A bit of history
National Bank of Greece (NBG) is the traditional, formerly state-owned bank that one can find in most Greek markets. It was established in 1841 and was the first bank to be set up in the Modern Greek State, destined to be a part of the economy of Greece throughout its 180-year history. Today, NBG heads one of the largest financial groups in Greece, playing a key role in the efforts to support the Greek economy and the economic and social transformation of the country.
With an extensive branch network that at its peak reached 600 branches, NBG was—and to a large extent still is–present in every corner of the Greek state, be it in a bustling urban neighborhood in one of the major cities, a peaceful rural village somewhere on the mainland or a remote island in the Aegean Sea. In some cases, NBG plays such a big role in the local community that the branch manager enjoys social recognition next to the mayor, priest and doctor.
That reach has allowed NBG to build strong relationships with its customers, enjoying the trust of a disproportionate number of the country’s population compared to its market share. It even used to be the case that when a child was born, his or her parents or grandparents would open an account with NBG and deposit money there for the child to use upon reaching adulthood.
A change in market dynamics
Following the economic crisis of 2008, Greece suffered a prolonged period of recession, mostly due to overborrowing on the part of the state. With the state defaulting on its obligations to foreign lenders and its citizens, people soon found themselves unable to repay their loans to banks. It was time for the Greek banking system to test its limits.
At the brink of disaster, deals were struck for banks to be saved, and with them, people’s savings, but at a cost. The healthy profit margins that supported sizeable distribution networks and large branches with numerous employees were a luxury of the past. In their place were memoranda that mandated operating-expenses rationalization by targeting the biggest contributors to a bank’s cost side—physical distribution networks and front-line personnel—be put into effect.
Banks moved to reduce their physical networks’ size and reach, together with the number of people on their payrolls. Indeed, during the years that followed, banks in Greece reduced their number of branches from 3,300 to 1,800 and number of employees from 63,500 to 37,700.
A change in strategy for NBG
Our analyses of our customer base and needs allowed us to design a specific strategy and core role for each one of our distribution networks. Expensive branches were re-purposed to focus on advisory and sales, and front-line personnel were re-skilled to better support this new role. Access to cash happened through self-service machines. Any other services needed to be migrated online.
The challenge was two-fold. On one side, we needed to build into our digital offering the necessary functionality. However, this was not enough. We also needed to educate our customers to use the new platforms effectively.
In the online world, there is this notion of build it, and they will come. When it comes to banking—and any traditional industry, for that matter—this is a myth. It is not enough to build a great online banking service. To move people away from the ritual of visiting a branch, you need to design and run a constant awareness and educational campaign. In NBG, this involved several actions. To create awareness, we turned to online marketing. We selected ambassadors who are popular among our target groups and crafted a message indicating that something interesting was happening online, and they were missing out. Once we created awareness and interest in the digital offering, we had to describe the premise of this new service. We created guides allowing customers to work their way through our most popular services, such as account-balance inquiries, utility-bill payments and money transfers, and posted a series of walk-through videos. Our branch employees were also tasked with consistently showcasing our digital offerings.
In this way, we won the interest of our customers; they were even intrigued about the services they could find online. The natural next step was to create a seamless way for them to access these services. NBG was the first in the market and among the select few in Europe to offer a fully digital way to register a new customer, allow him or her to open his or her first banking account, obtain a debit card and digital credentials. All from the comfort of a mobile device. Of course, for existing customers, we also offered the ability to get digital credentials that allowed them to access our online services via a digital journey that took no more than two to three minutes.
The effective combination of awareness-promoting actions and simple, intuitive onboarding journeys allowed NBG to move a large percentage of its customer base online, reaching three million registered customers. In a country with approximately 7.5 million bankable citizens, of which approximately six million are internet users, that was quite an achievement.
As consumer behavior shifts dramatically, more and more of our day-to-day activities take place online. From grabbing our lunch and dinner through food-delivery apps; to entertaining ourselves via Spotify, YouTube and Netflix; to educating ourselves on edX, Coursera and Udemy; to getting our daily dose of news through every major outlet—life is increasingly moving online.
User engagement is the new currency. Early internet startups/later technology giants, the likes of Google and Facebook, put engagement and establishing an extensive user base of a couple of billion active users before profit. Likes, loves, comments, retweets add up to addicted users to a new form of social status, online fame. The question becomes: How can banks compete to get their own shares of users’ interest?
We, at NBG, decided to do that by providing useful content and needed functionality in front of our users at the right times. Content that is created by features such as personal financial-management tools that generate daily, weekly, monthly and/or annual reports of a user’s spending habits and offer some indication of his or her financial health and insights that can be used to improve personal finances. Functionality that allows the user to customize products to better suit his or her needs. As an example, a series of switches allows our users to freeze or unfreeze their cards or specific card features, such as the ability to use their cards online or in a contactless manner, set limits for every transaction type and more.
On top of that, we built into our apps a set of meaningful notifications triggered by events of interest to the user. Alerts for account-balance limits as set by the user, payments performed by a user’s card and—our user customers’ favorite—alerts for when a user’s salary or pension is deposited into his or her account.
As I mentioned before, our branches and front-line employees better serve our strategy by re-purposing to provide advisory and sales. However, as people move increasingly online, digital sales, especially for non-material goods, such as the ones we provide in banking, become increasingly relevant.
Our priority was to build online products to cover our customers’ day-to-day banking needs, such as deposit accounts and debit or prepaid cards. Through those, our customers can perform any type of transaction online. Following that, we wanted to offer our customers an easy way to save money. We did that by providing savings accounts and a range of time-deposit products. Integrating those with insights from our personal financial-management tools allowed us to create unique customer experiences. We also wanted to give our customers access to credit and did so via instantly approved credit cards and microloans, with time to money—i.e., the time between application submission and money deposited to the customer’s account— ranging from five to ten minutes. Lastly, we are now working on our first bancassurance products, personal-belongings insurance and auto insurance, and next year, we plan to also offer health and property insurance online.
The results are stunning. Currently, we sell more than 20,000 products every month online with an exponentially increasing trend. In some cases, the numbers of products sold online are remarkably close to those sold through our established branch network.
We do all this for our customers. It does not make sense to do it alone. The last part of our strategy is all about involving our users so that we can co-create our digital offerings. In the coming days, we are launching a community platform—first to our 5,000 colleagues, most of whom are close to our customers, and then to our users. We plan to use this platform to effectively prioritize features to build into our offerings, run A/B testing on elements of our UX (user experience) design and more.
On top of that, we are using this community to engage the bank’s senior managers and recruit them to be active digital ambassadors.
A happy ending—and a great beginning
During the past two years, our digital team has been working hard to expand our digital offerings according to our strategy. We are now in the position to claim that our complete offering is the best in the market. Key figures support our claim. And innovation has been central to achieving our goal.
NBG enjoys the largest digital customer base in Greece, with 3 million registered users. When it comes to user activity, every month, 1.65 million customers are active on one of our platforms and/or apps. Our active users log into our apps on average of 16 times per month.
We sell 800 products and process more than 200,000 transactions—every single day. Our apps now have more than 3.4 million downloads in Google Play Store and Apple’s AppStore and is the most downloaded banking app in the market. We increased our market share in active mobile users to 31 percent and our share in transactions performed via mobile to 27 percent.
The award for “Best Innovation in Retail Banking Greece 2020” from International Banker is a testament to the results of our work over the past years and an encouragement for our team to deliver even more innovative features and market firsts in the coming months.