From Financial Wholesale to Retail

Abstract

Preparing an IT infrastructure for e-commerce In the beginning of 2001, the newly employed Internet director of the largest Danish mortgage company Nykredit was on his way to a meeting to review and revise Nykredit’s Internet strategy. The principal consideration was depending on how to distribute Nykredit’s many products and services in the near future. One basic question summarized the pending decision well: Should Nykredit primarily rely on a call-center and a strong web presence or should Nykredit extend its present branch network, focus on building up a finely meshed physical network, and distribute its services mainly through branches and offices? Nykredit was in a unique position in that it did not have many physical offices, and therefore Nykredit did in fact have a real choice that many other financial companies did not have in practice. On the other hand, the choices were only real if Nykredit could meet the technological challenge and if they, by the use of technology, could convince the customers that personal service was possible without a strong physical presence. The meeting was to take place at Nykredit’s Data Center in Aalborg. As he was walking through the building’s long passageway, he was thinking to himself how IT was once a remote back-office support service and how it had now moved to the center stage and had become the business storefront. The fact that the strategy meeting took place at the data center underlined the importance of IT to Nykredit. Any decisions on distribution had to be carefully aligned not only to traditional considerations such as Nykredit’s own organization, the market and the competitors ’ initiatives, but also to Nykredit’s existing IT infrastructure and its IT department's capabilities to produce modern software fast. Jan Damsgaard, Jens Hørlück and Christian Søndergård Jensen prepared this case to be used for class discussion. It is not intended to illustrate either effective or ineffective handling of an administrative situation.