Knowing what people need is not a matter of intuition. It is about personal meetings and about science, measurements, analyses and customer journeys.
It is about understanding customer needs, but also about respecting that we need not know everything. DNB is handling this balancing act with a clear goal in mind: Offering the best customer experiences.
Personalisation and relevance will be important parameters for DNB to earn its customer relationships. The ability to capitalise on data to deliver insight and personalisation is essential if the Group is to be considered relevant for its customers, and DNB will therefore deliver a personalised customer experience in all channels and meetings with its customers.
Customer insight also plays a key role in driving top-line growth, and will be a central tool in the automation of, among other things, credit processes in all segments. To realise its ambitions in this area, DNB will seek to scale up and industrialise the use of data. This means further developing the Group’s processes, organisation, expertise and IT infrastructure.
It is essential for the Group to keep in mind that it is the customers who own the data, and that data must always be used in accordance with the customers’ consents and expectations.
Ensure good customer experiences
Delivering good customer experiences is a prerequisite for DNB’s existence. In order to help customers stay ahead, DNB must also understand their needs. This means, among other things, offering simple and relevant solutions, being available and delivering transparent and competitive terms and good customer service. By building trust and offering good customer experiences, DNB will earn the customer relationship.
POLICY AND APPROACH
The individual business areas are responsible for ensuring good customer experiences in their own units. The Marketing & Branding division is responsible for brand experience at group level and supports the work of the business areas. The group standard for products and services applies to all products and services offered by DNB. The purpose of this group standard is to ensure high quality in DNB’s portfolio of products and services, and thereby increase the Group’s competitiveness, improve its reputation and safeguard its corporate social responsibility. The standard and procedures for compliance shall support effective product development and approval, and contribute to innovation and change capacity.
The key parameter for measuring customer experience is the customer satisfaction index, CSI. In addition, DNB uses reputation surveys, which give an indication of the population’s perception of DNB as a company and a brand. The results of these surveys are used in combination with other measurements, such as immediate customer follow-up after the use of services and evaluations of campaigns and events. In-depth analyses of customer segments and product areas are also important to understand underlying customer needs and value drivers. Insight from such activities is essential for deciding which measures to prioritise and how to develop DNB further. The customer satisfaction index and the results of the reputation surveys are published in the Group’s quarterly reports.
EVALUATION OF RESULTS IN 2017
The target for the reputation score in 2017 was 70 points, while it was 75 points for the customer satisfaction index. The reputation surveys showed a slightly positive trend in 2017. The reputation score was 64.0 points at year-end 2016 and 66.3 points in the fourth quarter of 2017. The reputation score of a company is composed of seven dimensions covering various aspects of the business, which together define the company’s reputation. DNB has a higher score than its competitors when it comes to ‘innovation’, but a somewhat lower score on the other dimensions. A negative trend is particularly evident within ethics and corporate responsibility. The respondents are attaching ever greater importance to the ethical dimension. This means that DNB’s weak score in this dimension has an increasing effect on the Group’s overall reputation. Incorporating corporate responsibility as a key element in the new strategy is therefore an important strategic measure.
Customer satisfaction among personal customers was 67.3 points at year-end 2016, whereas it was 70.4 points in the fourth quarter of 2017. Despite the positive increase, the score is still not within the target of 75 points. Personal customers report that excellent customer service and high-quality online banking solutions are the best aspects of DNB. Today, online banking is at the core of the customer relationship. Positive experiences with the bank are founded on simple and fast solutions, favourable terms, sound advice and good customer service in dialogue with the bank. This may be an indication that the negative effect of the closure of a number of branch offices 2016, abated in 2017.The reputation and customer satisfaction scores apply to the Norwegian market and Norwegian customers.
To get a large influx of ideas, DNB also needs other impulses from its surroundings.
During 2017, DNB partnered with start-up companies representing new disciplines, invited committed students to challenge traditional mindsets and arranged a “Hackathon” to explore the possibilities inherent in the innovative and prudent use of customer data.
DNB established a unit for the use and development of robot technology in 2017, in which five employees and ten robots work with 16 different processes. This aim of this division is to automate processes throughout the DNB Group using Robotic Process Automation, RPA. Virtual robots are software installed on designated computers that are given separate identities (employee numbers) and tasks just like a human employee in an existing IT unit. This means, among other things, that customer requests are processed even faster, and that the risk of manual errors is significantly reduced.
In 2017, DNB prioritised the use of agile and customer-oriented working methods, so that products and services to an even greater extent are developed based on customer needs. Various customer-oriented activities have been carried out in the different business areas.
