Owner-customer interests guide our operations

 

Owner-customer interests guide our operations

OP is owned by some 1.8 million owner-customers. In accordance with our mission we, owned by our customers, create prosperity and wellbeing for our owner-customers and our operating region. Owner-customers are therefore at the core of our business.

Everyone can become an owner-customer by paying a cooperative contribution to one's own OP cooperative bank. Such contribution entitles owner-customers to a diverse range of benefits and gives them the right to vote in the election of the bank's Representative Assembly. It is a one-time contribution – no other payments or charges exist. Since 2014, our owner-customers have been able to make additional investments in their own OP cooperative banks by means of Profit Shares. An OP cooperative bank will pay annual interest on Profit Shares on the basis of its financial performance, thus channelling part of its good performance for the benefit of its owner-customers. OP anticipates paying interest of 3.25% (3.25)  on Profit Shares for 2017.

 

 

Benefits and OP bonuses for owner-customers

A significant part of business performance is returned to owner-customers in terms of OP bonuses that come from banking, non-life and wealth management services and that are used to pay service charges and insurance bills. Owner-customers also get discounts on their insurance policies.

Moreover, owner-customers have access to specific owner-customer service packages, such as daily banking services, a new long-term fixed rate home loan and the OP investment partner service. Owner-customers can also buy, sell and switch the majority of OP funds’ units with no transaction costs.

A total of 103 million euros (101) of bonuses were used to pay for banking and wealth management services and 114 million euros (107) to pay non-life insurance premiums in 2017. Since 1999, we have granted over 1.9 billion euros in OP bonuses. In 2017, our owner-customers earned a total of 220 million euros (208) in OP bonuses. Non-life Insurance loyalty discounts granted totalled 70 million euros (67). Not having to pay most transaction charges related to mutual funds saved our owner-customers 5 million euros.

Owner-customers influence in various ways

In accordance with cooperative principles, owner-customers can, if they so wish, have an impact on the bank’s decision-making and development of operations. Through their representatives in the bank’s governing body, owner-customers can promote business and prosperity in the region.

Owner-customers can have an influence on the bank’s activities, for example, in the following ways:

  • In the OP cooperative bank’s governing body: The Representative Assembly is the highest decision-making body of the bank with owner-customers acting as its members. An owner-customer can run as a candidate for the Representative Assembly election and if elected, he/she can contribute to the bank’s activities. Every owner-customer has the opportunity to vote in the election of the Representative Assembly of the bank he/she owns.
  • In digital communities: As a new channel of influence, many banks have introduced an owner-customer community, a digital forum where the bank regularly requests owner-customer opinions and feedback on various matters. Through the community, owner-customers can influence, for example, where the bank donates funds for charitable purposes.
  • In product and service development: Customers can participate in OP’s product and service development in OP Helsinki's Vallila branch and online on our OP Lab website and our customer community Paja.

The biggest electronic voting in Finland thus far

In the autumn of 2017, OP Financial Group's 81 OP cooperative banks held an electronic election of the Representative Assembly. The nomination of candidates, using the voting advice application and the act of voting itself was possible online. Owner-customers elected from among them a Representative Assembly to their bank for the next four years. The election results were published in early December 2017.

Election of Representative Assemblies at OP:

  • 81 OP cooperative banks organising their election simultaneously
  • 1.5 million electors, of which 1.2 million had the opportunity to vote electronically
  • 5,600 candidates, with almost 2,400 elected to a Representative Assembly
  • Over 300,000 voters, with a 26% turnout
  • 66% of votes cast electronically, 34% by postal voting.

 

 

 

 

 

Highlights

 

Highlights

Redesign of OP eServices together with customers

First opened as a beta version to customers in autumn 2016, the redesigned OP eServices and online bank op.fi was then further developed based on customer feedback. In 2017, the new op.fi began providing banking and insurance services on a large scale for private and corporate customers. OP is among the rare financial industry players to have opened up an early beta access to its service. From the very beginning, OP has developed the new service together with its customers and is still collecting customer feedback that will guide further development.

Easier payments and more options

In April, we adopted the Siirto service developed by Automatia, jointly owned by Finnish banks. Siirto enables its user to make a real-time payment to a friend simply with a phone number. Online and mobile payments became easier with our Pivo app's new feature which enables the user to pay purchases conveniently with Pivo, without key codes. OP also developed and launched its first payment bots for Facebook Messenger.

OP’s Mobility Services diversify

OP Kulku, OP’s first mobility service launched in 2016, offers electric cars as a service. In 2017, OP also introduced DriveNow car sharing charged by the minute in Helsinki and OP Flexible Car providing rental cars for a month or a longer period offered nationwide. In May, OP also announced it will build with Fortum almost 100 charging stations in Finland.

