Smarter banking service wherever you go
We want our customers to be able to tend to all their banking business anywhere and anytime. In 2022, we continued to introduce new features in the app and online banking, made Aukakrónur available on phones and launched the instantly popular Save in App. We also continued to strengthen our core systems, as progress and development must be built on solid technological foundations.
Contactless payments for everybody
We pioneered solutions that allowed our customers to link their payment cards to Apple Pay and, in 2022, we added Google Pay. Google Pay is a quick, easy and secure payment method for Androids which customers can use to pay with their phones in shops and online.
Customers can register all their cards, both debit, credit, Aukakrónur and Landsbankinn gift cards, to their phone or watch and begin making contactless payment. No additional fees apply and the payment method is very secure.
Payment with smart devices has grown increasingly popular in recent years. In 2022, 39.5% of card payments at point of sale were made using phones or watches, which is an 18% increase between years.
We added several new features to the app to simplify life for our customers. One of these features allows parents and legal guardians to create accounts for their children in the app and automatically have read access to the accounts of children under 18 years of age.
Better securities platform in the app and online banking
Our customers can now easily trade on the main market of Nasdaq OMX Iceland as well as the First North market using the app and online banking. It's also possible to trade in all Landsbréf funds, including funds that invest in international securities. Customers can subscribe to Landsbréf funds, monitor their portfolios, carry our comparisons and get a clear summary of their securities assets and transaction history. The app also allows customers to view information about their balance, rights and transaction statements from pension fund Íslenski lífeyrissjóðurinn. Succinctly put - all information about savings and investment can be accessed in one place.
More information is provided in the chapter on asset management & capital markets.
Aukakrónur in the phone an instant hit
One of the winning features we launched this year was Aukakrónur in the phone. As of November, customers could access their Aukakrónur card in Landsbankinn’s app and easily copy it to their mobile wallets. Now the phone can be used to pay with Aukakrónur just like all other Landsbankinn cards. Customers can also view their Aukakrónur balance in the app and see the full card number to use in online shopping. This feature was launched toward the end of the year and became an instant hit, boosting use of Aukakrónur by 22% between years. This is yet another example of customers appreciating and quickly taking into use solutions that simplify their lives.
Electronic registration saves time and effort
In 2022, Landsbankinn became the first bank to offer customers electronic registration of documents in the refinancing process for housing mortgages. This was an extensive and complex undertaking which has been in the works since 2019 in good collaboration with the District Commissioners’ offices and others.
The outcome is that our customers can now refinance their mortgage, finalise all documents and have the Bank handle public registration electronically. There is no longer any need to visit a District Commissioner for public registration. This cut down wait time and loans can now be processed in a matter of minutes, saving valuable time for our customers. Around 30% of refinanced housing mortgages in the year were registered electronically and we expect all mortgages to be registered electronically in the future.
Last fall, we began electronic registration of vehicle loans which has also been a success. Our goal is to make life simpler for our customers and electronic public registration certainly helps.
Strong customer authentication powerful defence against fraud
New rules on so-called strong customer authentication (SCA) have entered into force, introducing more stringent requirements for the log-in process and verification of payments. The purpose of SCA is to enhance security in all payment activity. Customers are now asked to log in and verify payments using SCA that includes biometrics, electronic ID and the Auðkenni app.
Flexible and safe service
Complying with the new rules is a huge software challenge for all banks. The scope of the project means that our customers are not exposed to the changes overnight; rather, the changes are implemented in stages over a longer period. Changes were made to the log-in process for Landsbankinn online banking and the app in spring 2022 and we began making changes to payment verification in fall 2022.
11,000 businesses use Landsbankinn's app
Our customers have always been quick to take digital solutions into use and are excited to try out new features. Around 11,000 businesses have used Landsbankinn’s app and over 6,000 corporate customers do so frequently each month. The number of available features in the app grew significantly each month all throughout 2022 and we see a concomitant contraction in the use of online banking, mainly from smaller enterprises and the self-employed. Counting B2B services, around 98% of the daily banking business of corporate customers now depends on self-service solutions.
Use of Landsbankinn's app by corporate customers grew by 123% in 2022. The app is bursting with features and solutions that simplify daily operation and save time and effort for everyone involved.
Switching between corporate and personal accounts is easy in the app, as is creating bank accounts, debit cards, credit cards and procurement cards, trading in equities and funds, in addition to numerous other features and useful summaries.
Growing number of customers create claims
The number of claim issuers grew by 9.2% between years. This growth is driven by new business relationships but also represents recent development and revitalisation of several sectors in the post-pandemic era. In 2022, customers issued over 13 million claims in online banking and the app - a record.
Use of a self-service solution to create collection agreements is up by 22 percentage points between years and is now 56.4%.
As in previous years, the majority of our customers handle collection activity independently, or over 99%. This includes the creation of claims for collection, alterations to claims, further collection and cancellation of claims. Similarly, most claims are paid using self-service channels.
