How do your ‘digital clients’ differ from that of your traditional clients? What is unique about their needs?
When we are talking about digital clients, we are typically speaking of those clients who are much more exposed to mobile devices and internet services which is the majority in Sweden where smartphone penetration is 63% and usage of internet among young people (16-29) is close to 100%.
Head of Cash Management, GTS, Large Corporates and Institutions
Julia Persson is the Head of Cash Management within Swedbank, overseeing all aspects of cash management for Large Corporates and Institutions. Prior to joining Swedbank in 2013, Julia was Deputy Head of Corporate Treasury, responsible for the internal bank at A.P. Moller-Maersk. She holds a Master’s in Business and Economics from Lund University and a Master’s in Accounting and Audit from Kiev National Economic University.
What we see, is that these clients are much better informed compared to traditional clients and that means they are able to compare products and services in a different way and make much more conscious decisions. It also leads to them being a little less loyal to traditional brands. The traditional relationship often doesn’t mean as much when clients are able to compare merchants and services on a fair price basis.
Another difference is that this type of client definitely tends to be more vocal. Thanks to social media, they are much more willing to recommend good services and providers – but they are not shy to criticise bad services on the other hand as well!
Additionally, they tend to be much more open to alternative channels and products. They are much more likely to consider, for example, digital solutions for financial services, financial advisory, savings products and investments. We think that simplicity and customer convenience is expected in all channels.
“My message to corporate treasurers is onboard as soon as possible. Nobody will want to miss this train and it is already moving forward.”
How does this inform your digitisation strategy? What services do you offer such clients to reach their customers through digital channels and enhance sales?
At Swedbank, we have a very customer-centric culture. By that, I mean that we want to understand what it is our customers value and translate that into banking services. Essentially, we focus on bringing the customer experience in banks processes – outside in.
When it comes to the digital value chain, in particular, we have customers on both sides – 8 million private customers and more than 600 thousand business customers in our home markets. Our strategy is to meet the needs of customers at both of these ends and become a part of their value chain.
For instance, we are replacing the traditional ‘top-up card’ with a simpler option in Swedbank mobile bank app, where you can fill up your prepaid phone card or even a Spotify account. That is good for both consumers and businesses. The customer gets immediate access to the purchased services, and the provider gets immediate access to liquidity and confirmation of any purchases.
Another example is real-time payments using the Swedish mobile payments service Swish. This is a payment channel that provides instant settlement and confirmation of transactions. Originally, it was developed for individuals to conduct private transactions between themselves. But now it is also being developed for trade and for e-commerce. We think this has the potential not only to replace cash transactions but also, simplify a payment flow between merchant and consumer in e-commerce. Again, with this solution, businesses instantly get liquidity and confirmation of purchases from their customers and customers have more payment options.
How do you deliver digital solutions? What, typically, is the client onboarding process for such solutions? Are there any prerequisite technologies the client needs?
For our private customers, our solutions are easily available through our channels: internet and mobile banking.
For the business, we want to share our aggregated experience working with the best clients in different industry segments and inspire new and more efficient ways of working. Therefore, we would start with the check-up, making sure that the entire treasury’s cash management process is thoroughly checked and looked over, and that no stones are left unturned. We break down clients’ treasury process (value chain) into parts and focus where there are the biggest improvement areas, prioritised in accordance to the clients strategic objectives. Thereafter, we set up a plan defining a way of working together.
Solutions may vary significantly – therefore no pre-defined technical prerequisites, rather an innovative mind-set and willingness to improve and excel. We help these clients grow and serve them in the best possible way without forgetting about our local perspective, sticking to that small company/entrepreneurial spirit that is the core of our heritage, our heart and soul. We want to be open, caring and keep it simple, no matter if it’s a newly started innovative e-com company, or a large well established B2C company. And it’s never about being fancy or complicated; it’s about getting the job done, creating results and values that can be seen and measured and always, at a fair price.
How can digital solutions in transaction banking and treasury services – eg E-invoicing – help improve treasury efficiency for your clients? How do you see such solutions developing in the years ahead?
Replacing many manual processes with electronic automated solutions does increase, significantly, the efficiency for treasury operations. For a very long time, the industry was talking about Straight Through Processing (STP), but now even Straight Through Reconciliation process are becoming more and more sought after.
In our view, that is bringing operations and treasury to the next level. That is good news for treasurers because it is freeing up time for them to focus on value added services for the company. This is providing them with an opportunity to become a true business partner, instead of constantly wrestling with manual processes.
In the end, digitisation is going to change the way almost all branches work. It will change many services and products, replacing them with cheaper alternatives that are much more readily available. That will also lead to much more effective production and services, and possibly even lower barriers in some branches.
It will require higher speed of activation from the business, and a new level of professional knowledge. The future is definitely with digitalised solutions for both consumers and business. My message to corporate treasurers is to onboard as soon as possible. Nobody will want to miss this train and it is already moving forward.