Thomas Perryman speaks to Norwegian banking innovator DNB’s head of CRM strategy and innovation Rune Foyn about how the bank’s social media drive has accelerated customer satisfaction and shareholder approval alike.
As anyone who has been to Oslo will attest, the economic indicators do not lie. Life in Norway is good. It has the highest standard of living in the world and the second-highest GDP per capita. It can also boast the second-highest proportion of internet users in the world, a highly educated workforce and an economic terrain that features telecoms just as fjords shape the geographic landscape.
It is no surprise then that the Norwegian banking sector is not a casual spectator in the digital banking revolution. DNB, Norway's largest financial services group and one of the Nordic region's largest in terms of market capitalisation, was one of the first banks in Norway to pilot mobile payments solutions. It is now making further strides to harness the digital revolution through an enhanced understanding of customer behaviour, coupled with more targeted and tailored customer services.
DNB's Facebook likes
Take its use of Mark Zuckerberg's college creation. DNB's Facebook page had attracted an impressive 145,179 'likes' at the time of writing, which equates to around one in every 19 Norwegian Facebook users. By comparison, one of the UK's top banks has over 15 million customers - three times that of the entire population of Norway - but has only 29,482 'likes'.
More importantly, unlike some banks, the mere existence of a Facebook page is not the start and end of DNB's social media strategy, as Rune Foyn, head of CRM strategy and innovation, explains.
"We have established a very good Facebook customer feedback service. We are always there for our customers," he says. "We have responded to 95% of all questions asked, which is by far the best of any bank in the world. And the service is 24/7."
This is in stark contrast to the nine-to-five equivalent of many banks, and the emphasis on a two-way approach to social media chimes with DNB's overarching customer philosophy.
"Very early on, we looked at our availability to the customer," says Foyn, a ten-year veteran of DNB's CRM team and an authority on everything from creative campaigning to analytics reporting. "One of the first things we did was to create round-the-clock opening hours for our customer service departments. We are very interested in collecting feedback from the customer."
While much of the analysis of this feedback is still manual, DNB will continue looking at investment in more sophisticated analytics tools in the future.
"The question is: as this channel increases in maturity, are we able to keep up with the customers? We have to think smartly about that," says Foyn.
Much benefit has already been derived from customer feedback.
"When it comes to feedback from customers, we do evaluations to check out our service-level using face-to-face interaction. So, when a meeting is held with a client, we email them to ask how the experience was. That feedback on service delivery is important to us."
Developing a truly meaningful dialogue with customers is at the heart of DNB's engagement strategy.
"We are trying to differentiate ourselves from other banks through our market communications," explains Foyn. "We are building a brand almost to one side of the banking sector. We are trying to instil some emotion, be it negative or positive - at the very least to stimulate the client - through our web advertising and our CRM activities, in order to be more on the customer's side."
The other key strand of DNB's social media strategy has been to use the second-most visited website on the internet.
"We are launching all our commercials on YouTube to help differentiate ourselves from the rest of the pack," Foyn says. And differentiate from the pack it has. Many of the videos, produced by Norwegian ad agency TRY, have attracted tens of thousands of viewings. One savings plan commercial in particular, the first in a series of four featuring Hollywood star George Clooney, has been viewed well over four million times and, in 2011, was the fourth-most viewed financial services advert in the world.
"Our reputation has been transformed," says Foyn. "We used to be viewed by many as very cold, very big, business-like and unfriendly. Over the last two years, our reputation has gone from rock-bottom to the best in our marketplace."
Yet, despite so much focus on social media, Foyn stresses that this reputational transformation has been every bit as much the product of a change in mindset.
"You can only do so much with technology," cautions Foyn. "The biggest change in our bank has been our CEO, Rune Bjerke, who has a totally different background from banking. He is very customer-orientated and his vision is to create value through the art of serving the customer. This is a bold statement, but through the years it has had an effect."
The last three years in particular have seen a dramatic increase in the number of personal one-to-one communications to customers, such as email marketing and online personalised content, from a million in 2009 to 14.2 million so far this year - driving sales in the process.
"It is a staggering number," says Foyn. "I am proud that we have been able to be customer-centric and, at the same time, create value for shareholders."
Functional services for all
The digital revolution nonetheless presents a paradox. What is simple to some can be stupefying to others, and Foyn recognises the respective needs and preferences of different customers. In this sense, DNB is facing a familiar conundrum: "How do we introduce all the great functional services that everyone should use in a way that they can see the value of it?
If customers are used to going to the branch, how can you make them try new technology so that they can see how easy it is? It would be dangerous to switch off our basic offer to clients who want to come and meet us."
This strikes at the heart of debates about the future of retail banking. Foyn sees economic circumstances and cost to be key drivers, but above all envisages a very flexible IT portfolio that can support different customer needs.
"You can have a very self-service orientated segment offer something that suits them, but you also need to be able to support a broader sector of customers to make it profitable. For now at least, my generation needs to have face-to-face meetings, but we can maybe do that online, via Skype for instance. But we also need to have skilled people helping those who are put off by that."
Fewer and fewer people, Foyn believes, will require traditional retail banking for opening an account or a mortgage, but there will still be a demand for face-to-face banking.
"You will find lots of situations," explains Foyn, "particularly in the SME market, where you need to address really complex pension plans and payment solutions and have a good dialogue."
Much will also depend on developments elsewhere. "If other industries, such as travel and entertainment, pick up on new ways to communicate to their customers, that will also drive the usage patterns for banks."
Foyn also believes that notwithstanding the opportunities that new technologies present, if banking moves from a relationship paradigm to a more functional one - with customers connecting more by using mobile apps - the danger is a repetition of the past. The wide-scale introduction of ATMs was a customer-friendly and cost-efficient service, but the customer-bank relationship changed. With less customer feedback and information at their disposal, banks were left with a more superficial understanding of what their customers were thinking.
"I think banks need to have a greater presence on other websites," says Foyn, drawing the comparison with retail, where it is best to have a shop where the traffic is. "You can do that in two ways: attract traffic or be out there where the traffic is. But the question is always, is this something the customer needs and wants?"
Any talk about customer relations invariably leads to discussions over safeguarding the privacy of data, but Norway has not seen the same data cleaning and data quality issues that other countries have experienced.
"There are strict laws governing what data we can use for what purpose, and we receive legal advice to ensure that everything is correct. We have been working with a centralised data warehouse for the last 13 years. There are different access layers and strict requirements with regard to analytics, marketing and PR campaigns alike."
In terms of the public opinion dimension to sharing data, Foyn stresses that customers feel more positive when they get something of value. The efficacy, and not just the legality, of what banks do is therefore critical. Customers want to receive "the right and relevant offer".
With 220 branches across Norway, it will be interesting to see how DNB and its vision of creating value through the art of serving the customer continues to evolve.
"Our customers now believe in us," says Foyn. "We need to show that we are what we say we are, and that's going to be an exciting journey.