The personal customer segment has started using a new working method called Design Thinking, in which the fundamental idea is that all innovation must be centred on the customer. Through this methodology the bank becomes even more conscious of using customer insight in development and decision-making processes. An example of an initiative that is based on targeted work with customer insight, is a physical service concept for non-digital customers. Read more about this initiative in the section on financial literacy.
One of DNB’s key roles in this segment is to connect ideas with capital. Throughout the year, the bank therefore strengthened its focus on startups through initiatives such as:
- DNB NXT Accelerator – a programme for selected start-up companies
- Startskudd.no – DNB’s crowdfunding platform
- NXT Community – NXT events across the country and NXT Matcher. DNB facilitated more than 1 500 meetings between start-up companies and potential investors in the course of 2017, both physically and through digital platforms.
Large Corporates and International
To ensure better customer experiences and improved services for corporate customers operating in ocean industries (seafood, offshore and shipping), Large Corporates and International (LCI) established the Ocean division in 2017.
DNB has resolved many challenging situations for customers in the offshore industry who have been through a recession, partly by restructuring their debt. The objective is to balance three aspects, taking into consideration the bank’s investors, the bank’s customers and the industry as such.
DNB has raised capital in new ways (“originate and distribute”), for instance by helping more real estate customers transfer from the banking market to the bond market. Traditional loan capital has become a scarce resource, and DNB is therefore finding new solutions for its customers.
Another area that experienced growth in 2017, is the market for green bonds. For LCI, this means that new possibilities are opening up for Norwegian and Nordic businesses that need loans to finance climate-friendly projects. This is an area in which both LCI and Markets see great opportunities for growth.
Markets uses customer satisfaction surveys and customer data to further develop products and services, and provide customers with more tailored solutions. This is especially true for customers using the equity trading solutions. The bank will continue to further increase resources in this area, using customer insight to identify new customers and opportunities, and offer relevant products and services. In the battle for the customers’ attention, it is especially important to give them relevant information. Markets has therefore increased the number of activities in social media and through this strengthened its role as a market and product expert in various currency and capital markets.
THE WAY FORWARD
Good customer experiences are reflected in more than a positive development in reputation and customer satisfaction scores, but these factors still give a fair indication. In connection with the new strategy that was launched in the autumn of 2017, new KPIs are to be defined within the four strategic priorities. Combined, these KPIs will indicate how well DNB is doing when it comes to delivering the best customer experiences. In future, it will also be particularly important to be curious about new technologies and sources of information to create even better customer experiences in all customer segments, both for those who need close personal follow-up, and for those who prefer self-service solutions. At the same time, DNB must always act responsibly and in accordance with regulations and the customers’ expectations to the processing of data and privacy protection.
Provide ethical products and services
DNB has a responsibility to help ensure that the banking industry delivers ethical products and services and has to make conscious choices related to what should be offered, how this is delivered and to whom. The choices DNB makes affect individuals, society, companies, industries and financial stability in Norway, and will in turn affect the confidence the surrounding world has in DNB. DNB’s existence is dependent on trust from all of its stakeholders. Trust is earned or damaged when DNB delivers products and services that surpass, or deviate from, what is expected.
POLICY AND APPROACH
DNB’s governing principles for corporate responsibility are normative for all product and service development. The governing principles for ethics, the Code of Conduct, shall contribute to increasing awareness of and compliance with the high ethical standards which DNB employees are required to observe. A fundamental principle is open, clear and truthful communication which safeguards customer interests in connection with sales and advisory services. Both the principles for corporate responsibility and the Code of Conduct have been approved by DNB’s Board of Directors. Read more about this in the chapter on corporate governance.
The group standard for the approval of products and services is part of the risk management framework and aims to ensure that DNB’s portfolio of products and services is of high quality, and thereby boost the Group’s competitiveness and customer satisfaction scores, improve its reputation and safeguard its corporate responsibility. The group standard and procedures for compliance shall support effective product development and approval, and contribute to innovation and change capacity.
In addition to DNB’s governance documents, Norwegian laws and regulations, as well as stakeholder expectations, must be taken into account.
The Norwegian Financial Services Complaints Board handles disputes concerning private individuals’ contractual relationship with banks, finance companies, mortgage institutions or mutual fund management companies. The number of cases in favour or disfavour of DNB will give an indication of DNB’s ability to meet customer expectations when it comes to ethical products and services. The annual report of the Complaints Board will not be ready until the spring of 2018, and the figures presented below are therefore from 2016.
Did you know that DNB Eiendom sold residential properties for a total value of NOK 75.9 billion in 2017?
