The success story of ING – Interview with Ralph Hamers (ING Group)

ING has achieved a level of profitability that many German banks can only dream of. What do you do better than your competitors?
I believe that it starts with having a clear, customer-focused purpose. That purpose then serves as the organisation’s ‘North Star’, keeping everyone moving in the same direction. ING’s purpose is to empower people to stay a step ahead, in life and in business. Notice that there’s no mention of ‘banking’ or ‘finances’ in our purpose. That’s because we recognise that banking is not a primary need for people – nobody wakes up in the morning with the urge to make a payment, or to apply for a loan. That means we have to think beyond banking, to what people’s real needs are – a home, education, the purchase of food or clothing – and figure out how we can empower customers to fulfil those needs. That’s the mindset that feeds into our Think Forward strategy.


Digital, instant, conversational: We will interview Ralph Hamers (CEO, ING Group) at the Handelsblatt Banking Summit,      4 – 5 September 2019 in Frankfurt/Main, about securing the future of banking.


We launched Think Forward back in 2014, at a time when the financial sector was emerging from the financial crisis, and more generally we were experiencing a technological revolution that was disrupting many different industries. I think one of our success factors is that we spotted a lot of the trends that were at the root of that disruption, and we acted. We realised that banking products and services were becoming increasingly commoditised, and that it would be the experience that would differentiate you from competitors. And the experience that people expect is very much based on their experiences as users of the innovative tech platforms, like Amazon, Facebook, AirBnB, Uber, etc. Personal, instant, relevant and seamless.

To be able to consistently offer a differentiating experience like that you have to be a data-driven organisation, so that you can understand customer needs down to the individual level, and you have to have innovation at the heart of your strategy, to be able to turn your data insights into clear and easy products and services that truly meet people’s needs. It requires a different culture than people maybe expect from a bank. Customer-focused, innovative, collaborative, agile. You have to have a fail-fast mentality, so that you’re always trying new things and if they don’t work out, you learn from that and quickly move on. Fortunately at ING we’ve always had an entrepreneurial mindset, and then there’s all the experience we gained with ING Direct, which was arguably the first-ever successful fintech.

Looking specifically at ING in Germany, the business here has grown from those ING Direct roots. Doing things differently – no branches, no fees, with products and services that are guided by the principle of simplicity. The digital-first model of course has operational cost advantages versus other banks with huge branch networks, but it’s the differentiating customer experience that I believe is the key to our success here. “Einfach, persönlich und smart”. That’s how we’ve been able to consistently grow our retail customer base by more than 20,000 people a month over the past five years, and that’s why we’ve been named “Deutschlands Beliebteste Bank” for an incredible 13 years in a row. I’m really proud of that. And on the corporate side, we’ve been growing our wholesale banking business steadily by focusing on our sector expertise and our strong international network, and by getting closer and closer to our clients. We now have offices in four major German metropolitan areas, so that our relationship managers can services our clients’ needs locally.

Sustainability is another success factor, which will only grow in importance. We know that sustainable banking is better banking, and more and more of our deals are about supporting our clients to make the necessary sustainable transitions in their own operations. In the second quarter alone we committed €4.2 billion of new green and sustainable financings. In Germany, together with LBBW, we arranged the first ever Schuldschein linked to environmental, social and governance (ESG) principles. And with our Terra approach, we’re aligning our entire lending portfolio with the below-two-degrees goal of the Paris Agreement, and we’ve been encouraging other banks to do the same.

You have established ING labs in Amsterdam, London, and Singapore. What strategy is this based on?
Innovation is at the heart of our Think Forward strategy. We’re always looking for new ways to do things faster, better, smarter – feeding into a differentiating and empowering experience, that meets the needs of our customers, and helps them achieve their dreams or solves the challenges they face. There are many ways to innovate – we have our own internal innovation methodology called PACE, based on agile development, lean start-up and design thinking, which is being used across the whole company, and we’ve also had regular ‘Innovation Bootcamps’ that encourage all colleagues to submit innovative ideas – with the winners rewarded with the support they need to turn their ideas into minimum viable products. The ING Labs are another element of our innovation approach. At the Labs we explore new areas and business models and try to accelerate disruptive innovation across ING globally. They are accelerators that seek to create minimum viable companies (MVCs) which are ready to scale. When those MVCs are ready to scale, they can pitch for funding from ING Ventures or other investors, or they’ll already be at a level where they can be incorporated into our business. And because we realise that we of course do not have a monopoly on good ideas, the Labs are the places where we can collaborate with all the smart people outside of ING. This ability to partner and collaborate with third-parties is also key to successful platform models.