Hiiop: OP Financial Group's gift to the 100-year-old Finland

To join Finland’s 100-year celebrations, OP Financial Group wanted to lower the threshold for participating in voluntary work. Inviting everyone in Finland to do voluntary work together, OP created a volunteer work exchange site at Hiiop100.fi. The website enables both announcing and searching for volunteer opportunities. During the jubilee year, OP Financial Group’s personnel and administration did over 274 person years of volunteering work together with partners and other people.

Pohjola Hospital network expands

In 2017, the Pohjola Hospital network was expanded by two new hospitals as the first Pohjola Hospital, located in Helsinki, and the Tampere hospital opened in 2016 were complemented by the Oulu hospital in May and the Kuopio hospital in August. All four Pohjola Hospitals provide basic healthcare and special healthcare services, examinations, surgery and rehabilitation on an extensive basis.

The biggest electronic voting in Finland

In November, OP Financial Group’s 81 cooperative banks held the election of the Representative Assemblies electronically, where owner-customers elected from among them the Representative Assembly for their own bank for four years. A total of almost 2,400 members were elected to the Assemblies. The number of candidates totalled over 5,600.

Motor Liability Insurance Act gives rise to a new type of motor liability insurance

Together with its customers, OP developed a new motor liability insurance offering the market’s highest initial bonus for new drivers, quicker bonus accumulation for drivers without claims, high maximum bonus and bonus cover for those driving a long time without claims. Already almost one-third of OP’s motor liability insurance policies, or over 250,000, are currently compliant with new legislation.

Strong IPO year

OP was involved in arranging initial public offerings of Finnish companies and was the only party to take part in all IPOs on the main list this year – Kamux, Silmäasema, Rovio and Terveystalo. In Finland, 2017 marks the best IPO year so far in terms of euros, as the total value of IPOs attained some 1.7 billion euros.

Success for OP’s first crowdfunding project

OP Crowdfunding’s first investment project involved the ice cream factory Suominen's Milk Ltd which sought capital for growth and to start exporting its organic ice cream, Jymy. The crowdfunding round was a success, as its minimum target of 200,000 euros was raised in two weeks and Jymy received the targeted number of new shareholders. The final amount raised was over 400,000 euros. OP's second crowdfunding project began in December, with the Nokia-based clothing manufacturer Papu Design, reaching the target already by the end of the year.

Updated CSR programme targets becoming carbon positive

OP's updated corporate social responsibility (CSR) programme sets ambitious targets for the future. One of them is to make OP carbon positive by 2025. The main themes of OP’s CSR programme are promoting sustainable economy, supporting regional vitality, people-first and participative approach and the promotion of health, safety and wellbeing.

 

 

 

 

 

OP's main business segments

 

OP's main business segments

OP has three main business segments: Banking, Non-life Insurance and Wealth Management. We provide our customers with the most extensive and diversified range of banking, investment and insurance services and the best loyalty benefits in the country.

Banking is OP's biggest business segment, and OP is Finland's leading provider of home and corporate loans. For private customers, OP's Banking services and products include daily banking and payment services, loans, savings and investments. We provide corporate customers with financing, payment transaction and cash management services, investment services, and expert services related to business development.

OP is also Finland’s leading non-life insurer. We provide our private customers and corporate and institutional customers with a diverse range of comprehensive insurance solutions. Through our new type of service concepts, digital solutions, high-quality network of partners and process efficiency, we are continuously enhancing our claims services’ customer experience while creating competitive advantage. Non-life Insurance consists of OP Insurance Ltd, A-Insurance Ltd and Eurooppalainen Insurance Company Ltd.

OP’s Wealth Management has Finland’s most extensive service network for saving and investing. We provide the best digital wealth management services for the saving and investing needs of private and corporate clients with a client-driven approach, and a unique Private Banking experience. We provide a diverse range of services and products in unit-linked insurance, mutual funds, and discretionary and advisory mandates.

Towards customer-focused service concepts

OP’s strategic aim is to gradually change from a plain financial services provider to a diversified services company of the digital era. Increasing customer expectations and change in customer behaviour encourage us to create comprehensive solutions beyond industry boundaries. We will gradually shift the development focus from individual products towards customer-driven service concepts, which thus far number four: Housing-related Services, Mobility Services, Health and Wellbeing, and Management of Finances. Among the above service concepts involving areas new to OP, the most advanced are Health and Wellbeing, and Mobility Services.

OP took its first step in branching out into health and wellbeing services already in 2013 when the first Pohjola Hospital was established in Helsinki. By now, OP also has hospitals in Tampere, Oulu and Kuopio. The hospital network will be completed in May 2018 when the Turku hospital opens its doors. All Pohjola Hospitals provide basic healthcare and special healthcare services, examinations, surgery and rehabilitation on an extensive basis. The range of specialties has been gradually broadened and, in the next phase, OP will establish a nationwide network of medical centres and grow its occupational healthcare business.

OP Kulku, OP’s first mobility service launched in 2016, offers electric cars as a service. In 2017, we also introduced DriveNow car sharing charged by the minute in Helsinki and OP Flexible Car providing rental cars for a month or a longer period offered nationwide. We also announced that we would build with Fortum almost 100 charging stations for electric cars in Finland. Continuing the active development of Mobility Services, we are determined to introduce new concepts revolutionising the mobility field in Finland.

