Posted on Tuesday 5 December 2017 by Ulster Business

Danske digital transformation

Danske Bank’s Chief Digital Officer Søren Rode Andreasen, left, and Chief Executive Officer Kevin Kingston 

When you’re the chief executive officer of a bank, every day is busy.

That is never truer than on financial results day or when interest rates move.

So when Ulster Business found itself interviewing the CEO of Danske Bank in Northern Ireland on a day which saw the release of its third quarter results and, coincidentally, UK interest rates raised by the central bank for the first time in 10 years, you could forgive him for being otherwise distracted.

However, Kevin Kingston is fully focused on the interview at hand and exudes an air of calm which only someone with a firm grasp of their business’s future could have.

The results show a busy first nine months of the year for the Danish-owned bank with both the corporate and mortgage divisions witnessing a 30% ramp up in lending activity.

In Corporate that includes a major refinancing deal with the Herbert Group facilitating its acquisition of 27 new KFC restaurant outlets, funding for the redevelopment of The Weaving Works site in Belfast, which is being transformed into a five storey Grade A office building, and also support for a multi-million pound investment by Toomebridge kitchen component manufacturer Uform.

Meanwhile, the bank’s share of Northern Ireland’s mortgage market has also increased markedly during the period, and is set to be boosted further, Kevin said, by its investment in a slick new digital system for third party brokers, just one of a plethora of investments across the bank.

Record low interest rates of 0.25% - up until the day of our interview - weighed on profits, as they have for all banks across the UK, but that will be helped by the Bank of England’s decision to hike rates to 0.5%, a decision which emerged only hours before our interview.

But Kevin was more focused on talking about investment, and highlighting that the bank was “doing more for customers”.

“We made a conscious decision to increase investment because there are huge opportunities for Danske Bank to drive customer experience, by delivering new digital solutions like, for example, our new invoice finance platform for business customers”.

As it has been for some time at the bank, digital is at the crux of this investment and an area where it is basing its future, something which is clear to see at its Donegall Square headquarters where this interview is taking place.

A tour of the open plan offices reveals space which is more reminiscent of a fintech company than a bank, with hot desking, breakout areas, stand-up desks and a general committed adoption of technology.

As a nod to this, for this interview Ulster Business eschews the traditional reporter’s notebook and pen in favour of typing notes straight into the laptop, a move which raises eyebrows elsewhere but is considered nothing more than a sensible approach in Danske Bank.

The use of a rather aged iPhone to record our conversation as a backup did however feel slightly out of place given Kevin’s own top-of-the-range tablet, Apple Watch and smartphone, but you would expect nothing less from a committed techie.

The same is also true of the man sitting beside him.

Søren Andreasen has taken up the newly-created role of Chief Digital Officer for Danske Bank in Northern Ireland after an extensive recruitment process, a rare job title in the Northern Ireland business community, but one which highlights how important digital is to the future of this organisation.

“The industry is going through huge technical change,” Mr Kingston said.

“In January we’re going to see the advent of Open Banking, which will change the course of the financial services marketplace over the next few years, creating services which haven’t been available in the past in the UK.”

Open Banking is an initiative introduced by the Competition and Markets Authority which will enable personal customers and businesses to share their data securely with other banks and with third parties.

By doing that people will be able to compare products on the basis of their own requirements quickly and securely.

It means that lenders such as Danske Bank need to become even more relevant to their customers in the future if they are to thrive and that relevancy will come through an intelligent, continually evolving digital offering.

That’s where Søren, who had previously been Development Director at Danske Bank headquarters in Copenhagen with responsibility for managing Group Core Banking Infrastructure, comes in.

He will help to drive Danske Bank in Northern Ireland’s technical charge by overseeing the planning and implementation of the bank’s digital proposition for both personal and business customers here. He also leads the development of its local IT strategy, with a focus on infrastructure and security.

The digital drive is being undertaken in collaboration with Group colleagues in Denmark, taking learnings from a region which is currently ahead when it comes to use of technology in banking.

“I haven’t ever handled a cheque,” Søren, a Danish native, said, a statement which highlights how much further ahead the region is, one which abolished cheques a year ago. “We have huge potential here in Northern Ireland to bring on board some of the progress we’ve made in the Nordics.”

He’s well aware that just providing technology is not enough, rather the right technology.

“If we demonstrate our value, customers will embrace the offering. We need to show how our strategy of providing a multi-channel solution can offer huge benefits which will add value for our customers.

“If we do that, it will sell itself.”

That Danske has 10 robots working in Belfast in the form of artificial intelligence software - at present won’t come as a shock to those who have knowledge of the bank’s work in Northern Ireland.

“They’ve freed us from a lot of mundane routine tasks and allowed us to focus on the things that really matter,” Søren said.

They and the digital team at Danske Bank – working in a very fintech manner in agile teams so as to speed up the development process – are coming up with new ways to grow the digital offering on the personal customer side, which currently includes ebanking, mobile banking and the likes of Apple Pay and Paym.

An important point to note for those who still use the branch network is that they too have been bolstered by the appointment of customer experience advisors who are on hand in key branches to help with transactions, a recognition that the Bank still believes the optimum customer solution is a mix of personal interaction and digital.

In terms of support for the business side, a new digital invoice finance system has just gone live to speed up that process considerably - with the team now working on Future Financing, a digital project also aimed at business banking - which is looking to increase the speed of response for lending decisions through digital credit automation. It is set to go live to customers next year.

Such evolution means Danske Bank is able to compete with challengers from the fintech world, Søren said.

“Part of the journey we’re on is changing the traditional banking culture, learning from the start up community, but bolstering those lessons with the heritage and tradition which Danske has in Northern Ireland.”

This digital transformation doesn’t just have a positive impact on customers, but has also boosted Danske Bank internally.

“People within the bank are really excited because they can understand why the bank needs to be digitally innovative,” Kevin said. “That’s really encouraging and we’ve also been recruiting a growing team of digital professionals to further enhance our reputation for innovation.”

With a smile, Søren gives a different slant on what digital transformation means for banking.

“Banking has become cool again.”

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