If ING is to be counted among the OAPs of finance then it wears its seniority incredibly well. Whilst other incumbents are breaking hips trying to keep up with the youngsters, the Dutch legacy manages to make innovation seem effortless. When TFT’s Matthew Dove sat down with Benoit Legrand at Money 20/20, ING’s chief innovation officer was happy to divulge the secret to its eternal youth…
TFT: What have you learned from Money 20/20 this year?
BL: I think the excitement is ramping up in the world. A few years ago this was a fintech fair and a couple of start-ups were coming in and the old incumbents were looking and saying “oh, this is funny! We’ve seen this before, it’ll never go anywhere.”
Now you see that people are taking it really seriously. We see a couple of them starting to be quite successful and big. I like the way there are partnerships developing whereby we’re saying, how can we, together, improve the overall situation. I think there’s space for many people and there’s very much space for improvement for the customer.
I find it really exciting for the industry to get this challenge from outside. We can do things differently, reinvent ourselves with the pressure coming from the fintechs and big techs. All the incumbents now need to move and I’m seeing this much more than I did in the past.
TFT: Your promo material states that, “at ING innovation begins with you.” What’s your role in ensuring customer centric innovation?
We have this quote because innovation is a journey and it’s a mindset. It’s not a journey of 100-200 people in
an ivory tower saying “well, you should’ve done this, you should do this, this is a new technology, do that..”
It’s a team at the service of 50,000 people and all those 50,000 people need to innovate themselves and change their mindset.
This is where it starts. With you, with everyone.
Everyone has a share of responsibility and we can’t sit back and say “innovation will do it, management will deliver it.”
No. Everyone has to put different glasses on and move faster, be agile and put itself into question. This is the main mission that we have; get the culture accelerating the change.
We see fintechs, we see big techs, we see whatever techs you have. There’s competition, there always was competition and there always will be competition, so I don’t think the world has really changed in this respect.
We have everything within ourselves, in a bank like ours, to take our future in our hands. We have the engineers and we know banking. We’ve got 50,000 people who’ve been doing this for centuries … The question is; why have others been able to do things better and faster than us?
We had to ask ourselves, as individuals, questions like; why are you still using the same IT systems? Why are you not trying to use another one? Put those questions to yourself and get some movement, change things.
Don’t expect things to happen!
TFT: To what extent are fintechs (Starling, Monzo etc.) leading such an approach whilst the legacies simply play catch-up and what is ING doing differently?
BL: I’ll take it back to leadership…and people. It’s not about having ideas, it’s about executing ideas, ideas that are relevant to customers. These ideas are driven by people and by leadership telling you “this is important!” Walking into the unknown and building the future is something important. Then I’ll ask you in one year “what did you do this year to build the best bank for the coming five to ten years?”
As Ralph Hamers (ING’s CEO) is doing with his team, we’re saying what have you done this year to deliver KPIs, results etc.? He also asks “what have you done to deliver on the long-term strategy that we have in innovation?” It’s then that you start to get a different mindset. People on the board will ask their senior leaders, senior leaders will ask and so on… Then you get the whole transformation moving.
TFT: So it’s from the top down?
Yes, from the top down just to get this mindset but also from the bottom up to make sure we’ve deployed all the different tools which are necessary to get this kind of movement. From bootcamps to labs where we deploy our innovations, to our partnerships with fintechs and the simplified processes that get those partnerships working. Investing, buying, whatever means, it’s all very Dutch and pragmatic! So, top-down leadership is very important i.e. “this is your responsibility” and bottom up, saying “guys, these are the means, now do it!”
This is what I think is a bit different about ING. I’ve tried to put this in a mathematical formula, what we call the innovation power behind an organisation.
You first need a set of three basic elements;
Psychological safety: you need to feel safe to take risks and make mistakes
Flexibility: we want to go to Rome but I don’t know if we’ll go through Paris or Zurich. It will depend on the price of fuel and then people I meet along the way. You need to be flexible in that way but know the direction you’re going in.
Pragmatism: this refers to the 4 or 5 different tools that we have to most effectively build a new customer proposition. Whether I build it myself or I partner with someone or I buy it from somewhere else. It’s about having all the tools and trying them.
That’s the basics, then I multiply this by leadership squared or even to the power of 3, 4, 5 or whatever you want because this is the accelerator of your transformation. If you have this environment but leadership is saying “well, we’ll just do this for the press or for corporate”, then it doesn’t work. If there’s a genuine willingness to do this, then you’re getting the real power of your tool.
Then I divide this by organisational complexity!
