The digital journey of Arion Bank

Telling a good story on successful business measures is gratifying. Arion Bank has compiled detailed information on how it went about creating its internal accelerator, Digital Future, and presenting real impact of delivering new digital offerings. Investing in internal and external innovation has become part the Bank‘s genome.

Working with business development in banking is interesting at the moment. Everyone, not just some, in banking, are wondering how FinTechs will penetrate the financial markets. There are more obvious low hanging fruits like payments than others. The thing is that we have only seen the tip of the iceberg yet.  New regulations like PSD2 and GDPR are imminent and will have a substantial effect on how banks and FinTech will conduct their business. My feeling is that we are at the stage like the telecommunication market was in the beginning of the century where the incumbents (legacy national telecommunications providers) were forced to give third parties access to their distribution network (and some more). Some 15 years later, the telco industry is not what it used to be. Competition is fiercer, their product is content and data instead of fixed line revenues.

How to start?

Mid-year 2016, Arion Bank took the strategic decision to entirely change its approach to how products are developed and delivered. In short, the bank created an internal accelerator, referred to internally as Digital Future. In essence, the accelerator is a 16 weeks project, where employees with the relevant expertise are co-located and their responsibility is to re-engineer a single customer journey. The team of 10-15 people are committed to this single project only during the 16 weeks and leave their daily job. In the first 17 months of its operation, Digital Future has launched 15 new digital offerings.

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Huge impact on volume and productivity…

Since the launch of the first service, the response has been very positive. Not only has usage of those services increased the volume of ordered services / products, but Arion Bank has lowered the cost of supplying these services at the same time. The primary mission of Digital Future is enhanced customer experience and secondary mission is to lower the bank‘s cost with and end-to-end processing approach. That means to minimize any human interference when customers use the digital channel, e.g. customer guidance with intuitive interface, customization of products, ordering, processing, delivery, contract documentation, filing and storage.

… and customer satisfaction

Increased usage is a good sign of approval. Better yet, increase satisfaction is even more gratifying. For certain processes, e.g. digital credit assessment (before taking a mortgage) the Bank has seen an unprecedented improve in the NPS (Net Promoter Score) for those services. In just twelve months of 2017, the NPS went from -2 to +32.

Documenting the digital journey

Arion Bank has compiled detailed information on how it went about creating its internal accelerator, Digital Future, and presenting real impact of delivering new digital offerings. Investing in internal and external innovation has become part the Bank‘s genome. The articles can be viewed either as a blog or in white paper format. The stories are supported with demos, statistics, methodology and strategy. I encourage you to follow the stories.

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Screenshot from Arion Bank’s Innovation Journey blog

About Arion Bank

Arion Bank is a leading Icelandic bank offering universal financial services to companies, institutional investors and individuals. These services include corporate and
retail banking, investment banking, capital markets services, treasury services, asset management and comprehensive wealth management for private banking
clients. Arion Bank’s balance sheet was more than 1,100 ISK billion (€8.9 billion) in 2017. Arion Bank only has operations in Iceland.

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