostly in the desire to make banking services accessible and to improve user experience. Therefore, in addition to branches we are developing new options of doing business remotely. For a long time now, NLB Klik bank users are able to perform banking services at home or on a coffee break. Well, they still can't take out a loan, but this possibility is also not that far away. With our new Klikin mobile bank we are one of the pioneers in Slovenia, since we offered users the »in-payment« functionality that enables them to transfer money via their phone address book. According to early positive responses, we can say users love the solution.

What about the future of your customers, looking 5 to 10 years into the future? How will your marketing approach differ, will the bank still maintain its own IT infrastructure (or is it going to be moved to cloud more often), will the bank branches differ from what they are today?

The future is certainly digital in a larger amount (but in my opinion not entirely—human interaction is despite of everything still key in many areas). The younger generations are »native« users of modern technologies that we, a bit older, have learned to use, some more, some less successfully. But remember, we have tackled driving cars or using PCs much better than our grandparents. Each generation has its own »native« technologies, the use of which comes naturally to them. For the new generations, this is remote automated business operations, mobile payments, moving to cloud, virtual branches, virtual bankers etc. This is no longer considered to be science fiction, but a part of everyday and banks are relatively quick in adopting such modern solutions. Also because we see major competition not only in other banks but also in companies that primarily deal with other types of business operation and are in some digital aspects simply better than us.

Your clients are also companies. What are their needs (in relation to business operations digitalization), are you noticing any changes and trends also in relation to them?

At NLB d.d. we are aware that the needs of different types of companies differ in relation to their size and the way they do business. The needs and the user experience are key also in the segment of legal entities. Ultimately, users of legal entities systems are individuals, who are used to having a good user experience with applications and systems they use in their spare time. What they want is easy and quick communication and specific information and offers at the right time.

Is ensuring a high security standard harder when there are companies involved?

Digital business security is one of the key questions for the future. Here we have to really dig deep and develop the best solutions. At NLB our goal is to gradually introduce upgrades in electronic business of legal entities that will ensure security and the appropriate user experience as well as fulfill regulatory requirements.

And if you compare these two segments, individuals and companies, who, in your opinion, is “a more demanding client” and why?

All our clients are equally important to us and all receive a great deal of attention. Demands of all are increasing, but also changing. A bank must develop and maintain the competence of innovation, understanding of change, introduction of novelties —and still keep the old and the most important competence at a bank, the competence of stability and sustainable business. A bank must become digital—and stay trustworthy.

To what extent does the segment of companies find the new digital banking products appealing?

Despite all the modern trends using new technologies, the companies are still rather traditional, because the complexity of some business operations alone requires interaction with banking experts. However, there is a big tendency for digitalization of transaction banking as well as other regular business operations with the bank.

In your opinion, are there digital banking services that the segment of companies does not have yet, but would find beneficial?

Certainly, we have a lot of ideas. If we take a look at information: offering users a good user experience means that the user receives the information that represents added value to him. Clients with surplus financial means will benefit more with information on investments, and clients with the need for more assets will want to find out more about funding—information will not only be segmented, but entirely personalized in the future. However, in every case the user needs to be able to take action as soon as he receives the information without any complex approval processes and the need to visit a branch. Digitally or in person—but up-to-date and with a positive experience.

When developing new products for companies and individuals, to what extent do you include customer opinion—do you do research, acquire opinion from the market, from bank clerks etc?

I personally like to talk to a lot of different people to get as much feedback as possible. Otherwise, we at the bank check the usability of every new product or service in the pilot phase with our clients using standard methods. Results of questionnaires effect the direction and the scope of our development significantly. 

When developing new products for companies and individuals, is it also important that the product is sellable via digital channels, and if so, to what extent?

Most definitely. Digital channels save time for us as well as our partners.

What are the most common obstacles you come across while developing a new banking product?

The biggest challenge is definitely fulfilling all the regulatory requirements that are sometimes even outdated and mostly limiting the bank much more than the non-bank competition, and the regulators will have to eliminate this imbalance one day.

To conclude, do you also think, as Brett King mentioned in his interview, that due to all this new technology and digitalization the CEO of a bank will have to start thinking of himself as the CEO of a technology company?

I have just recently read:  »Today we have the technology that enables us to have unlimited world-wide communication with an unlimited number of people, anyhow and anytime. However, technology can’t decide what we want to say.« The reality is, we need technology, we’ll have it and use it, and it will always be developing and we’ll have to know it. But it is not the only thing that is important. In my opinion it is as important to understand clients, technology and human relationships inside as well as outside a bank to be a good leader.

 

Interview has been published in Halcom Magazine, October 2015

Janko Medja, President of the Management Board of the NLB