Ignacio Juliá Vilar, Chief Innovation Officer, speaks to bobsguide about ING’s historic fintech roots, the bank’s strategy to stay competitive, and the plan for a PSD2 future.
How do you approach innovation?
We look at the three Cs – customer, culture and connection. Customer: we’re changing the shape of products and services to become more convenient for customers – if technology can enable that, brilliant, if not, tech is not the priority. Culture: we look to thread an innovative and entrepreneurial culture throughout the business. Connections: this is about looking to the external world for solutions and collaborating with fintechs but also about connecting our 52,000 employees internationally to foster the business and innovative culture.
How has ING embraced digital transformation in the last decade?
There are two separate phases to talk about. First of all, it’s worth noting that ING has been a frontrunner in the digital area for some 20 years when we set up ING Direct which is our fully digital, retail bank and is still active in nine countries; we sometimes half-joke that ING Direct was the first fintech ever.
The other phase that started a few years ago, is our agile way of working in the Netherlands. That was followed with a bigger, global transformation which has received an 800m euro investment towards digitisation such as the development of APIs. Further to that, the agile programme is being rolled out in different countries and it is up and running in the Netherlands. This is all part of the bigger transformation to become digital and satisfy customer demand for a mobile banking experience.
Do you think that a pure customer centric approach that we’ve been seeing from challenger fintechs will reach a ceiling or a saturation point?
Interesting question. I think fintechs still have some way to go before they reach that point but more importantly fintechs are stimulating banks which, ultimately, is to the benefit of the customer. At ING we partner with 115 fintechs who help us reach our goal and empower people to stay ahead of business. We truly believe that innovation for financial services should aim to be relevant, to be seamless and to be instant and personal. And there is still a lot to do. Banks and fintechs together can do a lot and you already see great products and services to the market. At the same time, let’s not forget that customer behaviour is an ever-changing phenomenon. In many ways you’re right, with the current progress of innovation, we might reach the ceiling in five years or so, but at the same time customer behaviour is moving the goal posts too.
It’s why we think that collaboration between banks and fintechs works well – we provide a way past the scalability ceiling with a customer base of 37 million and 52,000 employees worldwide. By adding the fintech’s specialist knowhow on customer experience but also their specific flair for a certain technology you combine the best of both worlds. They profit from our strong, trusted brand and scalability and we profit from their agility, their technology and their customer-centric entrepreneurship.
To this end, we just announced ING Ventures to invest 300m euros in fintechs in the coming years to accelerate innovation.
Do you develop externally, or do you have an internal accelerator?
We have a full organizational structure within the company, called Chief Innovation Office, which includes ING Ventures. Of course, the appointment of the Chief Innovation Officer sends a signal through the organisation, but more importantly, we’ve also looked to thread it into the organizational structures as a whole. Our PACE innovation methodology which is a combination of lean startup, Agile and design thinking is playing a crucial role in creating this innovate culture as well.
There’s a whole ecosystem of internal and external structures geared towards innovation. We’ve also trained 4,000 people in PACE as an alternative approach to changing the culture at ING. We’ve also changed structure to allow for innovation in the workplace. We have innovation boot camps, that have seen a thousand new ideas suggested by our employees every year, our accelerators that develop internal and external startups as well as the 115 partnerships with fintechs which are in the scale-up phase.
Does that have a bearing on the sort of people ING are hiring?
As we’ve already seen, we’ve made an effort in bringing in startup fintechs, but we’re also staffing our departments worldwide with people trained in our innovation methodology, PACE. On top of that we’re hiring in many parts of the company people with a focus on analytical and digital skills or who share an affinity with technology and innovation. Whilst we have an image of being innovation frontrunners attracting the best and brightest is a constant challenge as we have to compete with smaller fintechs or large technology providers; it is our aim to become more and more attractive and bring them to ING to merge small fintech innovation, the capability of technology providers and the scalability that our brand already offers.
Which of those fintech partnerships are the most significant for ING?
Kabbage, a US based instant SME lending fintech, is an important partner that we have and we’ve just launched their services in France and Italy. What we like about Kabbage is that SMEs can get an approval for a loan fully digitally within 10 minutes – so it’s really quick and customer satisfaction is very high. Along with a few other fintechs who do the onboarding and disbursement, we offer that as an ING product.
Our accelerator too has graduated some fintechs into the market that are already enjoying success. Yolt, active in London, which is an aggregator that pulls in all accounts for easier budgeting, has enjoyed particular success in the UK market with tens of thousands of sign ups (the exact number is confidential).
Payconiq, a mobile payment platform, is another of our fintechs which we are going to roll out initially in Luxembourg and the Netherlands in conjunction with a few other big banks. More than 30,000 merchants are using the platform in Belgium and Payconiq is great example of cross bank collaboration.
Looking to the future, which of the emerging technologies are ING investing in?
Our main priority is to create a differentiating customer experience, so the technology per se isn’t the most important aspect unless it can drive that customer experience.
We’re not a bank that dives into every new technology that comes to the market, but AI, machine learning and blockchain are definitely on our radar. For instance, we’re already experimenting with blockchain and have joined the R3 Consortium where we launched a commodity trade finance platform based on blockchain technology by Easytrade Connect, the winner of the ING boot camp. The jury is still out on blockchain but we’re on top of it and have plans in motion if the technology does indeed have impact in the future.
Do you have any new fintech partnerships the bobsguide audience should know about?
We can’t disclose anything officially, but with our newly launched 300m euro ING Ventures, we’ll be making seed-stage and scale-up investments very soon. What I can tell you is that we’ve recently launched a partnership with Scalable Capital, the robo advisor in Germany, and on the back of good customer experience we’ll look to expand to other countries.