IT is set to play a pivotal role in Danske Bank’s strategy to be a forerunner in the digital transformation of banking. Its CIO Peter Schleidt explains how he has looked to align his IT unit more closely to the business, in order to understand technology trends and propose new opportunities for the bank.
How extensive are Danske Bank’s operations from an IT perspective: how many users are there across how many countries?
Danske Bank Group operates in 15 countries and offers a full range of banking services in the international financial markets. We employ approximately 20,000 people and we provide IT services to all staff. In addition, 2.2m of our customers across the group are active online. In Ireland, customers benefit from our leading technological solutions, such as our e-banking platform and our mobile banking services.
A question about Danske Bank’s Irish operation: To what extent does it have autonomy over IT decisions, or do you operate a centralised model where possible?
We operate a one bank, one IT platform solution. That means that we internally in the bank – including in the IT organisation – can leverage a number of benefits as we are part of an international banking group: for example, common IT solutions across business units and geographies. In order to secure that local differences are taken into account, our executive management in Copenhagen works closely together with local management on strategy and decision-making relating to Danske Bank’s activities in all markets, including Ireland.
Can you outline Danske Bank’s IT strategy: what objectives have you set for the next year and beyond?
In 2012, we launched an ambitious strategy to be among the banks with the best customer satisfaction and earning levels by 2015. As part of the strategy, it is our mission to “set new standards in financial services”.
IT is a pivotal part of the strategy, as Danske Bank wants to be a forerunner in the digital transformation of banking in the coming years. At the same time, it is a key objective for IT to continue to become even more cost efficient and agile to be able to deliver more values to the customers for fewer costs.
How important is information technology seen as shaping and enabling Danske Bank’s overall business direction?
Danske Bank is a specialised bank in Ireland, focusing on our corporate and private clients while at the same time offering a competitive and efficient digital and telephone service to our personal customers.
As the leading bank for technology innovation in Ireland, our customers benefit from the most advanced banking technology in Ireland allowing them to optimise their cash flows while minimising their costs. Operating on Danske Bank Group’s integrated cross-border IT platform means corporate and business clients also have access to a business e-banking system with one point of entry throughout Northern Europe.
As is the case with many other industries, delivering a strong service offering does not always mean having a large bricks-and-mortar network. We continue to use innovative mechanisms to provide enhanced banking services at the lowest possible cost in order to keep creating value for both customers and the bank. IT plays a central part in this. Our online customer meetings is a good example of this development.
Is the CIO role a board-level position?
The responsibility of IT in Danske Bank is held by one organisation, Group IT, across the entire group. This organisation reports to Eivind Kolding, CEO of Danske Bank.
To what extent does your role involve closely understanding technology, and how much is given over to meeting with the business and interpreting its needs for the bank’s IT team?
My role includes both the responsibility for technology and systems, as well as product- and process-development activities, in close co-operation with the business units across Danske Bank.
Is part of your role to understand technology trends and identify opportunities for new products and services that the bank can offer to customers?
Certainly. IT has the responsibility to understand technology trends and propose new business opportunities for the business units. Our current Mobile Bank was an example driven forward by IT, but often new ideas emerge in collaboration between business units and IT.
Do you think innovative technology is a competitive differentiator for a bank, or is it an element that everyone has to invest in to keep up with consumer trends (such as online access and smartphones)?
The global financial market has changed and the Irish banking market has changed even more. The way ordinary people conduct their banking activity is also changing fast and we see how customers in Ireland, to a large extent, use online and remote options instead of traditional bank branches. Our own customers now use mobile banking products more than they use all other channels, with our e-banking service at a close second.
I am sure technology and IT solutions are central when customers choose a bank. Our customers benefit from a full range of services which allow them to manage their banking needs on their own terms. They are able to do their banking, when and how they want to do it. Technology and IT also enable us to provide our customers with a proactive advisory service which will make them even more financially confident.
Can you give some examples of where Danske Bank is using technology differently in order to stand out from competitors?
We launched the first mobile banking smartphone app for business customers in the Irish market in April this year, followed by the first Business Banking iPad app in June. Ireland’s first online meetings for banking customers were made available to Irish customers in early summer. These launches showed our commitment to deliver the most innovative technology and the best solutions for our customers. It also showed that we work to maintain our strong customer relationships and solidifies our position as the leading technology bank in Ireland.
How much oversight does the CIO have in developing apps like these?
I follow the development quite closely, and I am always piloting all new services, like apps.
Many organisations spend much more on maintaining their IT infrastructure – ‘keeping the lights on’ – than they do on innovation and strategic projects. What is the ratio at Danske Bank and do you think this will change over time?
According to a McKinsey benchmark between European Banks, we spend significantly less on maintaining our IT systems while spending relatively more on changing the bank through innovative and strategic projects. I am convinced that a central part of the explanation of this ratio is due to our common IT platform, which can reuse the same systems across our different business units and geographies.
What is your view of trends like cloud computing, big data and BYOD: just industry hype, or have they a role to play in the bank’s IT?
I am sure that cloud computing will have a major impact going forward. We are currently in the process of migrating all employees across the group to Office 365, which is a cloud solution from Microsoft. I am also confident that other trends like big data will have a major impact on banking in the years to come.
What would you say has been the biggest challenge since you took on the CIO role?
One of the most important areas I have worked on as CIO has been my continuous effort to drive the IT organisation towards becoming even more closely aligned with business units, as well as [becoming] customer- and business-oriented. This is important, as close collaboration between business units and IT is pivotal when we are to make new innovative IT solutions for our customers.