Digital ING leads the way in Germany
16 August 2017
ING in Germany is faring better than competitors, according to an article by Reuters.
For one, it’s profitable—unlike rivals struggling with outdated technology, shrinking margins from negative interest rates and expensive branches that are even more expensive to close, Reuters reported.
The article says that Germany has as many bank branches as bakeries—1,888 financial institutions and 33,914 branches at the end of 2016, according to a Bundesbank report in May. That's half what it was 20 years ago, but there’s still more consolidation needed.
The newswire cites a study by Bain & Company saying that France gets by with fewer than 500 banks, and Japan with around 140. The reduction of 10,000 branches and 115,000 jobs over the next decade is "possible and necessary".
No traditional bank
ING has never been a traditional bank in Germany, and has never had branches there. We’re now working to be the country’s digital leader and first truly next-generation bank. For example, new customers enjoy a clear and easy fully digital account-opening process in just three steps.
ING’s goal is for Germany’s people to think of us when they think of banking and finance—just like they think of Amazon for online shopping and Google for online searching.
It seems to be working, as we continuously gain customers and have been voted Germany’s most popular bank for 11 years in a row.
"You can actually now develop a relationship with a customer which is as broad as with any normal branch bank, but digitally only," ING CEO Ralph Hamers told Reuters.
"Because everything is digital, the data analysis enables you to understand the customer that much better."
Customers no longer want to make trips to bank offices or deal with paperwork, they want to do their banking via mobile phones, including approving payments by fingerprint, the article cited ING as saying.
"In comparison to the German banks, our offering is so much more simple, so much more accessible, so much easier," Ralph said to Reuters.
Established banks are taking note, adjusting branch-focused business models and enhancing digital offerings, analysts say.
"It's all about finding the right balance," said Bernd Ackermann, an analyst with S&P in Frankfurt, in the article.
