How OP Financial Group accelerates digital transformation and leverages ecosystems in banking
The Ross Republic digital banking interviews showcase the work and ideas of digital banking innovators in Europe. Our aim is to represent a diverse set of interviewees and viewpoints and to provide actionable insights into strategy development, industry foresight and tangible use cases.
For this interview, we were joined by Krista Korelin, Director of Digital Retail Banking at OP Financial Group. Krista has over 20 years of digital business experience, worked previously at Google, Nokia, and Nordea and is also a start-up founder and advisor. The key topic of this interview was the impact of open banking and the role of platforms, the need to digitalise product portfolios and the importance of superior customer experiences in retail banking.
Krista, great to have you here. Can you shortly give an introduction to OP and your digital banking activities?
“Sure, thank you for the invitation. OP Financial Group is a cooperative, which means we are co-owned by 143 independent banks. We are the largest financial services group in Finland and have a wide branch network across the country.
Historically our position in the market has been very much about providing all financial services to all customers. We haven’t been selective. But, when it comes to developing new services, we have taken a bit of a leap towards personalization and customization. Already a while back we started micro-targeting our services for certain user groups. We began to target, segment and analyse the user’s needs in a more granular manner. For example, we looked at particular segments, such as self-employed micro-entrepreneurs, who in the traditional banking segmentation would fall somewhere in between consumer and enterprise customers. We started figuring out what did they need that our current service portfolio didn’t offer, used the data we had available and created a financial management service fully tailored for micro-entrepreneurs working in modern day gig-economy.
I think the analogy to develop digital services and products is typically that you are able to be more targeted and personalised and to utilise data to provide the right service to the customer at the right time. Of course, there are plenty of things we are still figuring out related to this but I think that we have understood already a while back that this is where the growth lies.
So, I would say that on the one hand we have a very strong traditional incumbent banking business and then we have on the other hand these new services and products that we pilot and roll out. The growth figures are very promising, and some of the first new initiatives we kicked off are actually currently either profitable or very close to being profitable.”
Could you give some insight into your role as Director of Digital Retail Banking?
“I am heading digital retail banking, so I am the business owner of the digital services and sales. My team is more than 100 people working on both the business side, such as digital sales and or premium APIs, as well as the development side, such as developing and operating mobile or online banking services. It combines business responsibility with digital development in one leadership role, which is really interesting for me.”
What is your favourite project?
“There are plenty. What I am really excited about is the topic of sustainability and how we as a bank can contribute to the wellbeing of the larger society. We have a lot of initiatives, some of them are still work in progress and we will talk more about them in the near future. However, for example, there is a lot of potential when it comes to offsetting carbon footprints for both consumer and corporate customers.
Another one is financial inclusion: how to make banking available not only for those who are financially well off, but also those who are financially unfortunate in our society. Financial inclusion in also about serving users who are not as savvy with digital services or teaching the younger generation to make smart decisions about personal finances, providing tools that you can learn about what is sustainable for personal finances and what is not.
In these areas we can really make a difference beyond just driving the business, which is obviously important as well. But, especially when you work at a large bank in a small country, your footprint in this particular area is actually quite significant. I am really happy that we can contribute to the society and give back.”
Editor’s note: The interview was conducted right before the Covid-19 crisis unfolded in Europe. Krista let us kindly know that as immediate sustainability actions, OP Financial Group is providing its consumer customers who have no income and small-business owners who are forced to shut down the opportunity to postpone monthly loan payments. Additionally, due to Covid-19 and the need to stay home, OP Financial Group has opened a special telephone help line for the elderly population who cannot go their branch office and need hands-on support with digital banking and other customer service needs.
Both sustainability and financial inclusion are quite large-scale, ambitious projects. Does digitalisation help you to drive them forward and do you see any synergies there?
“There are definitely synergies. First, it is not only our team, but these larger topics have input from the whole organisation. If you think about digital capabilities for the elderly, or solutions for those who do not have access to devices, or who might need speech or face recognition, our team is quite involved, because we actually build these services. But as a whole, the organization at large is very much involved.
For us, mobile banking is the most popular way of utilizing financial services, so our team operates and develops the largest customer interface. A lot of the projects that we do at some point manifest themselves at the mobile banking touchpoints. Obviously, we plan projects together, but then when it comes to designing and building these services so that they add value, then we are at the front and centre.”
Open banking has enabled new use cases. It would be nice to hear how you define open banking and how you perceive its impact on the banking business.
“If we start from the very beginning, in the pre-platform era the incumbent banks had a direct access to the consumer, for example via the branch office. Banks usually “pulled” the customers in with an anchor product, like a mortgage or insurance. You had such anchor services that tied the customer to the bank. Afterwards, you would try to increase the lifetime value of that customer by introducing other useful products or services to them, and by offering benefits by having several products from one bank.