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Better Banking

Landsbankinn was ranked highest by banking customers in the Icelandic Performance Satisfaction Index 2019. During the year, Landsbankinn presented several innovative digital service solutions to both private individuals and companies. Customer satisfaction is an encouragement to strive to develop even better services and to improve across the board.

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Landsbankinn has focused on the development and creation of digital solutions. Special emphasis was placed on digital payment methods and automatization of applications for short-term loans for private persons. Apple Pay was extremely well received and there is growing use of all self-service solutions offered by the Bank.

Leader in digital solutions

The Icelandic Performance Satisfaction Index, which Landsbankinn topped in the banking sector, is based on a survey carried out in the latter part of 2019 and measures overall customer satisfaction. In July, international financial magazine Euromoney selected Landsbankinn as the best bank in Iceland. In addition to remarking on Landsbankinn’s surpassing position in Iceland, especially as regards efficiency and profitability, the magazine mentioned Landsbankinn’s focus on offering products and systems that make it a leader in digital solutions in the Icelandic banking sector.

Focus on the development and creation of digital solutions

Landsbankinn focuses on the development and creation of digital solutions. Use of the Bank’s self-service solutions is high and growing and Gallup surveys show that customers are very satisfied with the service. During the development of new digital solutions, the focus is on ensuring accessibility and promptness of use.

Use of mobile solutions top online banking

Banking services are undergoing rapid change and it is telling that Landsbankinn’s solutions for mobiles, i.e. the app and are now more frequently used by retail customers than is online banking. This trend is likely to continue, with an increasing number of customers choosing to tend to banking business through their mobiles. Since the launch of Landsbankinn’s app in 2018, it has received numerous updates and several new features have been added. The app was well received by customers and was selected App of the Year 2019 at the Icelandic Web Awards. Online banking for individuals also undergoes continuous development and a Gallup survey showed that 94% of customers are satisfied with the service.

Since February 2019, customers have been able to use the Landsbankinn app to apply for and adjust the overdraft authorisation on current accounts and alter the withdrawal limit on credit cards. Customers can also apply for credit cards in the app or online banking and begin using the card at once, that is, the electronic version thereof.

Such self-service of credit products is based on an automated credit framework calculated for all customers who own current accounts with the Bank. The credit framework is accessible through the app and shows the customer’s authorisation for self-service linked to credit products. The authorisation is smoothed across credit card limits, overdraft and other short-term loans. Customers see immediately how much scope they have in self-service. Customers who wish to apply for short-term loans that exceed the limits set by the automatic credit framework can contact the Bank and apply for a higher credit limit.

Customers satisfied with service

Self-service limits on credit cards*
*Landsbankinn first offered customers the option of adjusting their credit card limit via self-service solution in December 2018..

API marketplace and A2A payment solution

In early 2019, Landsbankinn launched an API marketplace. Launching the marketplace was an important step towards open banking, provided for in a recent EU Directive, PSD2. The Directive has not been transposed into Icelandic law but will involve considerable changes to the banking practices of customers in the future.

Open banking technology is based on application programming interfaces, or APIs. Landsbankinn’s API marketplace grants fintech entities access to information from the Bank’s systems which can be used to develop new financial service solutions.

Initially, information accessible via the API marketplace included currencies, interest rates and the price tariff, with the first Icelandic A2A payment solution being added in July. Landsbankinn’s A2A payment solution allows fintechs to enable customers to make payment direct from their accounts without utilising any of the Bank’s other solutions, such as the Landsbankinn app, online banking or payment cards.

Landsbankinn’s A2A payment solution is a forerunner of the payment solutions provided for by PSD2 and is based on the requirements of the Directive. Landsbankinn was the first domestic bank to offer an A2A payment solution and remains the only bank to do so. The Bank intends to continue to lead in the development of open banking.

Standardised functionality puts Icelandic tech infrastructure on a par with international standards

In December, Landsbankinn, Arion Bank and Íslandsbanki agreed on technical standards for coming legislation on payment services based on the EU’s PSD2 directive. This is a wide-reaching project led by Landsbankinn under the auspices of Icelandic Standards (IST), with participants from financial undertakings, software companies and other stakeholders. The aim of the project is to determine the ways and means by which Icelandic banks design and develop API products related to the implementation of PSD2. 

Banks in many parts of the world are undergoing significant changes driven by technological advances referred to as open banking. Ensuring standardisation of the banks’ technological infrastructure fosters innovation and competition and puts Iceland on a par with international standards. This allows both domestic and foreign banks and fintechs to enter the Icelandic banking market without adapting to a specifically Icelandic tech environment

Strong development of technical infrastructure

The Bank’s infrastructure has undergone significant development and changes in recent years and the focus has been on quality, efficiency, accessibility, security and automatisation of solutions and operations. The API marketplace launched in 2019 is part of this development and use of API based services in the Bank’s operation has increased.

