Nordea personal Banking Investor Presentation Topi Manner, Head of - - PowerPoint PPT Presentation

Nordea personal Banking

Investor Presentation

Topi Manner, Head of Personal Banking 12.12.2016

Executive summary

Challenges and new opportunities

• Changing macro-trends
• Shifting customer preferences

driven by new digital technologies

• Falling customer satisfaction
• Reshaping the service model to

meet customer expectations and lower cost

2

Our new ambitions

• Highest customer satisfaction in

target customer groups

• Highest employee satisfaction

rating amongst peers

• Market leading position in

profitability (best in class C/I ratio to low 40:s) Focus areas of the new strategy

• Low-cost, digital (mobile)-first and

lean core offering for all customers

• Tailored value propositions for

selected, high-value customer groups

• Individualized, risk-based pricing

Strengthening customer satisfaction, financial performance and role in society Results and Expectations

Personal Banking in Brief

3

• Number of customers:

– Denmark: – Finland: – Norway: – Sweden:

• Market position:

– Denmark: – Finland: – Norway: – Sweden:

• Number of employees:

– Denmark: – Finland: – Norway: – Sweden:

Nordea’s home markets

# customers Market position # employees 2.9m 1.7m 0.8m 4.2m #2 #2 #2 #4 2,900 2,400 900 2,100

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# 1

Customer satisfaction

• Leading CSI for

affluents and home

• wners, on par for
• ther customer groups

# 1

Employee satisfaction

• The most satisfied

employees among peers

# 1

Profitability

• C/I improved to low

40s

The ambition for Nordea Personal Banking by 2021 remains

Macro trends are challenging the current Personal Banking model

• Current target customer group is

shrinking − Decreasing demand for face to face advice − Increasing customer urbanisation

• Current value proposition not suited

to growing segments − Difficult to attract young, high potential customers − Difficulty penetrating the affluent markets

• Banking sector exhibiting low

growth − Low growth banking income forecasted − Investments/pensions, payments and mortgages expected to

• utgrow (~4-5% CAGR) overall

market

• Strong competition for selected

profit pools − Digital first banks targeting affluent complex advise (e.g. Nordnet) − Several banks building strong digital solutions and expanding in payments

5

• Continued regulatory tightening

− MIFID II

• Imposing higher requirements

advisory services in order to keep retrocessions − PSD II

• Opening up banking standards to

new third party providers

• Pressure on fees may:

− Open up market further − Affect our ability to provide investment advice

Shifting advisory preferences Continued regulatory tightening Low growth and high competition

6

Key changes to reach the goals

Invest to attract, build share of wallet, and retain our highest value customers

• Both current and future affluents (young potentials)
• Homeowners

Build a strong mobile-orchestrated relationship model

• Mortgage
• Savings & investments

Improve the cost-to-serve

• Daily banking platform to cater to the needs of the majority of all customers
• Digital-only core model for daily banking customers

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Mobile will be the foundation for all customers going forward

Digital (mobile) platform for all interactions Self-served interaction models Personal assisted (some products and segments)

Mortgage journey Payments and accounts Investment products Regular auto portfolio review Robo advice & guidance Insurance Consumer Loans

Guided interactions

We will incentivize the right customer behaviour

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Conducting all banking activities digitally on mobile platforms

Behaviour Incentive

Acting prudent to achieve lower risk score and increasing total volume of business Collecting banking business with Nordea for improved service for the customer and more business for the bank Increasing savings to prepare for their future and give business and funding for the bank Ensuring customers are quickly and easily settled with everything they need, maximizing return on effort for the bank

Mobile life Financial health Full relationship banking Future savings Stable home

Track mobile behavior (e.g., digital sessions) and reward at milestones Reward high quality customers with better pricing Discounts on next product added for Affluents and Home owners Track recurring savings behavior and reward at milestones Proactive cross selling during home buying process focused on relevant products for home owners

Customers’ key needs addressed through four distinct offerings

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Offerings tailored and more flexible than in current logic

Everyday banking for all customers Homeowner Young Potential Affluent

Best in class homeowner journey Digital first home journey with possibly advisor support Next generation Affluents Digital first with support from specialized advisor team via remote High savings and investments focus Distinctive wealth management expertise, digital tools and products available across channels

• Digital availability of a full scale bank

We will invest and add features where it is important to customers

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Everyday Banking Homeowner Young potential Affluent

Mortgage products & advisory Less products & advisory Migrate to digital Savings / investment products & advisory

Reduce cost Add features

Aligning value to society with value to Nordea…

Quality customers

▪ Reduce risk of the customer relationship by

educating and supporting

▪ Helping customers live the life they can

afford Stable home

▪ Capture the homeowners which is a priority

segments due to low C/I

▪ Make it easy and safe to buy a home while

managing financial and non-financial risks

Value to Nordea

Mobile life

▪ Migrate customer interactions (service and

sales) to digital self-service

▪ Educate customers on the use of digital

Value to society

Future savings

▪ Higher savings per customers and more scale

from the investment offering

▪ Encourage savings, activate customers’ wealth

and help them grow

&

Full relationship banking

▪ Increase retention and build high share of

wallet

▪ Helping customers gain scale benefits from

their financial situation

Change will start in 2017

Existing and new development are managed as one program, currently under four themes

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Migrate to digital

Transformation delivered in one program with 4 themes Priorities for 2017 set to deliver change and impact early

Develop affluent offering Home buying journey Streamline lean back bone Migration of customers to new value proposition

1. 2. 3. 4. 5.

Launching phase Launch new value propositions Reprice and migrate customers from existing customer program to new customer groups Preparation phase Develop new fast approval process and risk based pricing for mortgage Develop new savings and wealth offering, including simplified products, simple robo-advise and upskilling advisors New PB – PeB collaboration model

Recap – our plan in nutshell

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Thank you!

Topi Manner, Head of Personal Banking topi.manner@nordea.com

12-12-2016