As customers, our demands for the services we expect are increasing. This also applies to our banking operations. There is a constant demand for new features. Among the trends is that trend sustainability has become a competitive parameter for banks. Therefore, Danish bank customers can now see how their investments perform in terms of ESG.
Even though we are no longer in physical contact with our bank or bank advisor as often as before, it doesn’t mean that we can settle for less service. On the contrary. Both individuals and companies expect not only more service but also more specialized and customer-specific service. The competition for customer favor has simply shifted from physical bank branches to digital ones. This is evident at the Danish IT company BEC Financial Technologies, which develops solutions for Danish financial institutions. Deputy CEO Lars Malmberg is confident when he studies the feedback from the 17 banks in the BEC community.
“Customers are continually demanding more from their bank and the services it can offer. We have seen this very concretely in connection with the increased focus on sustainability in recent years. This has led us, in close collaboration with one of our member banks, Nykredit, to speed up development in this area. As one of the first deliveries we have developed a solution – a so-called ESG score – that allows customers in Danish banks, through their mobile banking solution, to see how their investments perform in terms of ESG, Environment, Social, and Governance. The solution is the first of its kind in Denmark, several banks have already started using the new feature, and Lars Malmberg expects that more banks will join in a relatively short period.
“In the future, I’m confident that we’ll collaborate with a number of exciting companies from the FinTech environment when developing new solutions. Partnerships are the way forward for BEC – it’s at the core of our strategy, and for that reason, we’re proud to be engaged with Nordic FinTech, which can drive inspiration and foster partnerships in the Fintech industry in general.”
Lars Malmberg, Deputy CEO at BEC Technologies
ESG as a competitive parameter
Tonny Thierry Andersen, member of the Executive Board and Head of Banking at Nykredit, explains that in their daily interactions with customers, they have experienced general satisfaction with Nykredit’s mobile banking solution. However, there was a need to improve functionality in the investment area.
“Market dynamics meant that we not only wanted to improve in this area but also, to do it relatively quickly. The question then was how we should approach the situation and how we could not only match but also surpass our colleagues in the industry. In principle, we knew where we wanted to go when it came to the new functionality in our mobile bank, but at the same time, we had to ensure an agile organizational structure whose primary purpose was to support the new features,” explains Tonny Thierry Andersen.
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Møns Bank, a smaller Danish bank in the BEC ‘community’, was also among the very first to introduce the new ESG score to their customers:
“If you wish to change the world towards the better, you need to start somewhere, and that could very well be by looking at how your investment portfolio can contribute to push towards sustainable development. With this new tool we support our customers do that – this is very much in line with the trends and interests among banking customers”Per Sjørup Christiansen, CEO Møns Bank
“As we encounter new user requirements, it’s crucial to think about partnerships, and in that respect, I think BEC has been quite innovative and has made it easy for us to integrate the new ESG features into our mobile banking. We will see more and more partnerships, which will also be necessary to accelerate the power of innovation,”
Tonny Thierry Andersen, member of the Executive Board and Head of Banking at Nykredit.
Accessibility and democratization
This resulted in a development project based on customer wishes for new features, and according to Tonny Thierry Andersen, ESG and sustainability will bring significant change in the financial sector in the coming years. Not just because customers want it, but also because the business world continually faces new requirements when a company needs to demonstrate sustainable behavior. We can mention the new EU taxonomy, a classification system for economic activities that qualify as climate and environmentally sustainable, the equally new CSRD directive (Corporate Sustainability Reporting Directive), and the so-called ESRS standards (European Sustainability Reporting Standards), which set out specific reporting requirements.
“But our private customers also care about sustainability, and therefore it is important that ESG is not just for the elite. There needs to be a democratization process, and that is best supported by making the information accessible in an easy and simple way, including by adding the new features to our mobile banking solution. That’s where the customers are, and it’s where most interactions take place, so it wouldn’t make much sense to develop an app that might just gather dust in a corner of the smartphone. We need to meet customers at eye level,” elaborates Tonny Thierry Andersen, and he is confident that this development collaboration is not the last.
Many more development projects
In addition to increased functionality in mobile banking, experience has been gained in form of new ways of collaboration and the team spirit and energy in this that can be used in other contexts. Lars Malmberg from BEC agrees with this view. He expresses that this contributes to a framework on how we can make more frequent deliveries to customers when desires for new functionality arise. On a more general level, he states that BEC has a societal responsibility to educate banks and their customers to use digital solutions, especially because artificial intelligence will shape the future.
“Artificial intelligence is a mega-trend that will redefine many of the solutions we need to develop in the future. They are becoming more and more sophisticated, which essentially means that we need as many as possible on the technology wagon, simply to ensure that the solutions are actually used. At the same time, however, it’s important that users find the solutions we develop to be good, and therefore it’s important that we constantly focus on the good customer experience as we extend technology collaboration to areas beyond ESG,” says Lars Malmberg.
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Great opportunities for the Fintech environment
He further emphasizes the importance of customers having trust in the solutions being developed, which is also highlighted by Tonny Thierry Andersen from Nykredit. The very close development collaboration between BEC and Nykredit, which has meant that employees have been at BEC, participating in both steering groups and various working groups, paves the way for future development projects. Not only between BEC and Nykredit but also between different actors in the financial sector. These collaborations will largely be built on partnerships, where transparency in both data and architecture is a necessity.
Both Lars Malmberg and Tonny Thierry Andersen see significant opportunities in the interaction between established actors in the financial sector and the FinTech startups that are emerging as rapidly as mushrooms in a damp forest floor. According to Lars Malmberg, they are in constant dialogue with several of these startups, and he has no doubt that solutions from external partners will eventually be integrated into BEC’s platform architecture. So, the development collaboration between BEC and Nykredit has in several ways helped shape the future of coming development collaborations, where development and business strategy merge in an agile environment.
How the ESG Score Works
BEC a major Danish IT provider, delivering IT to Danish banks and approximately 25% of Danish bank customers have their main banking relationship with a BEC financial institution. The new ESG score can be used by bank customers in both mobile and online banking, as well as by the financial institutions’ investment advisors in their interactions with customers, depending on how the individual financial institutions use the solution. With the new solution, customers can directly see an ESG score for each individual investment product they have invested in, including stocks, bonds, and investment funds.
Customers also receive ESG scores for their overall investments and sub-portfolios. The ESG score is developed by the globally recognized MSCI ESG Rating, which analyzes over 8,500 companies and 680,000 investment products worldwide. By comparing MSCI ESG ratings, investors and stakeholders can gain insight into how different companies perform in terms of sustainability-related metrics. A higher ESG rating indicates that a company performs better in these areas and incorporates sustainability into their business focus.
