ING presents itself as an innovative bank, and that is more than mere sales talk.
The bank has a proud track record (first ATM in the Netherlands, the first with internet banking) and appointed a chief innovation officer in 2014. ING keeps ahead of its traditional rivals, but is it doing enough to keep the hungry fintech wolves at bay?
|Turnover (billion euros)||55.8||42.6||26.3||15.6||16.8|
|Profit (billion euros)||5.9||4.0||3.4||1.4||4.4|
|Market capitalisation (billion euros)||21.0||26.8||39.0||41.8||48.0|
Innovation is one of the spearheads of ING’s Think Forward strategy. Brunon Bartkiewicz, the bank’s chief innovation officer, describes innovation as ‘a constant flow of ideas’. ‘You have to offer clients something valuable, something that makes their lives easier and that gives them the edge, both privately and commercially.’
ING believes that its staff are no longer bankers, but IT workers. However, some analysts remain sceptical. Doesn’t innovation often boil down to, in the words of KPMG partner Ank van Wylick in a recent blog, ‘product innovation, such as a little app’ instead of renewing the entire business model?
Managing Director Ralph Hamers wants the bank to change into ‘a flexible IT company’ that more rapidly responds to the changing needs of clients. To achieve this, the bank is going to work in small, multidisciplinary, self-managing teams – called squads. These are groups of nine specialists who’re responsible for new products and services from start to finish. Long meetings and terms like ‘line manager’ and ‘departments’ are – at least in the pilot stage in the Bijlmer office – things of the past.
‘We’ve started working according to a different philosophy,’ says COO Bart Schlatmann to Het Financieele Dagblad. ‘Why does a client have to answer 36 written questions before we issue a new bank card while, for an Amazon client, a purchase is three clicks away? We’ve decided never again to ask our clients for the same information twice. A client can now order a new bank card with four clicks.’
ING has no choice, because start-ups are increasingly threatening traditional banks. In September 2015, for example, a banking licence was issued to Bunq, an ‘IT company with a banking device’. Founder Ali Niknam sees a new world ahead with small business with products ‘that you also really want to use instead of have to use’. The Danish Jyske Bank, again, was bold enough to transform into a giant media channel, with its own reporters, producers and photographers. For the time being, ING has not gone quite so far, but the bank is clearly busy changing direction.
ING is working on new functionalities, such as voice recognition, fingerprint log-in and a control environment that can be adapted to individual needs. As the first Dutch bank, ING last year also joined a group of international banks that is looking into the possibilities of blockchain technology, the technology behind Bitcoin.
Whether the steps taken by ING are radical and innovative enough, remains to be seen. However, thanks to a considerable reduction in staffing levels, increasing profits and a recovering economy, the bank can invest in and experiment with the future of the banking sector.
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