The strategy took 9 months to prepare, and the bank says it’s dedicated to discovering what customers need, and providing that.
Danske Bank’s Forward ’28 strategy is levelled at improving the customer experience through providing a more tailored and holistic advisory experience centred around a digital front door.
The bank invested significant resources into the strategy, which took nine months of resource-intensive planning to complete, and was based on a comprehensive survey of 20,000 people in the Nordics.
“Preparing for this strategy was one of the bank’s most extensive efforts I’ve ever personally observed,” says Christian Bornfeld, Head of Danske Bank’s Personal Customers Unit. “Considering what the bank has recently gone through, we wanted to take the opportunity to truly take an outside-in perspective and thoroughly understand what customers are looking for.”
The bank is well underway in finalising the challenges of the previous five years, and its Forward ’28 strategy is its biggest move to strengthen and reaffirm its long-standing history in Denmark and the Nordics.
Pushing relevance for the customer
The bank is not “doing digital just to do digital” but rather developing a business model that combines strong digital solutions to offer convenience and holistic advice for its customers in their everyday lives.
The bank’s survey results revealed, among other things, that customers expect banks to be better able to adapt to their needs. Another revelation was that customers want simpler offerings, tailored to their individual needs. They also don’t want to be bombarded with offerings they don’t understand.
Danske Bank intends to solve this through a modular solution that provides a range of simple base offerings that customers can choose, with the option to select add-on services for more personalised needs. The bank will use customer data and interactions to best propose suitable offerings based on the customer’s needs and preferences.
“Preparing for this strategy was one of the bank’s most extensive efforts I’ve ever personally observed.”
Christian Bornfeld, Head of Danske Bank’s Personal Customers Unit.
The Bank intends to fundamentally change a customer’s banking experience through its innovative engagement model. It will move over to a “digital front door” solution where processes are re-thought towards a digital-first model, with the flexibility to cater for specific needs or events that require human-led advice.
“We’re asking ourselves how we can become a great bank for families, young people, elderly people, and people with different preference profiles,” says Bornfeld. “Customers want us to look at them more holistically, offering them more than just products, but also looking at their economy, and anything else specific to them.”
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The digital front door aims to be the doorway to whatever customers need.
Regulatory factors come into play. Banks are limited by regulations as to how wide their offerings can stretch, but Danske Bank’s vision is to provide whatever people need help with, within those regulatory confines. Those needs could encompass family needs, safety, peace of mind, health and well-being, generational transitions such as parents helping their children buy their first home, or life planning. It might even go as far as recommending legal services or career coaches to help people transition into a new career path or into retirement.
“Not all of these offerings will create a financial impact for us,” says Bornfeld. “But it will increase our relevance towards our customers and ensure a deeper relationship with them.”
Partnership with Infosys
Danske Bank already has one of the strongest digital platforms in the Nordics. To strengthen that, it has partnered with Infosys, a massive multinational software services company with over 300,000 employees, and Infosys bought Danske Bank’s IT branch in India.
Infosys offers Infosys Topaz, an AI-first suite of services, but the bank did not express specific plans for this suite, although part of its deal with Infosys includes access to any and all internal technology, whether AI or otherwise.
“Of course, we’re looking at generative AI like everyone else is, and we do see some potential use cases, but the technology is not mature enough for customer-facing interactions,” says Bornfeld. “We take our correspondence with customers very seriously, and generative AI’s tendency to hallucinate means we’re only currently using it where that definitely wouldn’t pose a risk.”
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Generative AI’s “hallucination” is a technical term that describes the unexpected outputs derived from the multi-layered structure of neural networks that makes generative AI work. AI models receive inputs through one layer, process them, pass the results of that process to deeper and deeper layers, and these finally combine into an output. The structure of those hidden layers is what helps AI process both the meaning and the context of a block of text, but it’s a black-box process that data scientists still don’t fully understand.
“AI isn’t a silver bullet, and it certainly won’t replace advisors in its current form,” says Bornfeld. “But it does have use cases, particularly in summarising texts or consolidating inputs from external sources that advisors can then use, and we’re already using it for that.”
Three things to know about partnering with Danske Bank
The bank recognises that partnerships are essential in its new strategy. It has historically pursued larger, more traditional partnerships, but is open to establishing new partnerships that bring mutual benefit.
When looking at assessing partnerships, three assessment criteria are key
- Goal alignment.
- Ability to scale.
- Compliance.
“We have to make sure our visions are aligned,” says Bornfeld. “That might sound simple, but we’ve experienced several examples where both parties had a different definition of success, so that needs to be explicitly defined.”
Fintechs should also consider their ability to scale. For a product or service to be interesting to a large bank, the potential users should be in the millions rather than the tens of thousands, and fintechs should pay close attention to how they can realistically scale to those levels.
On the regulatory side, the bank has simplified much of its paperwork and created several boilerplate documents to prevent overwhelming new fintech partners with legalese. “But fintechs should also recognise that this is a regulated sector,” says Bornfeld. “We don’t do regulation because we enjoy it, but because it’s a characteristic of the industry.”
Tradition balanced by agility
Danske Bank is a pillar of Danish society, and has been a major contributing factor in Denmark’s transformation from a primarily agrarian society to the economic force it is today.
In 1871, it was the first bank in the country to directly serve the farming community, in contrast with the trends of the time. That decision significantly impacted the agricultural sector’s ability to grow because it finally had access to capital, a move that would forever change the course of the Danish economy for the better.
Fast forward 150 years, and Danske Bank has played essential roles through periods of deflation and inflation, housing booms, workforce changes, and globalisation. It expanded into a Nordic bank, and became the leading bank in digital solutions about 7 years ago.
The bank currently serves over 3 million customers, the largest number in Denmark. Its Forward ’28 strategy leans on the respect the institution has earned over 150 years of blazing new trails that others eventually follow, but it’s also adapting proactively to a new level of agility so it can better serve the customers that depend on it.
“We’re relieved to finally be able to look forward after a few years of having to be inwardly-focused while we repaired and restructured a few fundamentals,” says Bornfeld. “We paid extensive attention to understanding the customer in this strategy because, moving forward, we’d like people to assess us on our execution and daily delivery, unbiased by any preconceived ideas of our brand.”
