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The financial sector

Being serious about digitalization not only frees up internal resources – it increases your customer value

With Ole Søholm Jensen, CIO, Spar Nord.
The Danish bank Spar Nord is reaping the benefits of digitalizing processes and has slashed the processing time for customer cases from 14 days to a matter of minutes. But the journey has just begun and ahead lies several challenges, both internal and customer-related. And they need to be addressed with digital means to achieve the bank’s full, digital potential, says CIO Ole Søholm Jensen.

Digital transformation is not only a question of utilizing the newest digital trends and tools. To the Danish bank Spar Nord – it’s a matter of breaking the chains of legacy: The historic legacy of being a nearly 200-year old financial institution in the northern part of Denmark as well as the digital legacy that comes with being a part of a multitenant setup together with other banks in joint data centers.

Digitalization – a shortcut to customer convenience
During the past 5-8 years, Spar Nord’s CIO, Ole Søholm Jensen, and his colleagues have worked tirelessly to push Spar Nord in a more digital direction. To the customers this has had several benefits – for example cutting the number of required face-to-face meetings in half and reducing the average process time for customer inquiries significantly.

"The effort to reduce time consumption when handling customer cases began about 5 years ago. Since then we have reduced the number of necessary customer meetings where the customer must physically appear at the bank – by 50 percent. Furthermore, we’ve managed to reduce the processing time for customer cases from an average of 14 days to just 8 minutes through automation. In short terms, digitalizing our business processes directly influences the customers’ experience with the bank," Ole Søholm Jensen notes.

External partnerships as part of the internal business development
"Spar Nord’s focus on streamlining processes through digital means has resulted in the bank being one of the forerunners in the Danish digitalization race amongst banks", says Ole Søholm Jensen. "But it is not a solo-achievement," he stresses.

"We were the first to set up a partnership with a fintech company through a standard API. The project is a tool from the fintech company Subaio, that lets customers manage their subscriptions from streaming-services, fitness chains etc. In reality, the customer has an agreement with Subaio, but we deliver the data that underpins their service, and because it is a white label solution it all fits nicely into our existing services. This was the first of many initiatives. At moment, we have 3 fintech companies running different solutions in relation to us," he explains.

Having fintech partners placed in-house allows Spar Nord to draw on the start-ups’ innovative approaches to problem solving while, some of the way at least, negating the need for the bank itself to come up with the next 'big' solution.

Overcoming the legacy
But while drawing in innovative mindsets in the form of fintech companies lets Spar Nord take advantage of new ideas, it simultaneously presses on another issue that the bank needs to manage in its day to day-business.

Like most other Danish banks, Spar Nord is affiliated with one of three major IT service partners, in Spar Nord’s case BEC, which delivers both data center services as well as IT solutions to different banks.

The service partners are in a difficult position, as they need to address several banks within the same solutions. This can have the unintended side effect that banks like Spar Nord, who are trying to push forward, sometimes hit a technological wall in their efforts to make use of new technologies. The problem arises from the lack of integration.

"When focusing on our own projects we operate with a very high success rate. When it comes to the IT service partners, the setup – with several banks in a multitenant setup – is a bit more complicated. There are efforts in motion and they are making good headway in terms of a well-functioning integration system, but for now it takes a lot of work getting API’s working with the old legacy systems," Ole Søholm Jensen states and underlines the need for quicker and more efficient integration.

"To Spar Nord, the next big step in 2019 will be securing a well-oiled and well-functioning integration platform. We have an urging need to be able to integrate downwards into the existing legacy systems, but also outwards in regard to external partners such as the fintechs we have working with us. In the end it makes more sense to secure fast integration of existing solutions for automated workflows, robotics and data instead of trying to build everything yourself in-house."

Data in the vault
"While taking in fintech companies and working on securing an able platform for integration is top of mind," Ole Søholm Jensen emphasizes that none of these efforts are possible without the proper data.

"Data is the gold of our time – it’s what we need to have in the bank vault. But it comes with significant demands regarding quality and governance. When trying to utilize technologies such as automation and robotics, large amounts of stringent and correctly formatted data is a must have. Previously, the data format and the way in which it was registered was less important – as long as you had it stored somehow," Ole Søholm Jensen says and elaborates:

"Especially in Spar Nord’s instance, because we’re about to be appointed a SIFI-bank, which are banks essential to the national economy. If we are to succeed in our efforts, we need to put a framework in place that streamlines the data registration and storage efforts across the bank’s different departments and 1,600 employees," he states.

Ole Søholm Jensen’s top tips for CIO’s taking their digital transformation to the next step

Focus on creating a functional integration platform for your API’s, new solutions and legacy systems – don’t wait for others to address your needs.

Data isn’t just data. Have a framework in place that ensures that the quality of your data is raised to a satisfactory level. Incomplete or inconsistent data has no value when making a shift towards automation.

Digital facts about Spar Nord

  • Spar Nord operates with a specific modus operandi when initiating new ideas for solutions or systems. In-house, the method goes by the name “F.U.A.D.S.”, which translates to Business, Development, Architecture, Operations and Security
  • To begin with, new projects are evaluated in terms of the business demands they must meet
  • Then the team looks at the project from an architectural and developmental point of view – I.e. is there an existing solution or framework which could be used or if Spar Nord needs to create something from scratch.
  • Operations assesses, which platform (ex. Cloud) will support the new solution.
  • Finally, security chimes in with an evaluation of the proposed project or solution.
  • According to Ole Søholm Jensen, the next step is adding DevOps and SecOps into the FUADS-equation.