Nordea aims to stay one step ahead of the rush to deliver new products and services by understanding and anticipating the needs of customers, elevating traditional functional transaction banking offerings to dynamic tools that support strategic decision making.
Nordea’s TxB Product Management unit includes all of the parts of transaction banking that are often split into silos in traditional banking organisational structures such as Cash Management, Trade Finance & Working Capital Management, Cards and Mobile Payments. By organising a holistic product development team that caters to the full scope of transaction banking, the goal is to increase the opportunities for identifying end to end treasury solutions.
Katy Spicer Eriksen, Head of Liquidity Management and Corporate Channels at Nordea, says: “Treasurers don’t just care about liquidity or payments in isolation, which can often be the way product teams are set up. Expanding the scope of a product unit to include the wider range of TxB areas means we can benefit from synergies that meet the full needs of the Treasurer. For example, liquidity is really quite linked to trade finance because it’s all about making sure there are available funds to run a business.”
Expanding the scope of a product unit to include the wider range of TxB areas means we can benefit from synergies that meet the full needs of the Treasurer.
Nordea’s approach to developing new products involves close customer interaction to gain a deeper understanding of ways of working and to uncover customer pain points. The aim is to continue to develop tools that empower Treasurers to be able to make strategic decisions, particularly when on the go. In this way, Nordea’s TxB Product Management team are moving away from the idea that transaction banking solutions should focus narrowly on the ‘nuts and bolts’ processing products towards providing key information for making better business decisions.
Katy adds: “Establishing a best in class transaction banking product management function is of course about understanding our customers’ needs and requirements but also it’s about becoming more strategic. Whereas traditionally a bank’s product function can be quite reactive in an ad hoc way, we aim to try to figure out our customers’ needs and perhaps even find the things they don’t know they need yet. It’s about being able to anticipate what our customers need and when, rather than reactively having to catch up all the time.”
Establishing a best in class transaction banking product management function is of course about understanding our customers’ needs and requirements but also it's about becoming more strategic.
“Working more collaboratively with our customers means gathering much more meaningful insights than just requests to ‘build this file format’, for example. We want our customers to tell us where they have challenges and we’ll come up with solutions to help them meet those challenges.”
“Apple is a good example of where we want to be with regards to product development. They are amongst the best in the world at analysing behaviours and then figuring out how to improve people’s listening or viewing experiences, for example. Apple are very much led by their product innovation department. Obviously, banking is a different industry, but we are trying to elevate ourselves to the same level of strategic thinking to become thought leaders in finance. Not only are we meeting our customers’ needs now but accurately aiming to predict their needs for the future,” notes Katy.
Working more collaboratively with our customers means gathering much more meaningful insights than just requests to ‘build this file format', for example. We want our customers to tell us where they have challenges and we'll come up with solutions to help them meet those challenges.
With the Nordics currently one of the world’s leading centres for digital innovation, there are a number of initiatives creating opportunities for further product development in the coming years. Amongst these are the P27 project to create the world’s first cross-border real-time payment infrastructure in the Nordics and Nordea’s continued leading position in Open Banking.
“Our process for innovation means constantly working out fresh ways to come up with new products. P27 offers great potential for developing new Nordic wide offerings. We are of course busy working out how to turn this industry change into tangible new solutions that really benefit our customers.”
“In Open Banking, Nordea has already delivered value to customers by enabling them to get real time account information and soon also initiate payments in their preferred interface. These are like dipping a toe into the water of how a piece of tech that began as a result of regulatory requirements has now actually blossomed into something that delivers much more to customers than just compliance,” says Katy.
Moving fast to keep up with the pace of innovation means deciding when to build a new product in-house or partnering with an external provider to develop a new or existing solution.
Katy Spicer Eriksen adds: “We work with a concept of ‘business challenges’ where we find a customer pain point and decide whether we can solve it by adapting one of our own products or whether it can be solved by partnering with an external solution provider. Nordea’s partnership team headed by Sofia Ericsson Holm, Head of Strategic Partnerships and Open Banking, is able scan the market to check if there’s a potential partner that we could work with and which collaboration model fits best. We want our customers to benefit from an innovative fintech offering as well, so taking a partnership approach is very important. We’re not going to become fintechs ourselves, that’s not the purpose, but we are experts in finance. We should be able to take all of our expert knowledge and translate that into meaningful solutions for our customers.”
We're not going to become fintechs ourselves, that's not the purpose, but we are experts in finance. We should be able to take all of our expert knowledge and translate that into meaningful solutions for our customers
For the time being, customer requests for Nordea’s TxB Product Management team continue to be centred around the creation of instant and frictionless payment solutions.
“It’s very much around real time and being always open and always on. Supporting global interconnectivity through standardisation. Being ‘always on’ means bringing the bank directly to our customers, wherever they are. Treasurers and decision makers want real time access to their information without having to login every time they want an overview of their financial positions. We are seeing more and more requests from our customers that can be described as ‘bringing the bank to you’,” says Katy.
Treasurers and decision makers want real time access to their information without having to login every time they want an overview of their financial positions. We are seeing more and more requests from our customers that can be described as ‘bringing the bank to you’.
The introduction of agile ways of working and an MVP (Minimum Viable Product) approach means that the team are geared up to increase the release of more innovative products and solutions in the future.
“We have different hubs for development and have moved our processes to safe agile terminology, which allows us to release products more often. Using an MVP way of working means that we can put products on the market incrementally rather than delivering a completed product every two years. There are exciting times ahead, so watch this space!” concludes Katy Spicer-Eriksen.