To beat the fintechs, Swedish banks must act fast. This means putting an immediate focus on transforming their legacy platforms to deliver an agile and contextual omnichannel customer experience.
Today, banks are under pressure to guard market share as their dominance is no longer protected by high market-entry barriers. The banking customer is changing too, as digitally-savvy consumers expect banking services to be delivered in a different ways and with a digital banking experience.
New players are also disrupting banking operations. The market has opened to fintechs such as Klarna, which provides an end-to-end view of loans, seamless Know Your Customer processes and quick communications. It’s therefore important that large incumbent banks become more flexible and accelerate time-to-market for new products and services.
Swedish banks excel against European peers in some ways, for example in having advanced identity authentication and cash-free capabilities, but they can do more to improve the customer experience. The focus on digital investments remains very siloed with little linkage between banks’ mobile apps and websites. Digital investments need an omnichannel ROI metric, but established banks are yet to achieve a seamless omnichannel experience. Some of the biggest barriers are legacy technology and processes which make it hard to move swiftly.
Banks need new thinking to transform. They should work with partners who can help them to move fast and manage change, with local know-how as well as global development centers that accelerate projects while keeping costs manageable. It’s about generating new ideas then actioning them in minimal viable products.
Changes to the regulatory landscape are just as important. For most Nordic banks, compliance is one of the biggest drivers, covering anti-money laundering and reporting. This impacts profitability and requires investment in technologies and processes that can be adapted rapidly for future rules.
Legacy practices and platforms often hold Swedish banks back from rapid change. But fintechs don’t have this legacy anchor, so they must act now.