 

 

 

 

 

Corporate social responsibility highlights 2017

 

Corporate social responsibility highlights 2017

We updated our corporate social responsibility programme

The main themes of OP’s corporate social responsibility programme are fostering sustainable economy, supporting regional vitality, people-first and participative approach and the foster of health, safety and wellbeing. The programme defines goals and targets for a broad range of activities and for all areas. One of them is to make OP carbon positive by 2025. Read more from our corporate social responsibility programme.

Hiiop – 100 years of volunteering

OP Financial Group's gift to the 100-year-old Finland: 274 person-years of volunteering. In honour of the Finland 100 jubilee year, OP wanted to lower the threshold for participating in voluntary work. Inviting everyone in Finland to do voluntary work together to attain 100 person years of volunteering, OP created a volunteer work exchange site at Hiiop100.fi. The website enables both announcing and searching for volunteer opportunities.

During the jubilee year, OP Financial Group’s personnel and administration did over 274 person years of volunteering together with partners and other people. This involved, for example, helping families and schoolchildren living on limited means, contributing to prevention of loneliness among elderly people, improving young people’s financial literacy, promoting nature values and participating in various fundraising projects.

During 2017, more than 3,000 voluntary tasks around Finland were posted on Hiiop100.fi, an exchange service for volunteer work. Volunteer work during the jubilee year has deepened OP’s social role and substantially expanded our relations with the third sector.
As part of its corporate social responsibility, OP will continue to maintain and further develop the Hiiop100.fi service and enable its employees to do voluntary work during working hours also after the jubilee year.

Read more about opportunities for volunteer work at Hiiop100.fi.

 

OP joined the FIBS Diversity Network

OP joined the FIBS Diversity Network in autumn 2017. On joining, members sign a Diversity Charter by which they engage themselves in developing their management and service practices through diversity principles of the Charter. Read more about the FIBS Diversity Network.

 

Solar power from rooftops

The building of solar power stations is a concrete example of OP’s corporate social responsibility programme updated this year. OP will build on the roof of the Vallila campus a solar power station, which will probably also be the largest installed into an office property in Finland. Solar panels are already creating energy in Kuopio and Oulu on the roofs of Pohjola Hospitals. The hospital under construction in Turku will also have solar panels. Solar power has also been used in buildings developed by OP Property Management Ltd. OP is currently looking into the viability of having solar power stations installed in the roofs of member cooperative banks around Finland.

 

The biggest electronic voting in Finland

In November, OP Financial Group’s 81 cooperative banks held the election of the Representative Assembly where owner-customers elected from among them the Representative Assembly for their own bank for four years. A total of almost 2,400 members were elected to the Assemblies. The number of candidates totalled over 5,600.

 

OP launched the OP Crowdfunding service

OP Crowdfunding’s first investment project involved the small ice cream factory Suominen's Milk Ltd which sought capital for growth and to start exporting its organic ice cream, Jymy. OP’s second crowdfunding project with the Nokia-based clothing manufacturer Papu Design began in December 2017.

 

New mobility services

Mobility services increased as OP introduced DriveNow car sharing charged by the minute, in Helsinki, and OP Flexible Car providing rental cars for a month or a longer period, offered nationwide. In May 2017, OP also announced it will build with Fortum almost 100 charging stations for electric cars in Finland.

 

OP joined the Commitment 2050 programme

OP joined the national commitment on sustainable development, ”The Finland We Want by 2050”. The purpose of this commitment is to promote sustainable development everywhere in our society. OP is committed to promoting competence development in Finland as the country is undergoing a transformation of employment.

 

New ownership policy and engagement

OP Fund Management Company revised its ownership policy concerning Finnish and foreign companies in autumn 2017. The new policy will take better into account responsibility viewpoints, such as preparation for climate change and sustainability. As a result of the new policy, OP funds will also attend the AGMs of global companies. The first OP funds began to vote in AGMs outside Finland in autumn 2017. OP funds are committed to increasing their voting activity within three years with the aim of participating in thousands of AGMs abroad every year. OP Fund Management Company's ownership policy defines how OP funds exercise influence in AGMs.

 

Thematic engagement projects on carbon, water and tax risks

In the first half of 2017, OP launched thematic engagement projects on carbon, water and tax risks. Furthermore, in the second half of the year, we joined Climate Action 100+, a global five-year engagement initiative for investors. OP Wealth Management joined three thematic corporate engagement projects.

 

The first fund-specific ESG analyses were published

In July 2017, we began to publish fund-specific environmental, social and governance (ESG) analyses. In future, we will publish these analyses on a quarterly basis. The analyses include responsibility ratings for companies in the funds’ portfolios. The analyses comprise environmental (E), social (S) and governance-related (G) issues. The fund-specific analyses also include information on the companies’ carbon footprints and positive environmental impact.