How Danske Bank is preparing for P27
Kasper Mortensen, head of the P27 Programme at Danske Bank, opens up about managing the largest prospective transformation programme of his career and the challenges of preparing for the potential arrival of a new payments infrastructure in the Nordics.
While the Danske Bank name may only be two decades old, the bank and its predecessors have played an important role in Denmark’s banking sector for nearly 150 years.
Today, the bank is decidedly Nordic, with extensive retail and corporate banking operations across the region, handling payments for millions of customers across the Nordics. And according Danske Bank’s Kasper Mortensen, it’s those payments that give life to any bank.
“Payments are like blood in the veins for banks,” he explains.
Considering Mortensen’s reverence for payments and their vital role for his bank, it’s perhaps not surprising that Danske Bank tapped the seasoned transformation manager to head up the bank’s P27 Programme.
He was quick to welcome the chance to help Danske Bank stay on the leading edge of potentially implementing a new payment infrastructure that will enable real-time, cross-border payments across the Nordics.
Nevertheless, Mortensen remains somewhat in awe of the magnitude of the task before him.
“This is probably the largest potential transformation that I have been a part of,” he said.
From mainframes to modular
Increasing globalization, regulatory pressure, growing competition from big tech companies, and the importance of delivering better solutions to customers are some of the main drivers of Danske Bank’s embrace of P27.
Incumbent banks in the Nordics have also struggled with innovation, according to Mortensen, in part because of a reliance on domestic solutions tied to mainframe legacy infrastructure.
“Our current payments offerings and processes have been set up over decades in a much less globally integrated and digital environment. This has resulted in massive legacy and complexity issues within existing systems, products, and services,” he explains.
A first step on Danske’s journey toward becoming a better bank involves reviewing and rationalizing the bank’s current offerings by leveraging modern capabilities now available and harmonizing offerings across the increasingly integrated Nordic markets.
The potential arrival of P27 is a welcome catalyst in that process and a “high-priority” for Danske Bank. It means moving to cloud-based solutions that are open-source and standardized.
Specifically, P27 aims to help Danske Bank decommission and remove nine different infrastructures currently in place today. This process will be a radical evolution for what Mortensen admits is an “old and traditional” bank into one with a more flexible and modular approach.
“We really need to set up Danske Bank in a completely different way,” he says.
Mortensen admits that the P27 transformation process could be difficult, but he’s convinced Danske Bank could be a stronger and more competitive as a result.
“We need to acknowledge and understand what the future commodity components are and how our solutions and offerings can stay relevant and valuable to our customers,” he says.
‘There is no plan B’
In addition to overseeing internal processes related to P27 implementation planning, Mortensen also serves as Danske Bank’s representative on the P27 Advisory Board, which he calls a “vital link” to the banks that will build and adhere to the standards that P27 could eventually provide.
This puts Mortensen in the middle of complex and sometimes contentious discussions with his counterparts from the other five P27 owner banks about how to move forward with different steps of the planning of P27’s potential implementation.
“This has never been done before. But everyone knows that eventually we have to find a consensus,” he explains.
“There is no plan B. Not agreeing is not an option.”
NOTE: The official launch of P27 services is subject to regulatory approvals and therefore P27 will not conduct any business activities until required regulatory approvals are obtained.