In 2018, Landsbankinn introduced several innovative digital services, intended to make life simpler for customers and banking easier. A new Landsbankinn app, the first card app to allow customers to pay with their phones, a digital credit assessment and loan application process were among new offerings in 2018.
Seldom if ever have there been such significant changes to Landsbankinn’s services to retail customers as in 2018. Around 20 innovative digital service solutions were introduced, allowing retail customers to resolve much more of traditional banking business online. Various transactions that formerly necessitated a physical bank visit can now be taken care of at the customer’s leisure.
Landsbankinn places considerable emphasis on digital services and wants its customers, both retail and corporate, to be able to tend to their banking business easily, anytime and anywhere. Digital services should be time and effort-saving for customers and their needs resolved promptly. Customers should receive personal service tailored to meet their needs.
Towards year-end 2017, the Bank, in collaboration with the Icelandic Banks' Data Centre (RB), deployed a new deposit and payment system from Sopra. This was one the most complex and complicated IT undertakings ever attempted in Iceland. As a result, the Bank could focus on development and advances in digital services, in line with its new strategy.
The results have not been long in coming. Around 20 new solutions were launched in 2018 and the trend will continue in 2019.
A new Landsbankinn app was launched on Google Play Store and App Store in February and reception has been extremely good. Since the launch and until year-end 2018, the app has been upgraded several times and new features added. The app presents customers with a clear and concise overview of their finances as soon as they log on. It is also easy to access more details about each item.
The app includes all of the most-used features of online banking with some features added to the app before they appear in online banking.
Customers have been able to create foreign currency denominated savings accounts in online banking for individuals since December 2018. This feature quickly became very popular and in December, 50% of FX accounts were created by customers using self-service solutions.
In December, the Bank began offering online applications for housing loans and refinancing on its website. Reception was extremely positive and lightened the load on branch services. There was a considerable increase in new housing loans in 2018, and this solution, alongside the digital credit assessment introduced earlier the same year, allowed the Bank to meet this demand far quicker and better than before.
A web messenger was added to Landsbankinn’s website in December. Customers can use it to pose queries and interact with service representatives. The messenger provides quick access to banking services. This solution is an addition to the option of sending queries through Facebook Messenger.
As of December 2018, prospective customers have been able to enter into a business relationship through Landsbankinn’s website. This feature had been available in the app since June 2018. Individuals who hold electronic ID can become Landsbankinn customers via simple, digitalised means. New customers receive immediate access to Landsbankinn online banking and a current account and are then presented with the option of linking a debit card to the account, creating a savings account and/or securities services, all part of the same process.
It is very important to Landsbankinn to offer corporate customers throughout Iceland the best financial services available. Companies, just like private individuals, desire good access to digital banking services and the Bank emphasises providing robust and reliable online banking.
Use of Landsbankinn’s digital services has exploded and customers are quick to take new solutions into use. As the use of self-service solutions becomes more common, the role of bank branches has changed and customer visits declined. Increased emphasis is now placed on providing various financial advisory services in branches, including assistance in the use of new technology. In May 2018, the opening hours of 11 branches and outlets changed, and organisational changes were made to Landsbankinn’s Hagatorg branch in Reykjavík.
In 2018, Landsbankinn transferred its chief cashier function to a joint cash centre run by the three banks, i.e. Landsbankinn, Arion Bank and Íslandsbanki. The objective is to achieve operational efficiencies in the Icelandic banking system. The Icelandic Competition Authority had previously granted the three banks dispensation for the establishment and operation of a joint cash centre.
Work is under way on a bill that will transpose the EU’s new Payment Services Directive (PSD2) into Icelandic law. Transposition will lead to considerable changes in Icelandic payment services. Banks will be required to grant third parties, who fulfil certain conditions, authorisation to execute payment instructions and grant access to dissemination of payment information for accounts for debit specified by the customers who choose to avail themselves of the services of such third parties. It is as of yet unclear when the Directive will enter into effect in Iceland.
The changes PSD2 brings are sometimes referred to as open banking which involves making certain banking services accessible via APIs. Third parties such as fintech companies can log on to such APIs and develop own products and services or collaborate on products and services with the bank, for the benefit of customers. PSD2 requires certain services to be made available through APIs. APIs open up several possibilities for the development of banking services for Landsbankinn’s customers. Landsbankinn is currently working on the establishment of its own API.
In the long term, consumers are set to reap significant benefits from these changes if they remain open to the change, and the interplay between banks and fintechs will play an important part. Landsbankinn aims to be a leader in open banking, ensuring that its customers benefit from the new landscape and receive the best banking services available. In 2018, Landsbankinn was a founding member of the Fintech Cluster, the aim of which is to promote innovation in finance and work to improve and facilitate business transactions of all kinds.
Attempts at fraud on the Internet increased in 2018, focused mostly on CEO fraud that targets companies. Fraud attempts on social media also increased and the public seems to be easily persuaded to reveal their credit card numbers on Facebook. Lifestyle apps have also become popular hacker targets.
Landsbankinn places strong emphasis on security and participates in various international collaborations on improving Internet security whereby banks share valuable knowledge and experience of the fight against cybercrime, among other things. Cybercrime grows ever more advanced, as does the need for financial undertakings to collaborate in the fight against them. On a day to day basis, agility is the greatest defence, the ability to respond promptly to attempts at fraud and other risks. In 2017, Landsbankinn became a member of Nordic Financial CERT, a collaborative platform by Nordic financial undertakings, the first Icelandic bank to join. The objective of Nordic Financial CERT is to promote Internet security and combat cybercrime. This platform is robust and agile and has already proven its worth.
In 2018, the Bank’s experts actively participated in public debate in the media and conferences, and published articles and videos on Internet security on Umræðan, the Bank’s content and news site. Landsbankinn strongly advises companies, institutions and municipalities to carry out regular security tests, drills and boost on-going education for employees.