Arion Bank is on a mission to be the leading bank in Iceland for digital solutions. Arion has not, however, neglected to invest in its physical channel – as evidenced by the launch of a flagship branch. As Douglas Blakey reports, the new branch will also enhance the bank’s digital credentials
Location, location, location: Get that right if you are going to invest a significant sum in a flagship branch format. By that test Iceland’s Arion Bank is off to a great start.
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Reykjavik’s Kringlan Shopping Mall, the largest in Iceland, is the perfect spot for Arion Bank’s newest and most important branch in its ongoing service development.
Banks around the world are investing heavily in digital solutions, and Arion is not unique in targeting a market-leading spot via digital investment. Already, some 96% of all of the banks’ customers transactions are conducted digitally. At the same time, Arion cannot neglect the customers who still appreciate personal interaction when it comes to receiving complex financial advice.
Arion tapped UK-headquartered brand experience and retail design agency M Worldwide to craft the Kringlan Shopping Mall outlet. RBI speaks with Halldór Harðarson, marketing director and Ragnheiður Jóhannesdóttir, strategy and development manager retail banking at Arion about the project and why the branch investment is entirely in sync with the bank’s overall channel strategy.
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By GlobalDataHarðarson tells RBI: “We are determined to be the leading bank in Iceland as a provider of digital solutions. The goal is to make banking easy for our customers. We want our customers to be able to take care of their finances easily and conveniently.”
That aim covers the entire range of retail banking services from applying for a new account, requesting an overdraft or a mortgage or opening a new savings account.
The bank’s digital focus and the advent of electronic ID mean Arion customers can conduct all their banking via the Arion app, or using its internet banking service.
Arion’s digital innovations include:
- The bank’s mortgage application process is now fully digitised, and is much shorter and more straightforward for customers;
- Existing mortgages can now be refinanced online;
- Fully digital account opening; the only requirement is that new customers have an eID to sign the necessary electronic documents, and
- Arion’s Einkaklúbbur discount app has now been downloaded by more than 30,000 users since its launch in March.
Harðarson adds that customers have time pressures and are looking for convenience and productive solutions. Although increasingly self-reliant, they still require help to make life-changing decisions. They will, however, be resistant to formality or hierarchies, preferring to engage on a more equal footing where their opinion counts.
M Worldwide’s strategy for Arion Bank moves away from a transactional process-driven approach. As Jóhannesdóttir explains, the new branch is the experiential embodiment of Arion Bank’s brand promise: This is a bank where ‘Together we make good things happen’.
This ‘good things’ branch is counterless, and the flexible and reconfigurable space feels more like an Apple store than a bank, incorporating experiences that are digitally seamless and integrated with other channels.
The branch is, as Harðarson says: “Relevant, engaging, educational and inspiring – and a showcase for proactive, knowledgeable staff that can advise, guide and steer customers.”
Harðarson says: “It’s an upbeat and inspiring centre of excellence that puts customer aspirations first, delivering sound financial advice and planning pathways that creates an all-encompassing good feeling around finance to build stronger relationships and invite consideration.”
In summary, he says Arion had three main goals when it briefed M Worldwide. “Firstly, to give our existing customers a more relevant service by delivering a more effective and convenient branch experience.
“Secondly, we will use the new branch to attract new customers. It demonstrates our digital differentiation in the market place. And lastly, to express what the Arion brand stands for – we want to make good things happen in co-operation with our customers. The slogan of the bank is ‘Arion Bank – for the future’.”
As for the future, Harðarson says the bank will measure the success of the Kringlan Shopping Mall branch in terms of Net Promoter Score (NPS), as opposed to traditional monetary measures. “NPS is the main KPI. With good service comes more business,” he explains.
“We will try out new things at Kringlan and take what we learn from there to other branches across the network.”
Harðarson is upbeat about the bank’s partnership with M Worldwide. “We knew them. They worked well with our predecessor bank, Kaupthing, and they have worked successfully with other Icelandic retailers.
“We liked their take on what we wanted to do and they were focused and progressive in their retail thinking and how they developed the brief. They also understood Arion as a company – it has been a very successful partnership.”
David Martin, joint MD at M Worldwide, tells RBI: “We have been working in Iceland since 2003 and partnered with Kaupthing back in 2006, so we have a good understanding of the local market.
“The process has been very collaborative, from retail safaris to ideation sessions – it really has been a pleasure to work with Arion,” Martin continues.
“And this is not a single-branch kind of exercise – this is a hub in among the branch network that Arion can share and learn from. Kringlan really is a great framework for Arion showcase their content.”
