Financial services are in transition, and the changes are pushing marketing to the fore.
Customers’ expectations of the sector are changing, driven by their online experiences across other industries. At the same time, banks are feeling the need to demonstrate their social credentials in the wake of the financial crisis of 2008 and the damage done to the image of banking itself.
According to Helena Andreas, group director of marketing & communications of Scandinavian banking group Nordea, the result is that marketing is becoming increasingly significant.
“How we talk about what we offer in an engaging way that people not only understand but deeply care about is definitely making marketing a lot more important,” she says.
The most obvious manifestation of this for Nordea is the bank’s new branding, launched last autumn. But, beyond it, is a growing emphasis on the customer. Andreas spoke to CMO.com recently, and the first thing we discussed was how her role had developed as the importance of the customer experience had been recognised.
Andreas: I joined Nordea almost three years ago when my role was created. We didn’t have anyone with group responsibility for all our communications, customer-related insights, and so on. We had a number of different departments, which were all doing a very good job, but also slightly different jobs because they were located in different departments and different countries.
Like many banks, we were historically quite strong in investor relations and traditional communication, but less strong in various types of marketing, branding, customer insights, and so on. When I joined, my focus was on running communications, but also on creating the right structures across the organisation to co-ordinate ourselves around those other areas. My role now covers our brands, our marketing—holistically—and our customer insights.
CMO.com: How is Nordea structured and how do you work with the different elements of the group?
Andreas: Since the bank’s creation in 2000, we’ve been on a journey towards becoming “One Nordea.” That has meant presenting one face to the market and one voice in our communications, but also aligning our products and services. We’ve shifted from four quite independently run countries to be primarily organised around four business areas: personal banking, commercial and business banking, wholesale banking, and wealth management.
I sit at a group level and cover all these business areas, and all the countries, continuously working on getting the right balance between what we do at a group level, what we do at a business area level, and what we do very locally at a country level.
CMO.com: How is your department structured? Do you have channel specialisms within it, or do you devolve channel specialism down to business area or local levels?
Andreas: It’s a little of both. Rather than channel specialists, I have content specialists, so I have someone who sets our strategies on sponsorships, for example, but then I have people locally and at a business area level who activate those sponsorships.
The thinking is that most of the things that we do centrally should be at a strategic framework level, developing the really big concepts and the things that we do together. Then we have people who work more closely with a business area, for example, in terms of managing customer events or direct marketing related to that business area.
Then I also have people in my team who sit very locally, for example managing social media for Norway, because that would involve local bloggers, local sense of humour, current events, and so on.
We’re constantly working on that balance because we’re going through a rapid transformation as a company and as an industry.
CMO.com: Where are you in that transformation?
Andreas: The whole financial industry is, obviously, in a massive transformation. That’s driven partly by regulation and partly by the increasing number of competitors and the enormous amount of innovation and creativity in the sector. But, above all, it’s driven by changing customer expectations and requirements.
Based on the experiences customers have everywhere in their daily lives—whether that’s interacting with a government agency, buying a mobile phone, or whatever—their expectations for how they do their banking, the transparency they want around it, and the speed at which they want results are changing very dramatically for the industry, and for us.
We are in the middle of this. What does this new customer experience environment really need, in terms of the products and services we provide, and how we provide them? What does new technology mean for where we want to direct our investments and how we want to work?
We also need to make sure we have all the appropriate regulation in place and that we act the way we’re supposed to, while, at the same time, keeping an eye open for the next big innovation. Who should we collaborate with? Which of the fintechs are competitors and which do we want to have a closer relationship with?
CMO.com: How is this affecting your thinking about marketing and the way marketing works with the rest of the organisation?
Andreas: It means marketing’s role is becoming more and more important. Historically, banks were unchanging. Everyone knew what a bank stood for, and, when you had a banking relationship, it was an enormous pain to change it, so you would just stay. You wouldn’t shop around.
Now that environment has changed dramatically. We not only need to look after our customers and give them good service, but we also continuously need to be top-of-mind, to make sure that other people don’t come in and become more top-of-mind and lure our customers away.
