Commerzbank: Germany’s Number Two Doubles Down on Digital

Tobias Kruse

In June, Michael Mandel, CEO of Commerzbank’s retail banking business, announced the bank’s intent to become a multi-channel bank. Its in-house design thinking agency Neugelb is to turn Commerzbank into a fintech.

Commerzbank wants to reinvent itself entirely. In a workshop discussion in June, retail banking CEO Michael Mandel said that the bank is moving towards becoming a multi-channel bank: “Multi-channel enables more customers, more sales, more revenue, lower costs and higher profitability,” he said.

For Germany’s second largest bank this means that branches, online and mobile banking as well as customer service need to be interlocked. The customer need to be able to switch seamlessly from mobile offerings to receiving advice in a branch and then purchase financial products in an entirely different branch. Just as the retail industry lets customers order something seamlessly online and then pick up the goods in a store. The bank has done successful pilots in flagship stores and will officially begin to roll out initiatives to better interlock and redesign experiences in Q4. “It’s crucial that in the end the entire business will be digitized,” Mandel said.

The bank is investing EUR 200 million into digitizing its retail banking business.

 For technical implementation, Commerzbank will rely on its own design thinking agency instead of external providers. Neugelb’s team of twelve, a 100-percent subsidiary of the bank located in Berlin and Frankfurt, will work on the user interface and help develop products for customers. It’s all about speed and creativity: the fintech competition is speeding the development. “Commerzbank has recognized that banks need to get closer to the customer again,” says Tobias Kruse, business design director at Fjord, Accenture’s innovation consultancy. “Even more than others, financial services companies are running the risk to develop products and services that don’t meet actual customer needs.” However, this is to end now.

Neugelb’s future tasks include the introduction of new ideas on a monthly basis, such as banking apps that allow ten-second transfers and the opening of an account in no time without the need to visit a branch in person. According to its managing director manager Holger Grünwald, current main projects of Neugelb include cross-channel banking platforms which will help strengthen the brand. “The advantage of being a 100-percent subsidiary is our deep understanding of the banking expertise required of an agency.”

Previously, the bank used to purchase user interfaces and the like from a dozen providers. But this approach no longer meets the bank’s digital strategy. Building a proprietary agency to take on these jobs came natural. “We work closely with our Commerzbank colleagues and try to bring all the professional teams together on a regular basis to break down the silo mentality,” he says. He also said that it’s important to keep these meetings from getting too large as it’s difficult to come to a decision with more than ten people sitting at the table. As a basic rule, Neugelb does not develop products that aren’t supported by Commerzbank employees just because the management has put out the order to digitize. This would be the wrong approach, Kruse states. “Forcing people to do something doesn’t lead to sustainable and long-term change. People have to want to do it.” In the case of Neugelb, this is working really well, according to Grünwald.

Which does not mean that there haven’t been any reservations against the bank’s own start-up, Grünwald admits. To counter these reservations, Neugelb demonstrated the benefits of design thinking to the employees with concrete examples: “Whenever somebody had an issue with a certain a workflow or something similar, we presented a very specific solutions for it.” It simply doesn’t pay off to just preach miracles. “In large companies, employees have seen a lot of methods come and go, so you have to convince them,” says Grünwald.

Kruse agrees: “Employees need to experience that design thinking isn’t just a theory. This is why we show them what we do in a tangible way, so that employees can experience it and then believe in the success.” By 2020, this success is supposed to be visible and noticeable not just to employees but to the customers. An ambitious schedule, according to Mandel. And Neugelb? The agency wants to grow from 12 to perhaps 50 employees over the next three to four years. “We have very few external clients yet, but we are open to many things,” says CEO Grünwald. “I’d be pleased if we got a request from an automotive company. That would be a sign that we have done it right.”

Read the full article at Wirtschaft Woche

The work was also featured in Horizont (print edition). 

Tobias Kruse

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