In 2019, the technological operating platform of Landsbankinn’s software solutions was defined and the decision made to use a container orchestration platform. This will allow the Bank to achieve increased efficiency in hardware use, boost security in its operation, and increase standardisation and automatisation. This part of the Bank’s software will be compatible with cloud solutions. New methodology for the integration and delivery of data has been in the process of implementation by the Bank. It is based on the so-called virtualisation of data which facilitates access to and use of data from the Bank’s operation. It is important to the Bank to utilise data both for in-house operation and for the benefit of customers. The Bank considers data to be a valuable resource and foundation of risk management, decision making, strategising and business development.

Designing new work processes to correspond to new technology and altered work procedures is part and parcel of the development of technological infrastructure. Numerous employees are involved in this work and a great deal has been achieved in developing and improving processes and rules in line with guidelines and instruction on the operation of IT systems. The Bank complies with information security standard ISO27001 and was certified as compliant with the standard in 2019.

  • The future of fintech is bright in open banking. The collaboration of banks and companies can make banking service more varied and accessible.

Umræðan: Open banking**In Icelandic
Self-service international payments

Foreign transfers in the Landsbankinn app

As of February 2019, customers have been able to conduct foreign transfers through the app. In December 2019, over 90% of all foreign transfers by private persons were carried out by customers through the Bank’s online solutions, with 30% using the app and 70% online banking, where the feature was introduced in 2018. Previously, customers would have to call the Customer Service Centre or visit a branch to make international payments.

Credit card application in the app

In March 2019, customers were given access to a feature that allows them to apply for credit cards and plus cards in Landsbankinn’s app. The credit card application process was simplified significantly and the product line streamlined. As soon as a credit card is created, its details appear in the app and the card can as a result be activated in Apple Pay or in Landsbankinn’s card app Kort immediately. This allows customers to begin using their new card almost immediately, as there is no need to wait for the physical card to arrive in the mail.

  • The Bank’s many Polish-speaking customers appreciate being able to receive banking services in their native tongue.

Umræðan: Banking services in Polish* *Article in Icelandic
Self-service credit card applications

Apple Pay

On 8 May 2019, Apple opened Apple Pay for use in Iceland and Landsbankinn simultaneously granted customers’ access to the feature. In so doing, Landsbankinn became the first Icelandic bank to offer payment solutions for all types of mobile phones. Reception was good and it was obvious that many Apple users had been impatient to get access to this feature. The solution is very convenient, allowing Apple users to pay with Apple devices such as iPhones, iPads, Apple Watches and Apple computers, in the same way as with payment cards.

The decision to open Apple Pay to Icelandic customers was completely controlled by Apple. Considerable preparations were required by Landsbankinn to allow the Bank’s customers to connect to the feature.

Landsbankinn had secretly been working to launch this payment method for several weeks and many were surprised, both domestically and abroad, that Apple should launch this feature in Iceland before countries such as the Netherlands and Portugal.

Emphasis was placed on allowing customers to register their cards with Apple Pay directly from the Landsbankinn app, to maximise the ease with which customers can utilise this new payment solution.

Customer reception was very positive and in the beginning, around 700 individuals registered with Apple Pay per day, with over 13,000 registering in the first month. In 2019, 42,000 devices were registered.

During the first two hours after the launch of Apple Pay, eight customers activated the feature in their phones every minute. During the first five days of access to Apple Pay, one customer activated Apple Pay every minute, around the clock.

Credit card information consolidated in one place

Alongside the launch of Apple Pay in May 2019, Landsbankinn updated customers’ payment card view in the app. The app now provides a comprehensive overview of all credit and debit cards in one place and all features can be accessed there. Customers can also enter Landsbankinn gift card details and save them to the app to have constant access to the balance and movement of gift cards, all in the same place.

The Landsbankinn app provides access to payment card details anytime, anywhere, i.e. card numbers, CVV codes and validity periods. Card numbers can easily be copied and pasted to, for example, the payment forms of online shops.

Also in the same place, notifications and monitoring of payment cards can be adjusted, with the option to receive text messages when certain transactions take place. This allows customers to stay up to date about the use and balance of payment cards.

Payment with FitBit and Garmin watches

As of early November 2019, customers have the option of linking Landsbankinn debit and credit cards to smartwatches from Garmin and FitBit. The Bank’s customers can use Garmin Pay and FitBit Pay to pay with their smartwatches in contactless card readers throughout the world. This is in addition to other contactless payment methods using mobiles with the card app (Android) and Apple Pay (iPhone/iWatch).

