Operating environment









Financial sector in the face of major transformation

The financial sector is facing a major and fast digital transformation. In 2018, regulation will result in ever-increasing competition and open up banks’ customer data to third parties. New competitors from non-financial industries are entering the sector.

With intensifying and globalising competition, customers are demanding from Finnish players as smooth and easy service experience as they are accustomed when using the services provided by the best-of-breed international firms. OP no longer competes with traditional banks and insurance companies; financial services are also being provided by international technology giants and new players in the sector.

As customers are faced with a growing number of options and switching a service provider is easy, they require financially smarter and more proactive service – 24/7. Customers and other stakeholder groups also expect companies to demonstrate more transparency and responsibility by emphasising their own values in making choices.

The financial sector is also challenged by large-scale social changes in the operating environment, which involves, for example, ageing population and transformation in the employment landscape. Transition from ownership to the right of possession is challenging a number of traditional practices in the financial sector.The financial sector has potential in finding new sources of growth in a role of safeguarding prosperity, providing healthcare services and creating new economic activity.

The underlying megatrends and phenomena are intertwined in a diverse way. OP monitors proactively changes in the operating environment and seeks growth opportunities in the transforming financial landscape according to its strategy. We aim to rise to the challenges presented by the operating environment and to seize the opportunities it provides.





OP Financial Group's strategy


OP Financial Group's strategy – reinventing business for the benefit of customers

OP Financial Group’s strategy is based on utilising the potential provided by the transformation in the operating environment to boldly modernise business and services for the benefit of our owners and customers. Our aim is to gradually change from a financial services group to a diversified services company of a digital era with strong financial services expertise.

We create value for our owners by modernising our existing businesses and by developing brand new customer-focused service packages and new innovative services. We will branch out into businesses that we find natural and where it enhances customer experience while creating significant synergies relative to our existing businesses.

We will innovate and develop services together with our customers and the best partners in the world. We will exploit the latest technologies, customer insight based on extensive research data and close interaction as well as the best development and design expertise in the sector. At the same time, we will in an exemplary manner bear responsibility for the reliability of our basic services and their nationwide availability as well as for the stability of the financing system and the functioning of the insurance system.

Customer ownership guides our operations

Based on our mission, we create sustainable prosperity, security and wellbeing for our owner-customers and in our operating region by means of our strong capital base and efficiency. A People-first Approach, Responsibility, and Prospering Together form the basis of our operations. Based on our customer promise “We exist to serve our customers”, customer interests guide all we do. Our customers own us and can have their say in our decisions and the development of our activities. Moreover, a considerable part of business earnings are returned to our owner-customers.

In our development activities, we specifically focus on areas that create significant, new customer value and benefit for the society around us. We can also flexibly move from a producer to a service integrator if this is how we can reach the targeted benefits for customers faster and more securely.

Financial services to be modernised through large-scale projects

We provide our customers with the most diversified package of service channels available in the market that involves the most extensive branch network in Finland, flexible telephone services, advanced online and mobile services and an extensive network of external partners. In addition, we are also building completely new digital business models and services for Banking, Non-life Insurance and Wealth Management to respond to greater demand and the threat of new competition.

OP Financial Group annually invests more than 400 million euros in the development of new products and services and in technology modernisation. Currently, roughly 95% of this goes to the further development of the existing businesses, or financial services, and about 5% to new businesses.

The 2017 highlights in financial services modernisation included developing digital services, digitising and automating business processes, making service processes faster and smoother as well as upgrading a number of key technology platforms and basic systems.

Customer-focused service packages represent a breakaway from the conventional approach

As customer behaviour changes at an accelerating pace, financial-sector solutions do not meet customers’ true needs in all respects. This means that the risk of losing customer trust and loyalty is apparent. Transition from a traditional product-focused philosophy to a customer-focused design approach is at the core of OP Financial Group’s strategic renewal, where in-depth customer insight and ongoing operational improvement in close dialogue with customers form the basis for all development work.

The new philosophy at the strategic level is crystallised in customer-focused service packages that the Group has defined to be four thus far: Housing-related Services, Mobility Services, Health and Wellbeing, and Management of Finances. The purpose of the service packages is to help identify new potential growth areas while directing the development of the existing businesses that pleases customers and coordinating development to enable synergies. Among the above service concepts involving areas new to OP, the most advanced are Health and Wellbeing, and Mobility Services.



Good strategy implementation on a wide front

The greatest achievements made so far during the strategy period include strong financial performance, strongly improved corporate image and customer experience, numerous new and significant initiatives by businesses and the early-stage success of hospital business, strong growth in the use of mobile services and success of back-office centralisation.

Meanwhile, the greatest challenges are associated with the implementation of the efficiency programme schedule, delays in some major basic information projects, development work agility and productivity, as well as competence update required for business transformation.

When reviewing strategy implementation through strategic indicators (see table below), OP Financial Group has lagged behind several key strategic targets but strategic achievements have proved good considering the wide scope of the strategy. The greatest deviations relate to the strategy period targets set for cost development and the number of owner-customers.

OP Financial Group’s strategic targets

  31 Dec. 2017 Target 2019
Customer experience, NPS (-100–+100)    
Brand 21.5 25
Service 58 70, over time 90
CET1 ratio, % 20.1 22
Return on economic capital, % (12-month rolling) 21.3 22
Expenses of present-day business (12-month rolling), € million 1,661 Expenses for 2020 at 2015 level (1,500)
Owner-customers, million 1.8 2.1 (2019)

Dedicated and proactive efforts to update competencies

OP Financial Group has recognised that the financial sector now amid transformation and the Group’s own business reinvention will require enormous competence updates promptly in the next few years. In response to this, the Group has started to create an unparalleled proactive Competence update model with a view to preparing for transformation in employment ahead of us. With the operating model, we want to act responsibly based on our values, to enhance the labour market value of an individual employee and to find new, unconventional models for creating job opportunities and updating competencies. The model will particularly be used to support employees whose job will change considerably or be automated. Through personal support, we aim to find training opportunities and new jobs for people either within the Group or outside of the Group.






Value creation


Value creation

As a cooperative Group, our operations have a wide effect on various stakeholder groups in Finland, both on a local and nationwide basis. Our operations are guided by our dual role – business role and social role. Our overall success is measured against how we succeed in both roles.






Value chain


OP as part of society

OP influences society on a wide front through its operations. The financial sector plays a key role in economic prosperity both directly and indirectly. We provide necessary basic services and business opportunities for citizens, companies and organisations.

In the social role, we promote the long-term success and prosperity of the community by representing a positive driver in the operating region. The social role involves impactful actions for the benefit of the community at both local and national level. 

We seek superior customer experience that we provide in all service encounters – in both face to face and digitally. Customer experience and its ongoing improvement is one of our most important targets, which is measured using a customer experience indicator. We seek to provide the best multichannel customer experience in the sector by creating ongoing and relevant encounters in all channels.

We take account of risk management, data security and responsibility aspects at all stages of our value chain. OP’s centralised procurement is in charge of procuring the most important products and services within the Group. We expect product suppliers and service providers to conform with OP’s Corporate Social Responsibility supplier requirements, OP Financial Group’s General Procurement Terms and Conditions, Code of Business Ethics and any applicable legislation and international agreements.

OP is strongly committed to its customers and operating environment. We foster a sustainable economy, for example, by providing local business with financing. OP has a local impact across Finland, as the Group’s branch and service network is the most extensive and has the best coverage in Finland. Moreover, OP’s economic impacts also involves indirect impacts on local and regional economic vitality.