OP Corporate Bank plc
OP Cooperative
Stock Exchange Release
10 June 2016 at 9.00 am (EEST)
In its updated long-term strategy, OP Financial Group aims to become a diversified services company
The Supervisory Board of OP Financial Group's central cooperative has confirmed OP Financial Group's strategy and Group-level strategic goals.
According to the new strategy, OP Financial Group aims to gradually change from a plain financial services provider to a diversified services company of the digital era with strong financial services expertise. The strategy highlights customer experience enhancement by digitising services and processes. At the first stage, business diversification involves expanding, for example, the health and wellbeing business.
- This is a major strategic renewal amid the dramatic transformation underway that will change our present business models and practices, says Reijo Karhinen, President and Group Executive Chairman of OP Financial Group.
- We see digitisation and change in customer behaviour as a great opportunity for OP. When the operating environment changes, OP Financial Group must reinvent itself too.
Diversified services company of modern times
The underlying reason behind the updated strategy is the dramatic and fast digital transformation underway in the financial sector, which will constantly attract new market entrants. At the same time, digitisation provides an opportunity to improve customer experience, create new business and streamline the current processes.
In the years to come, OP intends to make health and wellbeing services its fourth business line alongside Banking, Non-life Insurance and Wealth Management.
- Our mission is to promote the sustainable prosperity, security and wellbeing of our owner-customers and in our operating region. Expanding health and wellbeing services is a natural part of implementing our mission and a major step on the way from a financial services provider towards a diversified services company, explains Reijo Karhinen.
Heavy investments in customer experience and service digitisation
OP will initiate a large-scale development programme aimed at speeding up the digitisation of Banking, Non-life and Wealth Management services. Annual development expenditure will increase to 300-400 million euros in the next few years, i.e. the amount for the next five years will total up to 2 billion euros.
- In the changing operating environment, only those actors will succeed that are able to reinvent themselves and thereby offer the best possible customer experience irrespective of time, place and service channel. A winning customer experience arises from collaboration between human interaction and technology, says Karhinen.
New customer experience indicator alongside financial targets
The Group has increased its capital adequacy and profitability targets (CET1 target 22% and economic capital return target 22%) and seeks to achieve a new level in business efficiency by, for example, digitising and automating processes (expenses in 2019 lower than in 2015).
The development investments required by upgrading and streamlining business will add to the Group's expenses and weaken Group profitability before the benefits from such investments are realised in terms of better financial indicators.
Alongside its financial targets, OP has set a higher target for the number of owner-customers (2.1 million) and a target based on customer experience that it will specify later in the autumn.
The financial targets and customer-related targets together form OP Financial Group's strategic targets at Group level.
Press conference on 10 June starting at noon
Reijo Karhinen, President and Group Executive Chairman, will present the strategy in a press conference on 10 June 2016 starting at noon. The venue for the press conference is OP's Vallila premises, Gebhardinaukio 1, Helsinki.
OP Corporate Bank plc
OP Cooperative
Carina Geber-Teir
Executive Vice President, Corporate Communications
For more information, please contact:
OP Communications, tel. +358 (0)50 523 9904, viestinta@op.fi
Distribution
NASDAQ Helsinki
LSE London Stock Exchange
SIX Swiss Exchange
Major media
op.fi and pohjola.com
OP Financial Group is Finland's largest financial services group whose mission is to create sustainable prosperity, security and wellbeing for its owner-customers and in its operating region by means of its strong capital base and efficiency. OP Financial Group consists of about 180 member cooperative banks, its central cooperative OP Cooperative, and the latter's subsidiaries and affiliates. The Group has a staff of 12,000 and 1.6 million owner-customers and 4.3 million customers. www.op.fi
OP Corporate Bank and OP Mortgage Bank are responsible for OP's funding in money and capital markets. As laid down in the applicable law, OP Corporate Bank, OP Mortgage Bank and their parent company OP Cooperative and other OP Financial Group member credit institutions are ultimately jointly and severally liable for each other's debts and commitments. OP Corporate Bank acts as OP's central bank.