A third of direct debit agreements created in self service
Since 2019, corporate customers have been able to create direct debit agreements on behalf of payors, so that payors do not need to do so themselves in online banking or at a local branch. The change significantly lowers the administration cost for customers and improves service for both our customers and their customers down the line. The service gives Landsbankinn a competitive edge and use of the self-service solution grew by 31.3% in the year.
Cross-border payments never more numerous
Corporate cross-border payments grew by 12.3% between years and 96.5% of such payments were carried out using self-service channels. This increase accords with figures from Statistics Iceland on growing import activity, in addition to the fact that payor numbers grew by 10.6% in the year, including new customer relationships.
In March 2022, trade sanctions were enacted against Russian banks in response to the war on Ukraine. These sanctions impact Icelandic business transactions but little, as their transactions with the banks in question are generally limited.
Most companies manage their own product selection
In corporate online banking, customers can purchase products and download free add-ons for both online banking and the app. Nowadays, most businesses use these options to add online banking users, bank accounts and payment cards, to align the banking service with their own activity and fine-tune employee access rights to fit duties and responsibilities.
Customers mainly carry out these actions independently, or in over 75% of cases. The increase in 2022 shows that customers appreciate being able to carry these tasks out at any time of the day, whenever it suits their needs.
Increase in self-service
Most agreements signed electronically
Customer demands from financial services have changed dramatically. Most customers wish to increase use of the Bank’s self-service channels and have easier access in as many ways as possible. The signing of agreements is one of the best examples of this development, as nearly 70% of all agreements with customers are currently signed electronically.
Headway in the battle against cyberfraud
Our customers should be able to tend to all their banking business anywhere and anytime. To make this possible, Landsbankinn operates several security systems and employs a team of cybersecurity experts that collaborate actively with other specialists and banks around the world. We have published numerous announcements and articles with warnings, instructions and information to both the public and companies.
Experience shows that information and education is key in the battle against cyberfraud - the successes achieved are built mostly on improved awareness and responses by society as a whole.
We will continue our efforts to inform and educate and contribute to raising awareness in the community. We will also continue our effective use of automatic risk analysis, fraud analysis, pattern analysis, watch lists, sanction screening and various other measures against cyberfraud and money laundering.
Successful phasing out of RB mainframe computer
On-going investment in the Bank’s technical infrastructure is not always readily apparent to customers. A robust infrastructure is the foundation for any offering of new services and makes the technical environment both safer and more stable.
One of the largest software undertakings in recent years was the deployment of a new deposit and payment system from Sopra Banking Software in collaboration with the Icelandic Banks' Data Centre (RB) towards the end of 2017. Landsbankinn was the first domestic bank to implement the system. Once all RB customers had implemented the Sopra system, which was not completed until in 2022, it became possible to simplify RB's infrastructure even further and enter into new collaboration with the company’s customers, including Landsbankinn.
RB’s older system structure was based on a mainframe computer. With Sopra, banks and savings banks no longer had to rely on the mainframe. This required dedicated uplinks to RB that carried additional cost. The new Sopra system is not based on the use of a mainframe computer, meaning that in the period since Sopra was first implemented, RB operated a double system, the old system that required dedicated uplinks to the mainframe computer and the new environment that was connected to Sopra. An agreement providing for the phasing out of the mainframe computer between RB and its customers and partners in 2022 was an important milestone.
The project is divided into several phases. RB needed to phase out or update its systems that relied on the mainframe and RB’s customers had to adapt their systems to utilise RB’s new technical infrastructure. For Landsbankinn, the largest projects involved the transfer of debit card issuance and their authorisation system, changes to ATM software and updates to those of the Bank’s systems that still relied on older RB infrastructure in order to take the new generation of technical systems into use. The file exchange system used to retrieve data from RB was phased out and replaced with data and service squares. This required renewal of a large part of the back end of the collection system, as well as changes to payment systems.
This phase was completed for the most part towards the end of 2022 and is scheduled to be completely finalised in the first quarter of 2023. This is expected to lead to increased efficiency and improve RB services with more modern technological solutions that are easier to operate and develop.
Simplification of technological environment
Alongside digital development and increased selection of self-service solutions, Landsbankinn has worked on housekeeping and simplification of its own technology.
The Bank has in recent years focused on simplifying its technological environment by updating systems and culling solutions that are getting little use or have changed to allow for streamlining. There is also constant work on natural renewal of hardware and on ensuring that the hardware used by the Bank is supported by producers and updated regularly.
The Bank’s databases have been simplified and effort has been made to reduce service environments and modernise the interfaces of solutions used by the Bank’s customers, such as the app and online banking, but also of the systems employees use in their work.
This enhances the Bank’s flexibility and allows us to respond faster to changing needs as well as to offer new service solutions. Modernising systems and technology also helps the Bank attract personnel with knowledge of modern technology.