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Expert Panel: Who will own the customer relationships in the future landscape of finance?

Line Munkholm Haukrogh, Chief Strategy Officer, Danske Bank

Who will own the customer relationship in the future landscape of finance?

The short answer is the actors that manage to accommodate customer needs the best.

The somewhat longer answer is that issues like sustainability and data security are increasingly appreciated and expected by our customers, in addition to more basic core needs like financial overviews and advice. Additionally, we also experience technology and digitalisation playing an even more significant role in our competitiveness, and that is relevant for customer relationships too.

Simplicity, transparency, and trust are keywords. Customer relationships stay with those actors that remember to think ‘customer first’ – always. Even when handling other new requirements or complexities.

What does that mean for the customer’s experience of the bank and financial services?

The increased focus from established banks, but also from fintechs, means, all things being equal, that the customers are getting an overall better experience with the bank and our services. From the perspective of Danske Bank, MobilePay and Subscription Helper are seen as good examples of solutions that keep customer needs in focus.

Fundamentally it could be said that we meet the same needs, but the context for how has changed, and it is necessary for us to follow this development and to understand the customers and their context if we want to stay relevant.

What does that mean for your business?

It is essential to clearly know what kind of bank you want to be. And thereby also understanding which role banks and financial institutions will play in the future. More than ever, we need to look forward: What tendencies will be dominant in 3-5 years?

We will continue to invest greatly in digitalisation and involve our customers in the development process. We will also ensure that the understanding of customer needs does not only focus on using technological development for creating the best solutions and services, but that we manage to fully connect it to the important role we have in society. For many customers, good service is not just about themselves and their own needs, but also how our and their behaviour affects the society and the world we inhabit right now and in the future.

Martin Hegelund, CMO and Co-Founder, Ageras Group

Who will own the customer relationship in the future landscape of finance?

I’m seeing a lot of services turn more niche-oriented, but everything is getting connected through deep integrations. Customer affiliation is therefore more distributed – and the customer’s journey can start in many places. However, I think the tools being used will often reside wherever customer relationships are naturally strongest.

What does that mean for the customer’s experience of the bank and financial services?

The bank, in the traditional sense, is getting less relevant – aside from delivering the infrastructure that they have a monopoly on (for instance Nemkonto). With PSD2 you can now do a lot of what you earlier needed to do in the net bank directly in the accounting program. Therefore, the bank as an interface will get less relevant.

Conversely, the banks could increase customer affiliation by, for instance, trying to make the net bank the companies’ primary tool for integrating invoicing, accounting software, CRM, and so on. Otherwise, they will increasingly be a pure ‘utility’ service, and I think that will make building customer loyalty hard.

What does that mean for your business?

We are already doing everything we can to integrate our software as much as possible. For instance, Billy’s API accounting software is entirely free and open, and anyone can integrate their services directly with Billy. That is because we want to make the accounting software the cockpit of the company. For the future, we are actually envisioning that our largest competitors will be the banks, since we through the software will be delivering more and more of the services the banks have a tight grip on today.

Mikkel Jensen, Industry Manager at Google Denmark, with responsibility for the banking sector, among other tasks

Who will own the customer relationship in the future landscape of finance?

If the financial sector follows the same line of development as other industries, we can expect to see a consolidation on fewer, but larger, platforms. In the same way that Amazon has developed into a partner platform – and Google answers quite a few queries directly in the search function – I believe that banks in the future will be the connector between a variety of financial services. This eases friction for the customer, and it fits with all the other trends we see in digital development.

In my view, it is the banks that should own customer relations, regardless of whether we look at established banks or neo-banks like N26 or Danish Lunar. The big question will be whether the traditional banks can stay relevant for generations Z and Y, and whether they will accept the more open API school of thought, where external applications can easily communicate with the bank’s interface. In the same way, the neo-banks need to prove that they can build reliability.

What does that mean for the customer’s experience of the bank and financial services?

From the customer’s perspective, it will be an advantage to have access to external financial services via the normal net bank. White-label solutions are nothing new and they have long been a focus of Saxo Bank, and they give the customer access to a far superior world of investments than a small bank would be able to develop on its own.

For the customers, this means they will have access to better and cheaper services than today – for instance with robo-advisors with lower fees, faster transactions across countries, and AI-based loan planning.

What does that mean for your business?

For Google, this means that we are working closely with both fintechs and established banks to talk to customers digitally at the right time and with the right messages. We are already seeing an increase in requests about digital products and onboarding, and we are only expecting this development to accelerate.

Additionally, Google Pay is a fine example of a service benefitting both banks and customers. It is launched via the customer’s own bank and is the easiest and fastest form of payment possible. The banks are still allowed to take their payment fee, and the individual banks don’t need to hire a team of developers to work on a corresponding technology.

Simon Buchwaldt-Nissen, Head of Strategy and Transformation at Nets

Who will own the customer relationship in the future landscape of finance?

Whichever supplier provides the best customer experience. It may be those that we today consider core suppliers of financial services. But it may also turn out to be entirely new actors, who through API’s get direct access to customer accounts. A worst-case scenario for banks and card providers would be them gradually losing their grip on customer relationships and being reduced to account infrastructure and issuers of payment instruments, while other fintech/paytech actors control customer relationships.

What does that mean for the customer’s experience of the bank and financial services?

Maybe we need to take a look at the development we have seen in the telco industry. With the liberalisation of the market, we have seen new actors make bids in areas where established tele-operators are still more challenged by MVNO’s (Mobile Virtual Network Operators), who are frontrunners of infrastructure and focus on positive customer service or on differentiated services.

We can imagine the same commoditisation may come to affect the finance industry, where the youngest generation, for instance, never have close relationships with their banks but choose suppliers through the primary services they know and trust – for instance the maker of their smartphone or their social media.

What does that mean for your business?

We need to be ready to adjust to the new world and support emerging needs on a purely technical level – and at the same time we need to remain competitive and be able to service the large majority of customers who – all things being equal – for the next many years will still come from a world we know. As a partner of businesses and banks, we need to be able to help our customers keep up, for instance through activation of the provided knowledge on preferences and behaviours that is ‘hidden’ in the data, so they can improve and individualise digital meetings with their clients.

Get your copy of Copenhagen Fintech 2021 Magazine here

Sebastian Kjaer
Sebastian Kjaer
Sebastian is editor in chief of the Copenhagen Fintech Magazine. As partner and editor at TechSavvy Media he covers the Danish startup ecosystem on a daily basis

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