Innovation
ING Direct started off its business in Canada in an innovative way. The company offered much higher rates of interest (up to 3%) for its savings bank account holders than what was being offered in Canada by other banks. Customers could open accounts and do related activities through the internet or telephone. A new concept of banking in café’s over a cup of coffee was introduced by the bank where customers can consult with a qualified banker. They did not charge any service fees and did not insist on having a minimum balance.
Low operating costs: In effect the bank operated without branches and ATM’s. Opening accounts was through the internet or through telephone. ING Direct simplified the concept of banking because they encouraged only savings accounts and few mutual funds. For regular service accounts, people had to depend on other banks. Facilities for transfer of finds between ING accounts and other banks were facilitated to for maximizing interest rates All these helped the bank to reduce its operating costs which was just one third of costs incurred by other banks.
Marketing campaigns: ING Direct uses TV commercials, internet ads, outdoor ads and regional promotions to advertise their services. Its internet ad campaign had won the Best Response Award and the annual @d:tech awards in 2002. Giving free cinema tickets and gas and asking the recipients to open accounts with the bank with the amount saved were some of the other innovative direct marketing techniques used. According to its CEO Arkadi Kuhlman, ING Direct operates like Walmart by offering products at low price every day. The company’s primary color is orange, the color of the Dutch monarchy stands out from the typical blue and green colors used by other banks.
Technology
ING Direct introduced mobile banking using WAP technology in 2007. The company uses multi-layered security systems for its customers while using the net. “To enroll on the log-in system, ING Direct customers are required select an image from a library and create a personal phrase, which they will recognize when logging into their accounts. When a customer logs in after enrollment they are asked to answer two of the security questions and view their image and phrase so they’ll know immediately that it’s safe to enter their log-in PIN”. Such features help to boost customer confidence in the company’s system.
Transition
ING Direct started in Canada offering banking services through the internet. So in that sense, the company did not have to undergo a transition to the web. History of ING Direct: ING Direct first started operations in Canada in 1997. The Company is a part of the multi national ING Group based in the Netherlands. At that time the banking industry in Canada was dominated by a small number of large banks. All banks were following the same strategy of offering low interest rates coupled with high service charges. ING Directs was introduced to the Canadian public in an innovative way. The catch line of its opening advertisement was “We are New Here”. It clicked with the people and a banking success story was born.
Challenges
The company has now started facing competition from other banks. Since it follows an innovative, but simple strategy it can be easily copied and banks like HSBC and MetLife owned company. Finding employees suited to its work culture may also pose a challenge. Another area of concern is merging its rebel image to being a part of the traditional ING Group. Internet security which is troubling e-commerce providers worldwide is also a problematic area. So too is its strain on its present infrastructure due to its phenomenal growth the past decade. Even though the company has low attrition rates and have been able to find good employees it might find to difficult to sustain it in the future. The way ahead is to maintain its quality of service and invest on software so that it can handle the present and future requirements. It has innovated in the past and needs to do so in the future to stay ahead of its competitors.