The agile transformation is a way, not a goal

Daniel is new at ING in Germany. Since february he works as Head of Retail Banking. In the interview he speaks about fintechs, new products and, what should do now.

You joined ING nearly a year ago. What conclusions do you draw after this time?


The more I get to know the company, the more I am impressed about the incredible, successful business that we have built here in Germany. What we have achieved is difficult to see elsewhere in the European market: the combination of size, a powerful brand and the positive financial results. But being successful in the past doesn’t mean that we will be successful in the future. We need to change to keep in step with the rapidly changing environment around us. It is important that we are all aware and ready for this change.


2018 is about our agile transformation. The Delivery units adopted agile working methods in August. What is your first impression? How do we measure the success?

I think we can be proud of the changes we have made. But it is important that we all acknowledge and understand that moving to agile is not a milestone in itself but a journey we are making. We are still in the earlier steps but I am happy with the progress. The new organization is already creating much clearer areas of responsibilities within the bank and I am starting to see more focus in business. I will consider this transformation a success as soon as we manage to bring good and new services to our clients faster. The key of this transformation is to become more dynamic and be able to move as fast as the market is going. We will see success in the speed of change.

Additionally we are in the middle of rebranding from ING-DiBa to ING. How can this be done successfully?


Our rebranding from ING-DiBa to ING is not a change of strategy; it’s a change of logo. ING is becoming a global banking platform. We see more collaboration than ever between the different units, for example with our app or our global partnership with AXA. Harmonizing the brand, when we are harmonizing the business, is a natural step. It is important that we explain to our customers how they will benefit from this global brand. But we also have to assure them that the local, successful German roots that are associated with DiBa are not lost.


With all the changes we are making ‑ how is the business going this year?

In 2018 we had some good changes in the dynamic of business. We have seen much more accelerated growth in mortgages, consumer loans, investments products and even in current accounts. The number of the payment accounts that we managed to distribute is higher than in the previous year. This improves the financial performance of the bank. While in 2017 the costs were growing much faster than the revenues, the situation has changed in 2018. We will finish with a very similar amount of costs in the bank, but the revenue will grow. However there are also some things we need to take care of: The Net Promoter Score (NPS) today is lower. To see a positive trend in NPS is a very important goal for next year. Next year we will keep facing a low rate scenario which does not benefit our model. In this context, it will be more important than ever to use wiser our resources as we will not be able to grow our cost base.

„Fintechs and other partners bring important skills: speed and a fresh approach into banking. “

Daniel, Head of Retail Banking

How can we generate additional income in the future and still stick to our strategy?


I see a lot of opportunities in all the different business lines we have. If you look at mortgages, we have the opportunity to distribute many more mortgages without depending on brokers. We see very good success in the experiments we are doing with agile in the power sales team, for example. In consumer loans a big priority for the tribe will be to create a totally digital, instant and paperless experience for our customers in the next year. In investment products we serve our self-directed clients very well, but we do not meet the expectations of clients who want advice. That is a direction we will explore also next year.  But it’s not only about the product level ‑ we also have to think in distribution channels. Already 60 per cent of the customer interaction happens through our app, but we are not able to sell our products there. I am sure that adding this possibility will lead to a positive business evolution. We are also discussing the role of Kundendialog in the distribution process. Kundendialog has been extremely important for the success of the bank in the past, but maybe we have not used exploited the opportunity to distribute our products fully. In the coming months we will also be moving from a service strategy to a service and sales strategy. And that will also generate additional business.


What are the next steps on the retail payments agenda?


Right now, payment is the fastest changing area. We have all kind of new players creating new services in that payment eco-system. We need to become more active. That is why we will be working on instant payments. In the coming year, we will launch the possibility to easily make payments with the mobile phone for our customers. We will also benefit from successful initiatives from ING units in others markets. The teams are currently exploring which of these features could also be useful for our clients. We also need to work on transforming cash payments to electronic payments. We are aware that cash is very important in the German market. But cash payments are not only more insecure, they are also really expensive for the bank. Every small per cent we are able to transform from cash to card counts.


What are the digital must-haves in Retail Banking?

At ING, we believe that these are the basics to properly serve customers in this digital age ‑ for example a push notification to signal a new transaction in your account. If we look at the situation twelve months ago, we couldn’t offer most of them to our German clients. I am very proud of the progress the digital team made last year. We are not finished with all of them, but almost. The digital must-haves is no static list. It moves because the customers’ expectation and needs change fast. The biggest gap I actually see is in the mobile sales functionalities. No one would understand today that you can’t buy something in Amazon over the app, but that you have to use your computer for that. This is our biggest priority and opportunity.

„I guess that in the future, customers will not think much about banks. They will think about financial services providers. “

Daniel, Head of Retail Banking

How do fintechs and other partners help us to develop new business segments? What is the biggest challenge?


Fintechs and other partners bring important skills: speed and a fresh approach into banking. There was a time where we thought that the customers only belong to the banks and that we can control the full value chain and deliver all the services they expect by ourselves. The biggest challenge is how to integrate these services, to get the best out of both worlds. We as a bank are heavily regulated and slow. The fintechs are faster, they change more rapidly and take more risks. I think the change we are making towards agile as a way of working helps, but it is still difficult.


How will the future of retail banking look like?


I guess that in the future, customers will not think much about banks. They will think about financial services providers. We can also say that banking will happen in mobile devices. We also can expect more global platforms in banking, rather than local players. Another important factor is the reduction on the number of banks that will be needed in the future, especially here in Germany. That underlines the sense of urgency and the importance of transformation that we are making right now. The big question is who will be providing these banking services in the future. I think it will be a combination of old and new players.


What about your personal targets in the last year?


I would rate myself between well done and improvement required. I have postponed my marathon due to an injury. Furthermore I am progressing with my German, but it is difficult. It made me a bit humble to see how easy it is to learn a new language for my children – but I will stick to it.  

What do you think?


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