Skip Ribbon Commands
Skip to main content
Sign In

Danish banks invest in digitisation, automation and new payment systems

Danish banks invest in digitisation, automation and new payment systems

Jan Kondrup, CEO of the Association of Local Banks, Savings Banks and Cooperative Banks in Denmark

​​​​​​​​​​​CEO of newest ESBG member LOPI presents association, discusses main challenges, opportunities for sector in Danish market as well as future plans.​


>> Learn more about LOPI

>> Read more about ESBG and its members

>> See ESBG position on proportionality

BRUSSELS, 7 April 2017 – Denmark is one of the countries in Europe with the highest rate of use of debit and credit cards. According to the hub Payments Cards & Mobile, more than 73% of all payments in the country are non-cash (see table below). This percentage is expected to get even higher since Danish local banks launched last month a digital wallet for Dankort, the country's national debit card. The Dankort wallet allows consumers to make contactless mobile payments, which works on Iphone and Android.

“At a time with negative interest rates in the Danish Central Bank, the top lines of our member banks are under pressure, because of an increasing deposit surplus. At the same time consumers and businesses are taking the opportunity to repay their loans instead of demanding new ones", said Jan Kondrup, CEO of the Association of Local Banks, Savings Banks and Cooperative Banks in Denmark. He explained that the situation drives their member banks “to deliver even more valuable services and higher quality to the customers, and invest a lot in digitalisation, automation and new payment systems to be better and more effective."

The association, known as Lokale Pengeinstitutter, or LOPI, in Denmark, was the latest to join the European Savings and Retail Banking Group (ESBG), having been confirmed as a member in July last year. LOPI has more than 60 local member banks in Denmark, The Faroe Islands, and Greenland that provide services in about 500 branches and have a total of about 8,000 employees. ​In addition to challenges and opportunities due to the low interest rate environment, Kondrup also spoke to ESBG in an interview about the main concerns of the sector in Denmark, the best ways to keep the customer's trust, and what LOPI expects from their ESBG membership.

LOPI in a nutshell

Association of Local Banks, Savings Banks and Cooperative Banks in Denmark / Lokale Pengeinstitutter
MembersMore than 60 local savings and cooperative banks
PlacesDenmark, The Faroe Islands, and Greenland
Staff in member banks8,000​
Market share
Just above 25%


​Next steps towards digitisation

After the launch of the digital wallet, ​Danish banks are now planning to incorporate robotics and more automation into their banking systems, which would help improve standardized procedures and help the staff focus more on servicing the customers and less on paper work and administration. “We are working with new IT systems and trying to make the banks more automated. Now we begin to see robots handling data on the back office of the branches," Kondrup stated.

This increase in process automation will however not affect the customer's experience of being a well-known person in the bank. There will be no call centres replacing the personal contact between bank staff and customers, which Kondrup believes to be one of the keys for keeping the customer's trust for a locally based retail bank. “It makes local banks and savings banks in Denmark unique. Our member banks are very close to their customers, and they are very visible outside the major cities", he highlighted, adding that “We see that many big banks are closing branches, but our members are not."

​Main challenges for the sector

Kondrup cited the low interest rates in Europe and especially in Denmark as the main current difficulty to overcome. The Danish central bank, Nationalbanken, has imposed since 8 January 2016 ​a toll on 0,65% on the banks' deposits. “That is not the usual way to run a bank", Kondrup commented. Even so, Kondrup says, the small and medium sized banks within LOPI have shown fine results in their annual reports for 2016, because loan impairments have declined and banks now experience a historically high inflow of new customers from other banks.

At the same time, he is glad that the economy has been growing over the last years, even if the GDP growth has been around 1%. “If we look at the annual results they are definitely fine, because even though demand for new loans is weak, we are not in a financial crisis anymore."

Another challenge is all the new regulation European banks have to deal with and the lack of proportionality in the banking sector. The principle of proportionality strives to avoid one-size-fits-all legislation, stressing that balanced regulation adjusted to the size, complexity, business model, and cross-border activity of financial institutions should be ensured. “It is highly important for us to have proportionality so the large and the small banks are not treated the same way and disproportionate obligations are avoided," Kondrup stated.

Expectations regarding ESBG membership

Regarding LOPI's experience with ESBG so far and the association's future expectations, Kondrup stressed that both ESBG and LOPI sh​are the same interests. “We need to push for proportionality and we need to be very quick and proactive regarding new regulations. It's not enough just to sit and wait, we need to speak to the regulators and politicians in Brussels," he commented. Kondrup added that he and his colleagues have attended events organised by ESBG and read communication materials from the EU-policy-focused association​ on an ongoing basis to keep informed on policy and industry developments. 

>> Learn more about LOPI

>> Learn more about ESBG and its members

>> See ESBG position on proportionality

Digitalisation; Proportionality; Communication - institutional & commercial; Innovation; Payment instruments; Innovation Hub