The banking industry is undergoing profound change. For example, digitalisation is radically changing client behaviour. Today’s clients are not just more demanding and better informed. They also wish to use all the important banking services independently of time and place on digital channels – with the same ease and user-friendly manner they are used to in other areas of life. Sustainability is also a megatrend to which financial institutions must find an answer. However, it is not only about creating sustainable value for the company through a long-term perspective. Rather, a financial institution must anchor sustainability in the investment or lending business, for example. In addition, the banking market is undergoing a consolidation trend and price pressure is increasing, while new regulations are increasing complexity. Finally, the market entry of providers from outside the sector, such as fintechs, is intensifying competition and putting pressure on banks to differentiate themselves effectively.
Group BKB also faces the challenge of further developing its business model in this dynamic environment and adapting it to the future. With the Group Strategy 2018–2021, defined by the Bank Council together with the executive boards of both banks, the Group is responding to constantly changing client needs. At the same time, it is setting itself ambitious growth targets in the traditional earnings pillars of interest business, commission and service business and trading business. However, the development of innovative new business models is also central. Keen Innovation AG plays an important role in this. This wholly owned subsidiary of BKB has the task of testing and developing new products, solutions and business models.
The Group Strategy 2018–2021 contains five strategic thrusts: ‘Exciting our clients’, ‘Unlocking new client groups’, ‘Strengthening our ability to innovate’, ‘Increasing efficiency’ and ‘Supporting sustainability’. Strategic objectives and concrete implementation measures have been defined for each of the strategic objectives. Progress is reviewed on a quarterly basis through comprehensive reporting.
2020 marked the third year of strategy implementation. The COVID-19 pandemic has not noticeably hindered project work. Implementation of the 50 or so current subprojects continued according to plan. The various work packages were reprioritised last year. In 2021, financial and human resources will be concentrated on projects that can be completed by the end of the strategy period. In mid-2020, the Executive Boards of both banks, the Bank Council and the project team also began developing the Group Strategy for the strategy period 2022–2025.
Group BKB reacts to the COVID-19 pandemic
Basler Kantonalbank and Bank Cler continued to provide close support to their clients during the COVID-19 crisis. Branches always remained open during the first lockdown in March 2020. However, telephone conferences and video consultations were also used to be close to clients. As part of cantonal and national COVID-19 support programmes, more than 1,500 credit limits amounting to some CHF 160 million were granted. Thanks to the unbureaucratic and quick examination of the applications, BKB and Bank Cler were able to prevent liquidity bottlenecks for the industrial sector. Since December 2020, BKB has been participating in a programme run by the Canton of Basel-Stadt to provide targeted support for technology start-ups. Another focus was the Support Your Locals campaign, which BKB supported with a magazine and a large competition. More than 20,000 participants took part in the draw for gift vouchers from Pro Innerstadt worth a total of CHF 145,000.
Structured development dialogue introduced
Basler Kantonalbank and Bank Cler aim to be attractive employers. The promotion of employees is therefore also a focus of the HR strategy. A structured development dialogue was introduced in 2020. As part of this dialogue, managers regularly discuss with each employee the situation in their current job as well as the employee’s ideas for their further development path. Special skills, possible areas of development and professional goals are also included in this discussion. In an open exchange between managers and employees, the cornerstones for further development are defined and measures such as training or further education are derived from this. In 2020, managers were trained for the development dialogue and the necessary framework conditions were defined. These efforts were rewarded in the 2020 employee survey: In areas such as personal prospects and development dialogue, employees attest that the Bank has made ‘significant progress’.
Zak now with online onboarding
Bank Cler launched Zak in 2018. Today, the user-friendly app is one of the leading neobanks in Switzerland with over 40,000 users. The range of services offered by the app was further expanded in 2020. A new onboarding process makes it possible to open an account around the clock and in just a matter of minutes. The identification of the new client is fully automated through a comparison of the scanned ID and a selfie. Previously, a video call was necessary for successful identification. Online onboarding is even easier, faster and more client-friendly. This means that a Zak account can now also be opened spontaneously outside the Bank’s own service hours.
Sustainable investments exceeded the billion mark in 2020
Basler Kantonalbank consistently focuses on sustainability in its asset management. The Sustainable investment solution was introduced in 2017, and since 2019 BKB has offered its clients the sustainable variant as standard in asset management. In 2020, the sustainable asset management mandates and investment solutions exceeded the billion mark for the first time with a volume totalling CHF 1.1 billion. This corresponds to growth of 51.2% on the previous year. This development confirms that sustainable investing meets a real need among clients. It is also becoming increasingly important for investors to have transparency about their portfolios. They want to know whether there are possible sustainability risks hidden in them and what their impact is. To advise private clients and institutional investors, BKB therefore introduced a new ESG/CO₂ reporting tool in 2020. Climate risks can also be made visible by showing the carbon footprint.
BKB and Bank Cler introduce SARON mortgage
In July 2020, BKB and Bank Cler launched the SARON mortgage. It is based on the new reference interest rate SARON and replaces the previous LIBOR mortgage. While LIBOR is based almost exclusively on expert estimates, SARON is based on actual transactions and prices in the money market. SARON is also an overnight rate, whereas LIBOR is calculated for a longer period. For those who want to keep their finger on the pulse of the money market and also benefit from lower interest rates, the SARON mortgage offers flexible financing for real estate. To avoid a daily interest calculation, the compound SARON for an interest period of three months is formed from the individual SARON interest rates at the end of each quarter.
New SEM strategy defined
More than 99% of Swiss companies are considered small to medium-sized enterprises according to the figures from the Federal Statistical Office for 2020. As many SMEs as there are, their needs are just as varied. This makes it all the more important to have a reliable contact person. Many SME clients in Northwestern Switzerland already count on BKB. In 2020, BKB established a separate department for SME clients, based on a new SME strategy. The strategy is derived from BKB’s performance mandate and defines a clear profile in the SME business. Client needs are placed even more strongly at the center of the advisory services. SME clients benefit from the high level of expertise of the advisory team and the Bank’s local network of contacts. Client loyalty is intensified with other BKB competencies, such as trading or transactional consulting. This means that SME clients have a reliable partner at their side throughout the entire life cycle.
Keen Innovation AG: Innovative projects launched
Testing and developing new business models: That is the task of Keen Innovation AG, a wholly owned subsidiary of Basler Kantonalbank. The agile innovation accelerator headed by Thomas Leber started operations in 2019. In 2020, a number of projects were successfully launched.
During the lockdown in spring, many SMEs were affected by the closures, some of which did not yet have an online offering. To accelerate the digitalisation of these companies, Keen Innovation AG developed and implemented the Hamsterli.ch platform in record time. On this platform, SMEs can open an online shop easily, quickly and free of charge and, for example, sell vouchers after just a few clicks. Since April 2020, over 800 SMEs have taken their first e-commerce steps on Hamsterli.ch.
Keen focuses on the needs of new target groups for the Group. Those moving to Switzerland from abroad often face major challenges with the complexity of banking and financial issues. To make it easier for newcomers to get started in our country, two innovative new platforms have been developed and tested. Taxjungle.ch offers a complete and graphically prepared overview of the tax burden in all Swiss municipalities after entering a few pieces of information. Hyppo.ch calculates the maximum cost of a condominium or a single-family house on the basis of household income. Both platforms are already used by several hundred visitors a day.