Visits to online banking, Landsbankinn's app and 2019

Sign agreement for securities trading with electronic ID

In May 2019, a new feature was introduced, allowing customers to sign agreements for securities trading with electronic ID in online banking and in the Landsbankinn app. Access to securities trading with Landsbankinn has improved as a result. At year-end, around 60% of new agreements were concluded online and there was a 25% increase in new agreements.

Securities in the app

Since March 2019, customers have been able to view their asset portfolio in Landsbankinn’s app. The overview provides easy access to market value, profit/loss, nominal returns, and realised and unrealised profit for a given period. The data is both graphic and tabulated, showing asset breakdown, number of shares, rates and historical development. The data is also presented on a timeline that is adjustable and can show everything from intraday changes to changes spanning 5 years. Customers can also view the equity market in the app and an overview of Landsbréf's funds is pending.

Automatic credit assessments

Landsbankinn began offering automatic credit assessments for housing loans on its website in February 2018. This feature has been popular since the beginning and use of it has continued to increase in 2019. The automatic credit assessment allows customers to quickly gain an understanding of their payment capacity and borrowing ability. Customers can then submit an electronic housing loan application with a convenient credit composition.

Automatic credit assessments

Landsbankinn places strong emphasis on offering corporate customers the best financial services available. Companies desire good access to digital banking services and the Bank emphasises providing robust and reliable online banking, as well as suitable self-service solutions for corporates. Numerous new digital service solutions for companies were introduced in 2019. 

Statements issued to companies were improved in various ways, log-in procedures simplified and various services that previously required a visit to the Bank were made electronic.

In January, dedicated annual and monthly statements were made available for money market deposits in online banking. Also in January, customers were presented with the option of using electronic ID to log in to online banking. Customers with access to several companies select which company’s online bank to log in to from a menu that appears during the log-in process.

More use of electronic signatures

In spring, lawyers and real estate and vessel agents were offered FX custody accounts. Customers were also given the option of sending electronically signed applications for collection services to the Bank. Soon, more applications will come with the option to sign electronically.

B2B, or Bank to Business, is an add-on to corporate online banking that enables data sharing between the Bank and a company’s accounting software. B2B service is undergoing constant development and is increasingly used by more and more customers. Since 2018, the lion’s share of B2B features are an automatic part of customers’ accounting systems, sending many queries and completing functions directly through the Bank’s systems.

Companies were presented with the option of creating direct debit agreements on behalf of payors, so that payors do not need to do so themselves in online banking or a local branch. The owner of the account for debit receives notification about the creation of a direct debit agreement through online banking. These services are all unique to Landsbankinn in the domestic market and are contingent upon the payor owning an account with the Bank.

Semi-automatic overdraft extension

In fall, the feature semi-automatic extension of company overdraft authorisations was introduced. The feature allows for the extension of overdraft authorisations, provided certain conditions are met, and is an important step towards the automatisation of lending decisions for companies.

Services to larger employers were improved through the removal of size restrictions on payroll batches uploaded to corporate online banking.

Companies were also offered the option of drawing on business contracts via online banking, i.e. credit lines and project loans. Various improvements and multiple technological changes were made to the deposit process, cash withdrawal and reconciliation. Customer deposits are now automatically credited to accounts and customers can use a new site to order withdrawals and deposits, both in foreign currency and ISK.

Corporate online banking tailored to different needs

Customer reception of the various innovations in online banking in recent years has been very good and an increasing number of companies manage access to online banking independently. The benefits are manifold, with options to control action and read authorisations, determine which individuals can see specific actions, assign new passwords and various other details.

Utilising the full spectrum of access authorisations takes advantage of the flexibility of online banking to reflect the different roles of company employees.

Proliferation of functions for companies through B2B
Number of self-service functions
Over a 5-year period (2015-2019), self-service functions available to companies increased by 51%.

Cyber security taken extremely seriously

Landsbankinn takes cyber security extremely seriously and participates in various collaborations with organisations and institutions in the field, both in Iceland and abroad. The Bank’s experts are active participants in debate about these issues and continued to produce accessible educational material published to Umræðan and to social media in 2019.

In 2019, the Bank’s cyber security experts participated in around 30 events on cyber security, including conferences and morning meetings, and hosted educational events for companies. Over 200 individuals attended the Bank’s information session on cyber security in October 2019. At the session, Landsbankinn’s cyber security managers discussed how to identify attempts at fraud, the methods companies can use to prevent financial loss from cybercrime and how Internet fraud has developed in recent months.

  • Numerous articles and videos on cyber security have been published on Umræðan

Umræðan: Cyber security (in Icelandic)