Collaborative, connected, customer-centric ecosystems are the key to innovation in an Open Banking world, according to Mark Buitenhek, Global Head of Transaction Services at ING and member of the Board of Directors at SWIFT.
In the closing keynote at Open Banking Expo Europe, Mark Buitenhek gave an inspiring overview of ING’s road to innovation. He set out by suggesting that to remain a part of the future of banking, service providers need to think differently and become purpose-driven. He elaborated on this idea by sharing the vision of ING: “to empower people to stay a step ahead in life and business.” He noted that: “it took more than a year for people to actually realise that there was no reference to a financial product in there. It was a shock that this was the thinking of the leadership of the bank.” This is the customer-centric premise on which ING are building their approach to innovation, which they are bringing to life through a series of initiatives centred around building open, collaborative ecosystems.
“The future of retail banking will be digital and in particular, mobile” continued Buitenhek. “At ING, 26% of our customers are only doing mobile transactions – they have never visited a branch or ATM, or used online banking. This number is growing by the month and we estimate it will reach as high as 50%. This shows that experience is everything.” But despite this, he still feels that banks are a long way from getting the focus and delivery right. “In a poll at the recent Sibos conference, 80% of bank CEOs in the room said their customer experience is already great. But, when we asked the customers of those banks, only 8% agreed!”
This disconnect, he explained, is why a change in thinking is needed, to make sure the focus shifts fully towards delivering the best possible customer experience.
The path ING set out back in 2014, was to become a platform-based business and build an ecosystem that can compete with the biggest players in the world to deliver customer experiences that are easy, smart and personal.
Buitenhek explained some of the steps on ING’s technology roadmap, which he feels are pre-requisites for a customer-centric approach: “we knew we needed to we need to build one instance of our technology, and to become data-obsessed – to integrate all our data into our processes, thinking and decision-making. If you have one technology stack, you’re able to scale and you’re data-obsessed, then is the moment to create stickiness – to make people keep coming back.”
Naturally, ING have put significant effort into their own platform and branded activities.
Since 2014, they have been working to connect all the different countries they operate in “under one developer portal, one service environment with one key platform, including connecting all databases together. It was a high risk undertaking to do this in 3-4 years when the specifications [for PSD2] weren’t yet set. However, we felt that if we didn’t do this, connecting all those dots and creating that foundation to go forward, we’re going to lose the game.”
He admitted that “an individual country by country approach would’ve been easier to do, (although probably more expensive in the end) but it wouldn’t have put us any further forward in the Open Banking world.” Buitenhek said that ING now has close to 40 million customers using one access to account solution across Europe.
He also shared that, in addition to their own platform, the bank has actively created or pursued independent platforms too, because the bank determined it was “better to invest in these avenues and disintermediate ourselves rather than let others do it.”
Building collaborative ecosystems
Buitenhek did warn that the challenges ahead mean that banks cannot be successful on their own and there is great value in forming strong partnerships. “Regulation, digitalisation, internationalisation and the speed of change mean we need help. We discovered a few years ago that if we don’t take the help and inspiration from external worlds we won’t live. We need help from the fintechs and innovative companies to speed things up and create a different culture.”
He went on to highlight a few of the ways that ING are collaborating with other players: “We are teaming up in ecosystems with a variety of partners – some of which are outside the circle of usual suspects too, because we need some friction to get good results and to discover the unknown. The way we see it, many people that know a little, may know a lot together. This is how people start getting inspired and we all start moving ahead.”
Demonstrating the scale and fluidity of ING’s partnerships, Buitenhek said: “we currently work with around 160 partners 20 of them are investments made by the bank, others are different forms of collaboration, including short term ones.” He also suggests being bold when partnership arrangements aren’t working: “Sometimes you have to say goodbye, you have to be prepared for that too. It’s important to show that you dare to say goodbye and that it’s OK to make mistakes and come back with another option.”
Outlining one of ING’s biggest collaboration efforts, Buitenhek then shared some details on the dynamic innovation district that the bank are building in Amsterdam, alongside the Municipality of Amsterdam and other partners. The district is one of three geographic hubs the bank is developing – the other two being London and Singapore. The Amsterdam hub is set to have ten thousand people involved, with three thousand of that group coming from innovators and incubators that are non-ING businesses. “The idea is that we develop a place where the brightest minds work together to create the best solutions for all our clients. Our aim is that, within 5 years, the district is a self-sustaining innovation region in Amsterdam.”
In summarising, Buitenhek said that banks need to move away from traditional thinking, towards the idea of networks and more agile ways of working. He highlighted that this change in approach means that ING can now move quickly to adapt to change, something that it is critical in today’s banking world where speed and flexibility are now vital. He also advised that achieving success in Open Banking will is “about transformation, people, culture, and getting the right people, but also the right leadership in place”.