Synopsis
This case study explores Handelsbanken's decentralized approach to retail banking, which allows for the tailoring of products to customer needs and devolves much of the decision making to the local branches.
Description
INTRODUCTION
Handelsbanken has achieved strong growth in the UK retail banking market, and this growth rate has increased even in the wake of the global financial crisis. The decentralized structure has allowed Handelsbanken to be more flexible with its offering and to tailor its products to its customers' needs. This customer-centric approach to banking has resulted in high levels of customer satisfaction.
FEATURES AND BENEFITS
- Be more customer-centric by understanding how a decentralized structure can help design products which cater for a customer's individuality.
- Achieve success by understanding how to market a proposition without national media campaigns.
- Rebuild trust with consumers through learning how a traditional model of banking can strengthen relationships with customers.
- Strengthen relationships with customers by learning the importance of a personalized approach to banking.
HIGHLIGHTS
- Handelsbanken's decentralized model allows for the tailoring of certain products such as mortgages and loans to the individual needs of customers. This customer-centric approach to banking has resulted in high levels of customer satisfaction and loyalty for the bank.
- Handelsbanken has grown solidly in the UK without the use of national media campaigns, instead relying on practices such as word of mouth marketing. Word of mouth marketing has a strong impact, as consumers trust their friends and family to recommend high quality products and will view these as "tried and tested".
- Handelsbanken's decentralized structure is reminiscent of a more traditional model of banking. It is also a model which has helped Handelsbanken to emerge unscathed from two financial crises. This offers reassurance to the consumer and is likely to increase levels of trust.
YOUR KEY QUESTIONS ANSWERED
- How can a decentralized model make a FS provider more customer-centric?
- How does a branch focused model continue to succeed in retail banking?
- How is it possible to grow a business without national media campaigns?
- What are the benefits of tailoring products to customers individual needs?
TOC
OVERVIEW
ANALYSIS
- Handelsbanken has a decentralized structure, which builds affinity with consumers through tailored products
- Key issues covered in this case study include:
- Handelsbanken's decentralized structure allows for a more individual experience
- A decentralized structure differentiates Handelsbanken from the market
- Staff are integral to the success of a localized model
- The Handelsbanken model is reminiscent of traditional banking
- The Handelsbanken model has been tried and tested in Sweden
- Handelsbanken has experienced impressive growth despite a low profile
- Handelsbanken primarily targets a mass affluent segment of consumers
- Handelsbanken designs its products around the needs of the individual customer
- In branch interaction between the consumer and Handelsbanken increases customer loyalty
- Localization continues with Handelsbanken's online offering
- The Handelsbanken model produces high levels of customer satisfaction
- Handelsbanken's offering aligns with the Individualism and Authenticity Megatrends
- Handelsbanken allows consumers to have products tailored to their individual needs
- Handelsbanken attracts customers who are proactive about their finances
- Handelsbanken's "early era" style of banking delivers authenticity for the consumer
- Handelsbanken's low brand visibility may limit its authentic appeal for some consumers
- There is much to be learnt from Handelsbanken's model of banking
- Handelsbanken could use social media to engage with consumers
- Handelsbanken is likely to receive significant recognition via word of mouth
- Handelsbanken could expand its offering to include products such as credit cards
- Handelsbanken has demonstrated that mass marketing is not essential to growth
- Targeting a niche segment helps providers to meet consumer demands
- Staff are essential to meeting consumer needs
- Decentralization has a range of benefits for the consumer
APPENDIX
- Definitions
- The Datamonitor Financial Services Consumer Insight Megatrend Framework
- Methodology
- Secondary reading
- Further reading
- Ask the analyst
- Disclaimer
FIGURES
- Figure: Handelsbanken branches have a greater degree of autonomy than the rest of the UK retail banking market
- Figure: Handelsbanken model takes a greater account of the customers needs
- Figure: Handelsbanken products are tailored to the consumer by the branch
- Figure: Customers are advised to contact their account manager to access online banking
- Figure: More than 40% of consumers strongly agree that they would like to be treated as individuals by their financial services provider
- Figure: A large proportion of consumers require their financial services provider to be a well-known brand
