Swedish Banking

An intensified focus on advisory services, further process efficiencies and improvements to customer offerings in selected product areas were the main priorities in 2008. Swedbank defended its strong position in the private market in Sweden while strengthening its position among corporate customers.

Swedish Banking is Swedbank’s largest operating area, serving 4.1 million private customers and 404 000 corporate customers and organizations . Swedbank is the market leader in a number of segments, including mortgage loans, household deposits and mutual funds. Swedish Banking’s own retail network comprises 419 branches. Through co-operation agreements with the savings banks and partly owned banks, customers have access to the bank’s services through an additional 261 branches. The retail network is complemented by 166 in-store banking outlets and cash services at around 1 400 ICA grocery stores throughout Sweden. Services are also available through the Internet Bank and the Telephone Bank.

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  • Intensified customer dialogue and advice

  • Growth in selected product areas

  • Further development of sales channels

  • Process efficiencies that reduce costs and highlight customer offerings

Intensified customer dialogue

Due to the economic slowdown and uncertainty in the financial markets, proactive advisory services were intensified in 2008. The dialogue with private and corporate customers focused on how they were affected by the economic slowdown and how Swedbank’s solutions could add value and offer greater security. The fact that Swedbank gained market share in mutual fund contributions last autumn in an otherwise slowing market can largely be attributed to the expansion of the advisory process throughout the year.

The mortgage lending market tailed off during the second half of 2008. This was another area where the emphasis was on customer contacts and advice. The concerns that many people are feeling have shifted the dialogue more toward solvency and risk monitoring. The local branches are close to customers, and Swedbank’s advisors actively contact them when their conditions change.

Although our advisory tools were better utilized during the year, there is still considerable room to further improve the use of these systems, particularly in endowment insurance. In consultations with consumers, three tools are primarily used: a comprehensive advisory system used by the bank’s advisors during extended meetings with customers; “Simple Choice,” a simplified, web-based tool that customers can use themselves; and the “Investment Guide.” Swedbank Investment Center provides local branches with structured support in the advisory process in consultation with specialists from Swedbank Robur and Swedbank Markets.

Growth in selected areas

A number of areas have been identified in both the corporate and private segments that offer attractive future growth potential. In private services, several product areas are relatively non-cyclical, such as property insurance, pension solutions and card products. Private banking and investment services are more sensitive to the business cycle, but are also a priority area for future growth. The Premium concept, which was successfully tested in 2008, is a typical new service concept in this area. Designed for consumers who want more active advice and a more proactive bank, Premium offers customers the opportunity to customize a package of products and specify in detail the level of service they want from their advisor. Moreover, the range of structured products has been expanded outside traditional index-linked bonds.

In property insurance, Swedbank has co-operated since 2007 with the insurance company Tre Kronor. Property insurance is an important part of a full-service offering that includes residential mortgages and auto and boat financing. This business has been limited in scale to date, but the reception from customers has been good and the potential for future growth is considered great.

A number of activities were carried out during the year in the life insurance and pension areas. The “Pension Check-up,” an advisory service for private consumers, was introduced in 2008 and has generated great interest. Discretionary management of PPM funds was successfully launched in spring 2008. Many people have a complex, random selection of pension solutions from multiple employers. This has created strong demand for advice on maximizing withdrawals, given the tax implications and other important factors. Swedbank’s integrated pension package for customers aged 55 and upwards has been enhanced to meet this demand. The focus on life insurance and pension products will continue in 2009, including through a new investment product and marketing activities in the occupational pension area.

Cards are also a priority growth area. Swedbank already has a strong position here through EnterCard, a collaboration with Barclays Bank of the UK. Increased card usage is important to efforts to reduce cash in society, which lowers costs and improves security. Several initiatives were taken in 2008 to encourage card purchases, including a new retail pricing structure for small purchases. The number of card purchases rose year-on-year by 14 percent in 2008 (17), while the number of card transactions cleared increased by 17 percent (19) during the same period.

In the corporate segment, Swedbank’s goal of service leadership entails a shift towards more of a business advisory role with a comprehensive range of services, including everything from cash management to life insurance and pension solutions. An important part of this work in 2008 was to expand the offering in cash management services. For example, a number of services have been launched to facilitate cross-border payments. Co-
operation with a European bank was initiated as well, to improve service for corporate customers in central Europe. Moreover, two online corporate services were consolidated during the year. Customers now have access to a good basic service with several different options they can adapt to their needs.

In January 2008, Swedbank was one of Sweden’s first banks to introduce SEPA Credit Transfers in accordance with the EU directive on the Single Euro Payments Area. This product allows Swedish customers to make and receive electronic payments in euro across borders as easily, securely and efficiently as within Sweden’s borders.

Restructuring the retail network and better co-ordination between channels

To achieve service leadership, Swedbank’s branches must be easily accessible and of a certain size. In recent years, Swedbank has restructured its retail network, reducing the number of branches while upgrading the level of service in those that remained. A number of full-service branches in metropolitan areas began offering Saturday opening hours in 2008. Around 60 large branches had already been offering late-night opening hours on weekdays.

The restructuring work continued in 2008, including through the transfer of a number of branches to various savings banks. On 1 January 2008, Swedbank transferred its operations in Lerum to Sparbanken Alingsås. On the same date, seven branches in the municipalities of Osby and Hässleholm were transferred to Sparbanken 1826 (formerly Kristianstads Sparbank and Tyringe Sparbank). At the same time as Swedbank has reduced the number of its branches, the network of alternative distribution channels has been enhanced with improved customer service as the overriding objective. In addition to Swedbank’s own retail network, customers have access to its products through the Internet Bank, Telephone Bank and the branches of the savings banks and partly owned banks. Full-service branches are further strengthened by a number of in-store banking outlets, which offer cash deposits and withdrawals as well as cash services in ICA grocery stores around the country. Service has also been improved for corporate customers through expanded access to extensive advisory services through special corporate branches.

The broadening and diversification of Swedbank’s distribution network necessitates greater integration between channels. Customers should be able to receive personal service regardless of the channel, which requires well-integrated, uniform systems for customer and product information. During the year, a system integration project was implemented with the goal of giving all of the bank’s advisors immediate access to complete customer records.

Process efficiencies cut costs, clarify offerings and drive growth

Swedbank has a leading position in the Swedish banking market in terms of both business volumes and profitability. To further consolidate this position, Swedbank must maintain great flexibility in order to supply attractive products to a variety of customer segments. More efficient processes facilitate a greater focus on customer service and, consequently, a better customer experience. Further development of the product platform in 2008 was therefore strongly focused on versatile, customer-focused products that are easy to understand and therefore uncomplicated to buy.

One of the principal aims of implementing the One Swedbank Group programme is to improve efficiencies in product development and distribution, thus creating greater flexibility to deliver attractive products for different customer segments.

Distinctions during the year

In the 2008 Corporate Barometer survey conducted by Universum Communications, Swedbank was ranked the most popular financial company to work for by business students for the second consecutive year. In this year’s Reputational Barometer conducted by Nordic Brand Academy, Swedbank was the highest-ranking company in banking and finance. In the insurance company Folksam’s annual survey of major Swedish corporations, Swedbank was voted the most gender-equal company.