Retail Banking

Our main emphasis in recent years has been to enhance the customer experience, both at our branches and through digital channels. As our customers increasingly migrate towards digital services, the Bank has focused on diversifying the range of digital channels and on adapting our branch network to customers’ changing needs. We have improved efficiency by reducing overheads and downscaling the branch network, while also by making it easier for customers to use self-service banking options instead of visiting the branch or contacting the call centre.

Convenient banking

Customer experience is at the heart of Arion Bank. We ensure that the voice of our customers is always heard and all dealings with our customers are logged in our customer relationship management system. We use feedback from our customers to improve experience, services and processes. Our team is committed to understanding the needs and meeting the expectations of our customers. Banking services have evolved rapidly in recent years and it is vital we can offer customers the latest digital technologies. A new service strategy we call A Plus Service was launched and our frontline employees are going to undergo training incorporating lean management methods.

Our ability to offer outstanding digital services is one of Arion Bank’s key strategies. We have made great advances in this area, and the vast majority of contact with our customers is now through digital channels such as the App and Online Banking. A range of new projects were rolled out in 2018 and further innovations are in the pipeline. Innovations in 2018 include automated online loans for buying car, automated consumer loans and enhanced functions in the Bank’s digital channels, such as new notifications in the App.

Arion Bank has set itself the goal of being the leading digital bank in Iceland and our customers have been quick to adopt the new products we have launched. The Bank evaluates its performance in digital services according to Finalta’s Digital and Multichannel Benchmark and this shows that the Bank has achieved outstanding results in digital sales and services and is in the front rank globally in this respect. This has resulted both in increased efficiency and also enhanced customer satisfaction.

The Bank’s digital solutions have attracted attention abroad and during the year. Arion Bank was nominated for 10 international awards, winning four, including the most disruptive innovation of the year for the digital mortgage application process. The Bank was also nominated for the national enterprise awards, Íslensku þekkingarverðlaunin, and was named marketing company of the year.

Our larger branches employ hosts to ensure that our customers receive first-class service. Their role is also to provide guidance to our customers on our digital services. Good employee training is integral to the goal of further enhancing services at our branches. We have introduced a new design and look to the branches aimed at supporting our focus on value-added service and rapid service channels such as ATMs and online banking. Uniforms have been reintroduced to ensure that our employees are visible at our branches. Changes to the branch network are designed to bring added efficiency and to make services more readily accessible to our customers. Some branches were reduced in size and self-service channels were prioritized. In order to reduce the Bank’s ecological footprint, all marketing and promotional material in the branches is now in digital format.

Our experimental “futuristic branch” which opened at the Kringlan Shopping Mall at the end of 2017 has garnered a lot of attention and the number of visits has soared. The branch is designed to support rapid technological developments in banking and changed customer behaviour. One innovation at the branch was the introduction of video conferencing equipment, and it proved so successful that this technology has been rolled out at other branches. In 2018, more than 20,000 customers used video conferencing when dealing with the Bank. Meeting and conference rooms at the branch can be used to host various events. For example, the facilities can be used to hold meetings on financial issues, innovation, the economy or any other topics the customer may be interested in. The futuristic branch at Kringlan also has the longest opening hours of any bank in Iceland after our branch at Keflavík International Airport.

Several branches were merged during the year. In the autumn we began designing a new branch in Akureyri and aim to open it in a new location in the spring.

Evolving environment calls for changes

Arion Bank launched a new type of service facility in 2018 when we opened at the Hagkaup supermarket in Gardabær in October. This facility is very much in the spirit of the futuristic branch at Kringlan and people can access self-service banking channels 24/7. A similar facility was opened later in the year in Reykjavík. These facilities both enjoy easily accessible locations, with long opening hours but are small in size, each occupying less than 40 square metres.

A rapidly evolving environment requires new focuses and ways of doing things. The organization of Retail Banking has been reviewed and focuses have been changed. As the use of digital services increases, we remain committed to product development and remote services. We are also creating a special digital sales team whose aim is to enhance the customer experience, not just in Online Banking and the App but also through traditional channels such as the branches and the call centre.

Serving small and medium-sized enterprises

Retail Banking’s corporate unit specializes in providing services to small and medium-sized enterprises (SME) across all sectors. In order to optimize our services we have in the last few years gradually transferred the power to make decisions to the frontline and this has delivered excellent results.

The corporate team is responsible for loans and sales to SMEs. The unit is divided into three teams: corporate business, corporate solutions and vehicle & equipment financing. Each team has highly experienced set of individuals, each with a clearly defined area of expertise.

Loans to SMEs increased by 14% in 2018 and the loan portfolio continues to be well diversified. The main sectors are real estate and construction, seafood, and trade and services. The Bank also has a significant market share in agriculture.

At the end of 2018 the corporate business and corporate solutions teams were merged with the Corporate Banking division in order to bring the service offering to the Bank’s corporate clients to the next level.

Vehicle and equipment financing – standing out from the crowd

Since the Bank created its vehicle and equipment financing unit in 2012, we have assembled a team of experts in this field, and this has generated loan growth and brought in more satisfied customers.

The digital application process and increased automation has helped us distinguish Arion Bank from our competitors. The Bank is the only financial institution on the market offering this option and this brings benefits to both us and our customers.

The future is digital

It is clear that major changes lie ahead in the banking services industry, and Arion Bank aims to be at the forefront of those changes. Our wide range of digital innovations have put us in pole position as a provider of convenient banking. The popularly of our digital products clearly shows that our customers appreciate the enhanced service and usability offered by the Bank. We will continue on the same path in 2019 with the aim of consolidating our lead in this field.