Also, there is a general development to take responsibility for the society we live in. Therefore, it’s becoming much more important for us to not only do the right thing, but to visibly do the right thing. All types of marketing communication and community engagement initiatives—which I’m also responsible for—play a very large part in that.
CMO.com: What does all this look like to customers?
Andreas: We’ve recently gone through a brand overhaul, that’s the most obvious thing. In terms of how we speak to customers, we’re moving away from the more conventional, formal tone and into a much warmer, more engaging way of communicating. We’re using different types of colours and imagery to try to communicate very clearly in a simple, customer-centric language, but also about topics that customers care about. That’s the how.
Then, on the other hand, there’s what we talk about. We talk much more now about the role we play in society and the benefit we bring, not only to the customers, but to the world at large. Historically, we did a lot of product-led communication; these are our mortgage rates, for example. Now we talk about the careful checks that we do when someone needs to be a customer, and why we are doing them.
We also want to make sure we talk about how important our customers are, regardless of the type of communication. We believe customers and customer satisfaction are the most important things, so we make sure we say that even if it’s a communication about our financial numbers.
CMO.com: Financial services companies seem to be much more concerned with customer satisfaction nowadays.
Andreas: Very much so. That also sits within my area of responsibility—making sure that we get our customer insights up to speed, that we keep in touch with our customers’ views. Also that we have the right ways of measuring customer satisfaction, and that we’re digging into what the numbers really mean. It’s on the agenda at all levels of senior management, and it’s very much included in people’s objectives.
CMO.com: A number of financial services companies I’ve spoken to have moved their business insight operations much closer to marketing to address these issues. Have you made similar organisational changes?
Andreas: We’ve moved insights a lot closer to marketing in that our overall measurement of customer satisfaction, the framework for how we work with customer satisfaction, the research budgets, and so on sit with my team. We also have an analytics team, people who are great at getting customer information out of our legacy IT systems. As in many banks, this is one of the challenges for us. We have enormous amounts of information about our customers, but, because of legacy IT and old data warehouse solutions, it’s actually quite cumbersome to get out. We’re making massive investments to replace a lot of our IT systems, so this should become much easier in the future.
CMO.com: What metrics do you use to measure customer satisfaction?
Andreas: We use three, primarily. We use customer satisfaction: “How satisfied are you?” We use the recommend measure: “Would you recommend Nordea?” And we ask: “How likely are you to remain a customer with Nordea?” We use a weighted score of these three questions, which we call the Customer Satisfaction Index. In some parts of the business, we’ve simplified this and use Net Promoter Score, which, obviously, just builds on the “Would you recommend?” question.
CMO.com: How do you drive this customer-centric agenda through a business? I’m guessing this is quite a new thing for Nordea.
Andreas: Very much so, as is working with customer journeys and so on, as opposed to working in isolated silos. Essentially, it’s about getting as much information as we can about our customers, about how they feel about us. Also it’s about giving positive examples where we have recognised either an opportunity or an issue, done something about it, and it has resulted in higher customer satisfaction and then higher profits, bigger sales, and so on in the longer term. It’s very much a large-scale influencing game in terms of getting as many good examples as possible, speaking to as many people as possible, and engaging them around it.
No one would argue that customer satisfaction isn’t important, but people are less certain about the best way to actively work with customer satisfaction. We’ve made great strides, but, as with many banks, we still have a long way to go.
CMO.com: Where are you in your use of data to understand customer journeys and deliver better customer experience? How do you see that developing?
Andreas: I’m expecting it to balloon. As quickly as our IT system lets us, we’ll be using more information to not only find out what customers want, but to identify who we might want to approach proactively. I have a background in marketing at Tesco and my ambition is that, at some point, Nordea will be as responsive as you can be in a retail environment, because, clearly, we have way more data about our customers. This is a huge area for us that will continue to grow in importance. In particular, as other competitors come along—fintech companies who are able to do this in an intelligent way—we should be leading the way, because it’s our data about our customers.