Staying relevant - so our customers stay relevant
Rising costs, increased regulation, decreasing margins, rising customer expectations – the list of challenges facing the Danish financial sector is long and ever-expanding. In this article, we take a look at key trends impacting Danish financial institutions, and how we can work together to address them.
Coping with the cost of complianceIn the autumn of 2019, VP Securities initiated a series of market consultations to identify the key challenges our customers are facing, and to find out how we can help them meet those challenges. Their answers coincided with many of the trends we have observed: increasing compliance costs, decreasing profit margins and a need for greater operational efficiency. As one stated, “One of our key challenges is increasing costs connected with meeting new regulatory requirements.”
Traditional models are being challengedOrganisational structures have changed as well, which impact the way we work with our customers. “In the past, our customers knew and understood our systems almost as well as we did,” explains Morten Kierkegaard. “Now, due to changing structures at some of our customers, our daily customer contacts are often located places outside Denmark, far from VP and the Danish market. That changes the nature of our relationship with our customers to a more advising and guiding role, to ensure we can continue to be a relevant option for them.”
Financial institutions also have to adapt to changing customer expectations. “Today’s customers, both retail and professional, expect different things from their financial institutions than they did just a few years ago,” Morten Kierkegaard observes. “To stay relevant, financial institutions have to adapt quickly. Nothing is sacred; everything is up for discussion and re-evaluation.”
The EU and market harmonisationFinancial institutions active in the Nordic region also have to adapt their internal processes to the European market infrastructure, as harmonisation is needed to secure an attractive Nordic financial market. However, this can actually be an opportunity. “We see the harmonisation of the European market as a positive development that can help our customers improve operational efficiency,” comments Morten Kierkegaard. “Harmonisation gives them the opportunity to save time and use fewer resources, which will make them more competitive. And that’s where VP also plays a central role in helping our customers bring their processes in line with EU standards and regulations”.
Changing times, changing expectationsThe combination of these trends means that we will change, and our customers will have to change as well. “There’s no doubt that the number one customer expectation is always going to be that our platform is 100% stable. Yet, their expectations go beyond system performance,” Morten Kierkegaard explains.
“When we interviewed our customers last autumn, they were unanimous in their desire for us to be more proactive. They want us to take on an even more advisory role; one that actively seeks out shared solutions to the challenges they are facing. They want us to challenge their way of working and their processes, based on our expertise,” Morten Kierkegaard says. “They tell us, ‘If you see an area where we can work smarter and more effectively, let us know.’ So, we have a responsibility to respond to these expectations.”
Listening to the voice of the customerIn response to the aforementioned trends and customer expectations, VP are evolving the way we approach Customer Experience. “Clearly, we have always worked with customer experience,” Morten Kierkegaard states. “However, our new strategic direction gives us the opportunity to work with Customer Experience in a more holistic, deliberate manner. It’s not something that resides in one department, or is an individual employee’s responsibility. It is the foundation for everything we do.”
In September 2019, VP established a new Customer Experience team, headed up by Amra Kovacevic. The team’s role is to help VP take an even more structured approach to working with customer experience. “We’re working with a short- and long-term plan. Short-term, we have chosen a number of ‘quick-wins’ that we will prioritise, areas that we can quickly improve in order to help our customers work more efficiently, typically involving system areas affected by the T2S implementation,” comments Amra Kovacevic.
“Long-term, we will work even more closely with our customers on the actual prioritisation of the initiatives we are working on, so we can prioritise activities that generate the most value for our customers,” Amra Kovacevic states.
Another one of the team’s goals is to help VP employees come closer to the customer. “We want to get employees from different levels and areas of the organisation to attend more customer meetings, so we can see how our work impacts our customers in the real world. This is just one of the ways that we can ensure that Customer Experience permeates everything we do.”