EVALUATION OF RESULTS IN 2017
The number of cases in the Complaints Board is an indication of DNB’s ability to deliver products and services that meet customer expectations. In 2016, the Complaints Board registered 1 257 new cases related to banking and insurance, and DNB was involved in 309 of these. The Board considered 32 cases from DNB, 23 of which went in favour of DNB and nine in favour of the customer. The number of cases in the Complaints Board is as expected, in light of the number of personal customers in DNB, and in comparison with previous years and with other financial services groups. The results of the cases are also as expected and show that DNB has few cases which end in disfavour of the bank. This is considered a positive outcome.
On 1 April 2017, a new group standard and procedures for the approval of products and services came into force. The group standard applies to all products and services offered by DNB, and includes changes in and the phasing out of products and services. The new standard was implemented as compliance with the existing standards and policies in this field has not been good enough. The group standard clarifies and formalises responsibilities and risk ownership through the value chain and makes it clear that the final decision to establish, change or phase out a product or service shall be made by the group executive vice president who is responsible for the segment to which it is offered.
The group standard requires that each customer segment maintains a complete product catalogue of its products and services. In the product catalogue, each product or service shall be accompanied by a product/service sheet that forms the basis for decision-making. The product/service sheet shall include risk assessments that comprise the entire value chain within the main categories compliance, operational risk, corporate responsibility and reputation, credit risk and insurance/market/liquidity risk. All assessments and decisions shall be verifiable and well documented.
DNB focused on product sheets for new products and services in 2017 and will have a risk-based approach to all existing products and services in 2018. By the end of 2018, all new and existing products and services shall comply with the group standard, and thus have their own approved product/ service sheet.
In 2017, new ethical principles were prepared in the form of a Code of Conduct. The new Code of Conduct is more comprehensive than the former code of ethics and describes how DNB shall be perceived as a company, and how employees shall act in a business context and as individuals. Ethics and corporate responsibility have also become a part of the group-wide governance principles for all of DNB’s operations. DNB received no fines related to marketing or product and service labelling in 2017.
Since 1 April 2017, all new products in have been tested by carrying out Shelf Control, and during the course of 2018, the customer segments will check all products – both new and existing – to test whether they really do help customers stay ahead.
Large Corporates and International
In the field of shipping, DNB has joined the Responsible Ship Recycling Standards initiative, RSRS, along with several other banks. RSRS sets requirements for shipping companies that are financed by banks on how to scrap ships in a responsible manner.
In addition, the Group finances renewable energy with about NOK 40 billion.
DNB Markets plays a key role in the social debate through macro analysts and other experts, and the bank’s seminars and conferences are relevant to the market, providing good meeting places and knowledge venues for the business community. Markets delivers in-depth analyses of companies, industries and countries, which form the basis for its customers’ investments and decisions. In addition, competitive savings and investment products are developed for various customer segments.
There is an increasing focus on the development of sustainable and responsible investment products in DNB. This includes “green bonds”, where the issuers are required to ensure that the funds in a “green” bond issue are earmarked for climate-friendly activities. Markets will continue to offer trading in various carbon credits and certificates.
THE WAY FORWARD
The new group standard for the approval of products and services will be implemented in 2018 and will:
- include a wide range of assessment and decision points for the approval, but also for the ongoing monitoring of products and services (including corporate responsibility, ethics and reputation, etc.)
- ensure that the assessments of products and services always take into account the customer segment to which they are offered
- support development processes with swift time-to-market and rapid changes in products and services after the launch
- clearly place the responsibility for products and services offered to the various customer segments
By the end of 2018, all DNB products and services shall have a clear follow-up plan which ensures that they will be evaluated. Moreover, the product approval process shall be part of a new IT system that will facilitate a more efficient, systematic and documented approval process.
In order to succeed in the future, it is important to monitor the implementation of the new procedures for the approval and follow-up of products and services. In addition, competence enhancement must continuously be on the agenda. Ever-new combinations of technology and financial services are challenging the established norms related to responsible products and services, for example privacy protection, information security and availability. In line with the new strategy, suitable KPIs shall also be established within this area.
The Norwegian Consumer Council has instituted legal proceedings against DNB Asset Management AS for the management of the DNB Norge funds. They claim that the funds have been managed according to a passive investment strategy, tracking the stock exchange index, while being priced as active funds. The case was tried in the Oslo District Court in November. The court delivered its judgment at the beginning of 2018, and DNB was acquitted on all counts. The Consumer Council has announced that it will appeal the case to the Court of Appeal.
Read more about responsible products and services in the section on risks and opportunities in a long-term perspective.
