Fintech Disruptors: What is on the cards for ING in the next phase of financial services and how are you adapting as a bank to the digital era?
Karien van Gennip: I am sometimes surprised at this question because fintech is already a way of life at ING, whereas some other banks might still be on the defensive. ING is in fact a source of innovation and creativity in digital finance and we’re partnering with 150-200 fintechs globally and circa 20 in France. When you have a good fintech it normally involves working with an energetic group of people with creative ideas to improve the customer experience around a given product or service. What we as a bank bring to the party is managerial experience, execution power, a base and a footprint in multiple countries.
Fintech Disruptors: Can you give us a practical example of a partnership that has been successful?
Karien van Gennip: A recent experience in France has been with Kabbage, which provides instant lending to SMEs. Where traditional banks normally take weeks to provide an answer to a loan request, we are able to provide clarity in 10 minutes. Designing and bringing a product like to the market often involves five or six fintechs and, while it’s beneficial for fintechs and us as a banks, it is ultimately about bringing a new, workable and instant experience for the customer.
Fintech Disruptors: How does this additional pool of vendors add to complexities for the business?
Karien van Gennip: It’s already more complex. We innovate by insourcing, outsourcing or partnering with fintechs. It’s obvious that an old-fashioned banker and young tech guy might have challenges to work together but we have so much to offer together that you can overcome these quickly. We are learning to manage the complexity of different cultures, but the important principle of design is to remove the complexity for the client.
Fintech Disruptors: What criteria do you use in selecting these, often very small, tech suppliers?
Karien van Gennip: The vetting process is handled centrally by the Group. We’d typically search and find a fintech in one country, get to know them and what they do, look at the business case and understand the opportunity. We don’t partner just in one country but look for a solution for the whole of ING, which involves introducing candidates to our innovation group in Amsterdam where the business case is carefully looked at.
An important principle for us is to fail fast. If an idea doesn’t work we’re willing to let it go, for example in the case of Twyp, our p2p payment app for small payments which was a hit in Spain with 300 000 users. It didn’t work in the Netherlands so we stopped it there. The same for a partnership, there has to be a clear business opportunity for both parties. This in itself is a cultural change – we address this by starting small, testing and then scaling rather than starting out big. It’s a step by step approach.
Fintech Disruptors: How is ING adapting its culture for this new environment?
Karien van Gennip: At ING Direct we like to say we’re one of the first fintechs, running for 20 years old overall and 18 years in France. Catering for the new environment has not been the biggest challenge – openness to innovation has always been there. It’s about how to balance new tech with sound business, ensuring stability and complying with regulations. Design therefore has to go beyond service improvement and we need to think of financial services beyond traditional banking for the future.
Fintech Disruptors: What is your roadmap for the future?
Karien van Gennip: Our goal is to be the go-to place for financial services and we’re building multiple platforms to make it happen, a connection point for financial services. In October 2016 ING invested €800 million to develop three platforms: Orange Bridge, an omnichannel platform for the Netherlands and Belgium, Welcome in Germany, an open platform that welcomes other parties and Model Bank in 5 countries, which is based on the Spanish philosophy of building the best digital customer experience. The idea is to bring the best of the five countries into Modelbank, our new digital platform which is mid-way into its development.
Fintech Disruptors: How important is data in this journey?
Karien van Gennip: Data is underpinning this work, although my personal view is that the industry is just at the beginning of understanding data and analytics. We are currently recruiting more engineers than bankers in order to learn how to fully utilise data in line with new regulations, and beyond basic customer segmentation. A commercial model is paramount – data is a big determinant of how we will be doing business in the future but how business will change because of the availability of information is still difficult to say.
Fintech Disruptors: What about deep digitisation in the area of commercial banking?
Karien van Gennip: Blockchain is clearly taking off and there are dozens of pilots using blockchain in efforts to digitise trade. In September ING was one of 15 banks, commodity houses and trading companies that launched komgo, a blockchain based venture to improve security and efficiency in commodity trade finance. Scheduled to go live in November 2018, it will offer two products to service the energy, soft and metals commodity sectors. One standardises and facilitates the Know Your Customer process while the other is for digital letters of credit. Apart from being more efficient – the time spent on processing documents and data can be reduced by up to five times. ING has established a blockchain division which is running several pilots in the areas of trade financing and commercial banking.