Saturday , May 8 2021

– Sbanken chases after money and eats with its own advertising campaign

This week, news came that Norway’s largest bank DNB will buy its rival Sbanken. Norway’s least popular bank will thus buy Norway’s most popular bank. If the Norwegian Competition Authority does not set foot or shareholders in Sbanken are not afraid, the acquisition will likely be complete.

DNB’s offer is pricing the Norwegian bank mosquito at NOK 11.1 billion, which seems like a good thing. deal For Sbanken’s shareholders. DNB’s CEO, Kjersti Braathen, surpassed Sbanken’s offer with a new 30 percent of market value before the offer became known, and the offer was almost 50 percent higher than the average price over the past six months. Major shareholders like the investment fund Altor have already accepted the offer, and it’s not that strange that a sale yields more than NOK 1 billion to the private equity firm.

However, if Sbanken’s shareholders accept the offer from DNB, they will meet at the door. Since the launch of Skandiabanken in the early 2000s, the bank’s brand has been built on an anti-establishment position. Of course, it was Norway’s first free and fully digital bank with interest rates that no one else could afford, but Sbanken also created a story about the bank that is not part of capitalism. It is hardly possible to imagine two more distant brands than Sbanken and DNB.

Not long ago Sbanken had a massive marketing campaign calling the biggest banking players in Norway as scavengers. “Stay away from vultures,” Sbanken could have said. The advertising agency behind the campaign, which featured a suit-dressed vulture, was Good Morning Naug. “Switch to us instead – we are now lowering the price of more than 400 funds.”

Now the bank itself can be swallowed by the same bird of prey or its own advertising campaign.

It is not surprising that DNB is hungry at Sbanken. Received the bank digital banking As evident in both customer experience metrics, to a level that big players cannot afford. While Sbanken takes the first place in large customer satisfaction surveys, DNB hits bottom. As a large commercial bank, DNB will never be able to match Sbanken in these areas. DNB is the total bank from A to Z for both businesses and consumers, but it also makes it more expensive and cumbersome compared to pure online banks.

It is also a sign of times when big players in the banking market are investing in more brands. After a period of massive consolidation in the banking market with many major bank mergers, former CEO Rune Bjerke built the monolithic DNB brand. There were many brands that merged with DNB, such as Gjensidige Nor, Postbanken and Vital. DNB’s strategy has been one brand.

But in recent years, new bank-branded products have consistently appeared both outside and below the major market players. What will happen to the Sbanken brand if DNB manages to buy it is therefore nothing to say.

Kjersti Braathen says the banking rules state that the owner of the bank must be clear. DNB was never allowed to continue with the Postbanken brand, but at the same time, DNB has already embarked on a journey involving new brands. Vipps and the new insurance brand Future, joint venturesThere are also examples where it operates under other brand names besides major banks such as Sparebank 1 and BN Bank.

The biggest moment of tension, and most surprising, is the fierce opposition to the purchase that has become evident among Sbanken’s customers. Feedback from Sbanken’s customers was clear – at least thousands of people who angered social media and threatened customer flight. It is not common for people to walk on the barricades and stand up for their banks. Banks do not fully offer services that create high participation (retirement, savings, etc.) among consumers, and it would be more reasonable to assume that the opposition will come from the investor community or shareholders. But unlike DNB’s clients, Sbanken’s clients care so much that they are willing to flee if a new owner gets (too happy for newcomers Bulder Bank and Storebrand, both of whom had a great time digitally marketing themselves yesterday).

But the reputation effect is almost nonexistent and satisfied customers DNB is willing to buy. Customer loyalty cannot be bought anyway, as shown by Sbanken customers. It must be deserved and the starting point here is the worst. Sbanken’s clients love their banks and clearly hate DNB. It will be a huge challenge for DNB’s Kjersti Braathen and something the bank has to solve.

Then there are other drivers behind the purchase. As far as Kampanje knows, this isn’t the first time DNB sniffed out at Sbanken. Desire to receive digital banking To a new higher (simpler) level has long been discussed internally in DNB. However, creating a separate digital bank (a la Sbanken) in DNB’s complex IT systems was deemed too laborious. This will suspend all other development courses in DNB for years, and the more profitable DNB customers run the risk of switching to cheaper network solutions.

Then it became easier for the DNB manager to buy Sbanken.

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