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.