“Eliminate bank notes and branches”, said Frank Madsen, PA business transformation expert, with a twinkle in his eye. He was talking at PA Consulting Group’s recent Executive Seminar, where guest speaker Michael Rasmussen, CEO of Nykredit – one of Denmark’s leading financial services companies – spoke about the challenges his company faces.
The financial sector is experiencing big changes. It needs to transform, and it needs to add more value to its products. Only the smart and proactive will survive,” Frank said.
According to Michael Rasmussen, one of the major challenges for the sector is around handling the EU’s numerous regulatory requirements following the financial crisis. Nykredit is one of the few banks that has been classified as a systematically important financial institution (SIFI). This means the company’s core capital needs to grow by 2019.
He said, “We need more capital, more funding and more liquidity. Adapting banks’ business models and business processes, in light of these new regulations, creates an entirely new agenda for the financial sector. It’s a huge challenge today and in the future.”
Moreover, he said the sector needs to regain the trust of its clients. Nykredit’s business model focuses entirely on its clients and follows the client ‘from cradle to grave’.
He said, “I’m sure this is the winning formula for Nykredit. We also need to make sure that we are as efficient as our competitors, that we have the right products at the right prices. Overall, we need to be client-focused.”
As an advisor to financial companies, Frank Madsen is aware of the niche players that now offer clients new customer experiences alongside traditional banking products. He referred to German bank Fidor, at which you can become a client only by signing up via Facebook, and where the amount of ‘likes’ determines your saving deposits rate.
“Fidor offers a new and exciting client-segmentation tool. The client enters the bank via Facebook, determines his or her ‘type’ as a person. Based on this choice, the client is offered a certain kind of financial counseling.”
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