You can have this very multi-facetted leadership and the tools inside but you still have 25 people responsible for the same thing and they have to meet 425 times to make a decision. To address this, you really need to speak the language of the organisation. I cannot say “Change!” to 50,000 people, I can ask you what’s important to you, what’s driving you? Is it recognition, is it Euros, is it changing the world? Then, I’ll give you the tools to reach that goal and you’ll say “okay, change is good, I like change!”
TFT: It seems that if you reverse that formula you’re left with what a lot of the legacies have. A problem.
BL: Right, and how do you tackle that problem?
It’s very complicated but also very simple. For instance, I report to Ralph Hamers, right? I’m not reporting to IT, I’m not reporting to one business line, I’m following him. That immediately sends a very strong signal to the organisation about what’s important. It’s not lost somewhere on the fourth level of IT, you know? It’s not an IT problem, it’s a CEO matter.
You can have this very multi-facetted leadership and the tools inside but yet you still have 25 people responsible for the same thing and they have to meet 425 times to make a decision.
It’s easy to do but you have to be very consistent in the messages which you give. So, Ralph says things and it’s important for people within the organisation to see that things that are being said are also being implemented. It’s not always 100% – we’re not perfect! – but at least people can see that we’re consistent.
Say we want to be a platform so we invest in Yolt. Yolt isn’t profitable today, okay. That’s fine because we see this for the long term, we’re investing and we’re building and we know why we’re doing this. Those are the things that make people believe, not a powerpoint, not a speech. Just facts.
It’s basic yet it’s highly complicated to do this every single day without default. You’re building trust so if you derail just a little bit, it will have a terrible impact…
TFT: What achievement as ING’s chief innovation officer are you most proud of and why?
BL: To still be alive after three days at Money 20/20!
TFT: That’d be top of my list too!
BL: But the day’s not over yet!
First of all, I’d say that ING is known and recognised in the market as one of the top innovators. It’s something we’re proud of and it’s a virtuous circle.
Innovation is on the agenda of the bank, it’s not a small detail. We need to innovate so sometimes we’re not very popular because we’re challenging everyone. Still, we keep on doing the job so this is a source of pride.
It’s a really hard endeavour to go against the tide every single day, we’re making everyone miserable! We’re trying new things and moving out of our comfort zone, changing priorities and then getting the boss saying “why haven’t you done this?”
That we can keep doing this for 5 or 6 years in a row is remarkable.
Then there’s Yolt which will be reaching 1 million customers in the summer after two years of operation. I remember 10-years ago I didn’t get 10 minutes of attention for that project. I could say the same about Cobase which is a Yolt for corporates, getting all data from all banks into one cockpit where you can manage all of your accounts … We have 4 or 5 companies like that which are about to scale, there’s an MVP (minimum viable product) and customers like it. Now we just need to inject some fuel in there.
I’d say that ING is known and recognised in the market as one of the top innovators. It’s something we’re proud of and it’s a virtuous circle.
All these points link to one thing, which is consistency over time … This has been the success of ING Direct also. Even through difficult times we said “come on guys, we know where to go, so let’s go!”
We had losses of 900, a bit less than 1 billion, in all those different initiatives in ING Direct but we went on…
Can you imagine what kind of leadership this takes? To swim against the tide and just go for it, 10 countries, 24 million customers. This makes all the difference and it’s certainly not just me!
I’m just one of the elements and every one of those 50,000 people needs to take their own share in it. I have one share, he has one share, you know, we all have one share.
The power and the leverage we can have is with 50,000 people, not the 200 people we have in innovation. Innovation is nothing if it’s not 100% at the service of the organisation.
TFT: What is ING primarily investing in for 2020?
BL: Certainly money management, aggregation and payments. Those are the new battles and over the next 2 years a lot will be settled there. Another one is SME lending which is a very important point of attention. We have trade. Trade is very important to us as it’s a humongous market with lots of possibilities so we’re investing a fair bit there too.
TFT: Where does AI feature in all this?
BL: I get all these questions about AI, blockchain and quantum and I say “fine, but those are enablers.” I don’t care about AI! I care about having a better KYC tool and if it’s driven by AI then fine. My problem is just to improve KYC this is what’s important, not whether we do it on blockchain. Frankly, it’s a means not an end.
We’ve invested in a company called Axion.ai which delivers solutions to traders…this makes sense for customers and it’s AI…fine. It’s about solving a problem which is substantial for a customer.
So there it is, ING’s holy grail – the fiendishly complex made to look effortlessly simple…