Together with Anna Werntoft, independent advisor, board member and ex-Chief Transformation Officer at Ikano Bank, we explored the complexities of transformation—specifically, how large-scale changes impact technology, culture, and customer experience. In the podcast, we delve into key insights from Anna’s leadership during Ikano Bank’s transformation journey. Her role offers a rich case study in how to navigate both the challenges and opportunities of transforming legacy banking systems into agile, customer-centric operations.

Transformation vs. adaption

When businesses are constantly in a state of transformation, the term itself can lose its significance. During our conversation, Anna and I agreed that true transformation represents a fundamental shift in an organisation’s operating model—one that impacts all levels and is often triggered when technological and organisational debt reaches a critical point, severely hindering the company’s ability to compete. In contrast, operational improvements and incremental innovation should be ongoing, integrated into the organisation’s daily processes.

The banking sector, particularly in Europe, is facing increasing pressure from high operating costs, regulatory changes, and rising customer expectations. For Ikano Bank, as with many others, incremental adjustments were no longer enough—a full-scale transformation was required. Ikano Bank’s experience mirrors a broader trend in financial services: transformation must be proactive, not reactive. As Anna highlighted, organisations that wait for a crisis to initiate change often find themselves struggling to catch up. Instead, legacy banks should embed continuous organisational improvement and innovation into their core operations, ensuring they remain agile and competitive in a constantly evolving landscape.

Rethinking the operating model

One of the biggest challenges Anna faced was reimagining Ikano Bank’s operating model across its eight markets. The bank’s legacy systems, typical of many traditional financial institutions, had become a barrier to efficiency. As Anna explained, the initial trigger for the transformation was technology—specifically, the need to modernise an outdated tech stack. However, it soon became clear that changing the technology alone wouldn’t be enough.

Anna’s leadership emphasised a holistic approach to transformation. The bank’s governance, processes, and team structures all needed to evolve alongside the technology. This comprehensive rethinking of the operating model was key to ensuring that the transformation would deliver long-term value, not just short-term fixes.

Culture as a transformation enabler

A major theme of our discussion was the critical role of culture in any transformation effort. As Anna and I explored, cultural alignment is often the overlooked but essential ingredient in driving change. Ikano Bank, with its strong entrepreneurial spirit inherited from its IKEA roots, had an advantage: This culture of innovation and adaptability helped smooth the transition to new technologies and ways of working.

However, Anna also acknowledged the challenges of integrating new talent—particularly those with digital and agile expertise—into a traditional banking environment. To manage this friction, she focused on clear communication and fostering a shared vision across the organisation. By aligning everyone around the ‘why’ of the transformation, Anna ensured that teams from different backgrounds could collaborate effectively.

Integrating ESG into the transformation

Our conversation also touched on the growing importance of Environmental, Social, and Governance (ESG) factors in business strategy. For Anna, ESG was not just a regulatory obligation—it was a strategic opportunity. Ikano Bank’s transformation was deeply intertwined with its sustainability goals, reinforcing the bank’s commitment to long-term profitability through efficiency and transparency.

Anna emphasised that ESG needs to be embedded into the core of the business, rather than treated as a separate initiative. At Ikano Bank, this was particularly evident in how the bank’s vision of sustainability shaped its transformation. By integrating ESG into the broader strategy, the bank ensured that its transformation was not only about meeting today’s requirements but also about positioning itself for the future.

Managing complexity across multiple markets

Operating across eight markets presented a unique set of challenges for Ikano Bank. As Anna noted, different countries have varying regulatory frameworks and customer behaviours, which made it difficult to implement a one-size-fits-all solution. This complexity required a flexible approach that balanced the need for standardisation with the need for localisation.

One of the lessons Anna shared was the importance of simplifying processes wherever possible. While it was critical to reuse technological components and systems across markets, the bank also had to remain adaptable to local nuances. By focusing on scalability without overcomplicating the system, Ikano Bank was able to implement changes that worked across markets while respecting the unique needs of each region.

Keeping customer experience central

During the episode, we emphasised the importance of keeping the customer at the centre of the transformation. In today’s banking landscape, where fintechs and neo-banks have redefined customer expectations, traditional banks must offer seamless, user-friendly experiences to remain competitive. For Ikano Bank, improving the customer journey was a key priority. The bank’s legacy systems had created pain points for customers, from slow processing times to inefficient interfaces. Addressing these issues through the transformation was essential, and the bank leveraged data to make informed decisions about how to enhance the overall customer experience. By focusing on online-offline integration and streamlining processes, Ikano Bank aimed to deliver tangible benefits to its customers.

Measuring progress and maintaining momentum

One of the key takeaways from my conversation with Anna was the importance of regularly measuring progress during the transformation. At Ikano Bank, transparency was crucial to maintaining momentum. Anna’s team made a point of regularly communicating both successes and setbacks, which helped keep the organisation engaged and aligned. Interestingly, Anna noted that resistance to the transformation was lower than expected. Many employees recognised the pain points caused by the outdated systems and were eager for change. By fostering a culture of transparency and involving employees in the process, Anna was able to maintain a high level of engagement throughout the transformation.