ING Labs are physical locations in Amsterdam, London and Singapore where ING and our partners –  start-ups, scale-ups, researchers, academics, entrepreneurs, other corporates – can work together. Each Lab is focused on specific ‘value spaces’, which match the local expertise and vibrant innovation ecosystems available in these locations. So in Amsterdam we focus on innovating in the areas of housing, digital identity and mobility, and also the ‘wild cards’ – interesting, unorthodox areas where we see opportunities to disrupt. In London it’s RegTech, capital markets and real estate, and in Singapore we‘re working on innovating in the area of trade and logistics, as well as tools to help companies with Know Your Customer compliance.

Your bank is the first “agile bank”. What were the biggest challenges during implementation? Have there already been measurable successes?
ING is indeed the first bank in Germany to introduce an agile way of working fort the whole organisation. Within ING we first piloted it in the Netherlands and have since been rolling it out to all parts of the organisation. I’m also working this way with my team, the management board. As I’ve already highlighted, our strategy and our transformation into the digital bank of the future relies on a culture of innovation and collaboration. Having one shared agile way of working supports this, and speeds up the delivery of customer and other innovations. By organising people in multidisciplinary, cross-functional ‘squads’ and ‘tribes’ with end-to-end responsibility, we empower our workforce to develop an innovative and collaborative mindset, and it allows us respond more quickly to customer feedback and their changing needs. That means faster time-to-volume and more internal efficiencies as we break down organisational silos. This new way of working also serves to attract and retain the digital talent that we increasingly need as we transform to a platform-based company.

Any fundamental change like this needs a period of adjustment for the people involved. Change causes uncertainty, and different people deal differently with that uncertainty. Trust is an important success factor, and it requires leaders and managers to give up a bit of control. So we see that adopting the agile way of working tends to be more difficult for leaders and managers than those on the workfloor, and so we’ve organised special leadership training programmes for local leaders to prepare them for such behavioural change. Another challenge is the cultural differences that naturally exist between different countries. To work successfully in cross-border teams can require a behavioural shift. In our case, we have a strong set of values and behaviours called the Orange Code which guides us in how we work together.

In Germany we have seen a decline in employee engagement as we go through the implementation phase. This is to be expected, and I’m confident that satisfaction levels will increase once we’ve completed the process. This has been the pattern in the other countries like Spain, Poland and Romania where we’ve already implemented the one agile way of working. We measure engagement with surveys and ‘pulse checks’ before and after implementation, and the results show that engagement generally increases after a period of a couple of months as colleagues start to feel the benefits and positively respond to the greater autonomy and control they now have over the work that they do. We also measure the productivity of the individual squads, and usually see a productivity increase after implementation. In general, we’re seeing that our one agile way of working is delivering on the objectives of faster time-to-volume, more efficiency, higher productivity, and the attraction and retention of digital talent.

Which future technologies does ING rely on and what applications can we already look forward to today?
We’re interested in any new tools and technologies that help us to bring our purpose to life. Those can be things that directly improve the customer experience, or things that help us become more effective and efficient in our internal processes and way of working – which of course also ultimately improves the customer experience.

We’re currently going through a transformation to make ING an even more digital and dynamic bank, moving to a platform-based model. To do that, we’ve been uniting and standardising our IT and processes, what we call our ‘foundation’. This involves technologies like cloud-computing and TouchPoint Architecture (TPA), which is about a modular approach to application development so that components can be easily re-used around the bank, not re-invented. Thanks to TPA, we were recently able to launch a brand-new mobile-only retail bank in the Philippines from scratch – in just 10 months!

We’re also piloting the use of artificial intelligence (AI), machine learning and predictive analytics in different areas – from customer service with intelligent chatbots, to bond trading with our AI-based pricing assistant Katana, to tools that enhance the accuracy and efficiency of our customer due diligence and anti-money-laundering processes. In Germany we recently added a feature to the banking app that uses predictive analytics to show customers a view of their upcoming debits 35 days into the future, helping people to better manage their finances.

Something else I’m excited about is our work in the area of Distributed Ledger Technology (DLT), which is the technology underlying Blockchain. We’ve been pioneering the use of DLT in trade finance, where we’ve conducted live commercial transactions with huge efficiency improvements in what is usually a very time-intensive paper-based process. Transaction times have been reduced from many days, even weeks, to just 24 hours – and I’m sure we can reduce the time even further. And we recently joined a consortium that is using DLT to digitalise the Metals & Mining sector. We’re also testing DLT in the area of collateral lending and the trading of high quality liquid assets. And we use this technology for what is called Zero Knowledge Proofs, which provide greater client data security and privacy. Zero Knowledge Proofs make it possible to validate a secret value without actually having to reveal the exact value – for example, in a mortgage application the applicant’s salary range can be verified without having to provide the actual amount.