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Case Study

DNB Bank: Embracing startups as a growth strategy

By Goutam Challagalla, Francis D. Kim and Philip Charles Zerrillo

17 pages

October 2025

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Reference: IMD-2706

The case examines how DNB Bank, Norway’s largest financial services company, reshaped its growth strategy by focusing on startups and SMEs, a segment traditionally considered unprofitable. In 2013, DNB launched a bold SME strategy, deliberately choosing a gross approach to win new startups early in their life cycle rather than a net approach focused on the profitability of existing accounts. This strategy, enabled by a significant investment in digitalization and a cultural shift toward customer lifecycle engagement, generated exceptional results and by 2025, the SME segment delivered the highest return on allocated capital. The journey, however, was not linear. A European regulatory crackdown in 2019, following the Danske Bank money laundering scandal, forced DNB to shift its focus from growth to compliance. The bank reallocated 1,000 employees to KYC units, dismantling its startup-friendly onboarding process and causing customer acquisition to stall. As competitors advanced, DNB had to orchestrate a strategic Restart effort to rebuild its SME leadership. This involved launching superior digital tools, providing automated lending decisions within a minute, and renewing its customer-centric focus. By 2025, the recovery was well underway, with one in three Norwegian SMEs banking with DNB. The case challenges students to evaluate DNB’s past choices, the critical balance between growth and compliance, and the future of SME banking as AI and digital agents transform customer interactions.

Learning Objective

Understand the importance of dynamic customer segmentation (size + lifecycle events) in a banking context.
Analyze how digitalization reduces cost-to-serve and enables profitable engagement with low-revenue and high-risk customer segments and apply growth frameworks to plan future digitalization/automation strategies.
Explore the interaction between national infrastructure and business model design in cross-border strategy decisions.
Understand the importance of new customers to a future revenue model.
Develop a grasp of how strategy execution is dependent on organizational culture and how priorities are communicated by leadership.

Keywords

Strategy, Customer Centricity, Business to Business, Small and Medium-sized Enterprise, Banking, Life Cycles, Profitable Growth

Settings

Nordic Countries, Norway
DNB Bank, Finance and Insurance, Banking
2013-1025

Type

Field Research

Available Languages

English

Related material

Teaching note

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