Mutual funds with a distinct sustainability profile
An increasing number of customers, both institutional and personal, show an interest in investing in products with a distinct sustainability profile. All of DNB’s mutual funds are assessed based on ESG criteria (environmental, social and governance) to meet the expectations of the customers. At the same time, the bank also offers special products with a particular focus on sustainability.
Ole Jakob Wold, responsible for the management of DNB Global Lavkarbon.
In 2017, DNB expanded its offering of sustainable mutual funds with a low carbon factor fund called DNB Global Lavkarbon. The fund is managed by Ole Jacob Wold in DNB Asset Management.
“For the first time, I have been allowed to create a product in direct response to customer demand. It is very satisfying. A large bank such as DNB has extensive contact with its customers, and this is something the market wants. Sustainability is important to people, and this is reflected both in politics and in the business community,” says Wold. One of the criteria for the portfolio is that the fund as a whole shall have less than half of the average emissions of all the companies in the world index (MSCI). So it is not carbon-free, but has as little exposure as possible to companies with operating models based on fossil fuels.
“The definition of fossil-free varies. We have chosen to call the fund ‘low carbon’ to indicate that it is also important to us that the companies in the portfolio have low CO2 emissions. However, there will be some emission of CO2 associated with all production processes.”
The fund is one of three DNB funds with a distinct sustainability profile and is available in the share savings account and in the fund list on dnb.no. In addition to DNB Global Lavkarbon, it is possible to save sustainably in the mutual funds DNB Grønt Norden and DNB Miljøinvest.
DNB Miljøinvest is a global thematic fund that invests in companies applying new technology to generate and use cleaner energy, increase efficiency and promote the growth of renewable energy. DNB Grønt Norden is a broad-based Nordic mutual fund which excludes fossil energy and invests in companies that contribute to solving environmental problems.
Data and customer insight
More data was generated in 2017 alone than in the previous 5 000 years of humanity
Digital adoption and technical innovation is driving an explosive growth of data – creating new challenges, and opportunities, in deriving commercial insight from large volumes of structured, unstructured and fast-moving data.
So what does the future hold? The advent of the on-demand, frictionless mobile economy has dramatically reshaped customers’ expectations of digital service excellence.
DIGITAL IS NOT MERELY A ‘THING’ — IT IS A NEW WAY OF ‘DOING THINGS’
DNB has recognised the need to develop a digital strategy that integrates digital concepts into all aspects of doing business: from channels, processes and data into the operating model and culture of the organisation.
This is reflected in DNB’s recently launched new strategy to create a focus on digital customer insight. The customer insight initiatives will seek to enhance customer interactions through advanced data-driven analytics to deliver value to the consumer – the right offer through the right channel, at the right price, at the right time.
The bank has recently appointed a chief data officer, CDO, to assist in defining measures to support this strategic priority. The CDO mandate includes exploiting advances in predictive analytics, cognitive analytics and machine learning capabilities to understand customer needs and deliver highly-tailored customer value.
The bank’s business areas are well aware of the opportunities to leverage data and are already exploring solutions that will unlock the potential of existing data. Exciting opportunities are opening up to capitalise on these first steps and establish robust foundations for a leading edge data-centric bank of tomorrow.
The CDO function will design and deploy the enabling technologies, processes and organisational frameworks to underpin the next generation, data driven, digital consumer experience platforms (Grow the Bank) while also addressing important regulatory reporting needs (Protect the Bank).
> 90% – of the data in the history of the world was created in the last two years.
40% – projected growth in data volumes per year.
30% – of managers do not trust data used to make decisions.
1% – of the data today is analysed by organisations.
Source: IBM survey
Q&A with CDO Aidan Millar
↑ DNB made history by employing its own chief data officer for the very first time. Aidan Millar will be in charge of the efforts to create value from the Group’s data.
Why is data so important?
Digital adoption is driving explosive growth in data. The digital exhaust of customer data generated (chat logs, voice, transactions) is vitally important to enable the bank to connect with customers at a personalised level through real time data-driven insights.
How can DNB leverage data to deliver value to its customers?
By simply ‘listening’ and ‘deriving insight’ from the data, the bank can optimise and deliver a more relevant interaction with the customer – delivering the right offer, through the right channel, at the right price, at the right time. This is customer value.
How do you see data being able to support regulatory demands?
Regulations should not be perceived as a burden, they can easily be reframed as enforcing good practices. The General Data Protection Regulation, GDPR, and the Basel Committee standard number 239, BCBS239, are good examples. GDPR is about understanding the data we hold and how it is used – and ensuring it is adequately protected. As custodians of our customer’s data we should do this anyway. BCBS239 is in addition encouraging the deployment of systematic solutions to better monitor data lineage and data quality for critical risk analysis and reporting – an important priority for any bank.