Business model transformation: From traditional bank to digital pioneer

From traditional banking to digital pioneer – that was the vision a long-standing, well-established bank had in mind with its strategic business model transformation. Supported by Horváth’s best-practice approach, the financial institution has implemented comprehensive restructuring at all levels of the organization. And it has been a great success: Shortly after the launch of the app, which is at the core of the new business model, the bank recorded a significant increase in new customers.

A bank that fits in your pocket – that was the objective when transforming the business model of this time-honored banking institution. It also represented a major development step for the bank, which pursued this project with the intention of being a pioneer within its market. Developing an app which would enable the bank to access new target groups was a key component of the overall approach from the very beginning. Above all, this app had to be user friendly. To achieve that, simply transferring classic e-banking interfaces to a smartphone would not do; instead the solution needed to consistently focus on the banking functions people use on an everyday basis. The aim was to harness the latest technologies and create a user experience that appeals primarily to younger customers who have grown up with social media and messaging apps. The bank’s strategy was to use unique digital solutions to draw attention to its offering. As a comparatively small institution, it wanted to demonstrate boldness by breaking out of traditional retail banking business models and standing apart with innovative product offerings.


The bank brought in experts from Horváth in order to achieve these ambitious goals. This team supported the development of a new digital business model from idea to implementation – and in a timeframe of just eight months. The intention was to transfer the bank to a new digital ecosystem, using agile and pragmatic solutions to ensure the future-readiness of the bank.

The Horváth team started by examining the customer structure of the financial institution. Their analysis showed that only a small proportion of the bank’s customers were under the age of 40; this meant the customer base was steadily shrinking, which jeopardized the future of the historic institution. With this in mind, the Horváth team placed the needs of younger people at the heart of the innovative project, and even incorporated them into the development of the new app.


Horváth focused on a strict mobile-first principle right from the start. The app was developed for smartphones from the ground up and offers state-of-the-art technical features. The user interface is easy to use and focuses on the essentials. Users can check their balance simply with a quick glance at their smartphones, while viewing transaction overviews and making transfers requires just a few taps. Thanks to intelligent “savings pots”, users can also save money for different purposes at any time – free of charge, of course. The app additionally includes a chatbot, which offers customers round-the-clock support with the app itself, but also answers to general questions about finance and pensions.

One innovative feature incorporated during the development of the app was the integration of new partners who can offer added value, by means of a digital ecosystem that goes beyond banking itself. In the integrated store – a digital marketplace – customers can find tailored, supplementary offers from other companies such as insurance companies and online retailers. The fact that the app, including the associated debit and credit cards, can be used free of charge is another appealing feature.


The uncompromising mobile-first approach and the involvement of partners create a unique user experience that is attracting a great deal of attention for the bank, especially among younger people. With its well-balanced range of functions, the app makes it possible to successfully appeal to digitally-aware target groups. At the same time, the bank has continued to be attractive to existing customers. The project leaders understand that not all customers want to carry out banking transactions exclusively via their smartphones. As such, the bank wants to remain accessible to all, continuing to provide advice and local contact.


As well as identifying an ageing customer base, the Horváth team’s analysis of the status quo also revealed that many of the bank’s employees lacked digitalization-relevant qualifications. This made it clear that a transformation of the entire organization and the corporate structure urgently needed to happen alongside the strategic development of a new business model. The re-orientation of the organization to have a clear focus on new customers was developed by the team in collaboration with the financial institution itself, and was implemented successfully within the company by building up new in-house competencies such as agile working methods.


Even before the app was launched, the bank welcomed thousands of new customer pre-registrations thanks to a successful marketing campaign. After just six months in operation, the bank has become one of the largest smartphone banks in Switzerland. In addition to the enormous image boost, this has also had a significant impact on the regional and international market – a lasting effect, as the financial service provider is still seeing a rapid increase in the number of users. Attracting large volumes of younger customers has enabled it to tap into a new target group of digital natives. But the bank is certainly not resting on its laurels now: The leadership is steering from the front on digitalization, which will continue to be an essential part of the corporate strategy in the future and will be anchored in the organization for the long term.

The bank has successfully made the business model transformation and its strategic repositioning a flagship project in cooperation with Horváth. The consulting team supported the company in driving change through its own efforts, and in firmly establishing the necessary foundation of a continuous improvement mentality within the organization. Even before the project was completed, it set new records in the profitability reports. Following the successful reorganization, the heritage-rich company is now looking to the future with great optimism.

The consulting team has supported the customer in designing and implementing its new business model – and so in successfully navigating the transformation into a digital pioneer.