Financial Institutions - Ralph Hamers on Disrupting the Banking Industry

Ralph Hamers on Disrupting the Banking Industry

A Conversation with the CEO of ING


Founded in 1991, ING is a global financial services company with more than 52,000 employees in over 40 countries. The bank’s stated purpose: “Empowering people to stay a step ahead in life and in business.” To this end, ING aims to simplify the banking experience, making its services fast, easy, and accessible.

R.A.J.G. (Ralph) Hamers has been with ING for 25 years, becoming CEO in 2013 after a variety of roles in wholesale banking, lending, finance, credit risk management, and retail banking. He designed and is now spearheading his “Think Forward” strategy, intended to make ING the leading digital bank. Since 2013, ING’s share price has sharply increased and growth in both client base and lending is strong—even as many European banks are shrinking.

Hamers recently sat down with Huib Kurstjens, a senior partner and managing director in the Amsterdam office of The Boston Consulting Group. The following are edited excerpts of their conversation.

The banking industry is changing very rapidly. There’s a lot of complexity, consumers changing their perspectives, new regulations every day, new technologies, new players. What are the toughest challenges that you and ING are dealing with right now?

Well, the toughest challenge is generally the one that is the most difficult to act upon, right? Currently, I feel the regulatory environment is the most unpredictable. It’s very difficult to prepare yourself because you just don’t know where it’s going, when they will decide and what they will decide, and there are so many different things that are happening at the same time. When you don’t know what a regulatory change will be, it’s really difficult to change your model in time.

You’ve said you want ING to be a disruptor, to really take charge in the industry and break through these challenges. What does it mean to be a disruptor?

It means that you don’t wait for new players or incumbents to compete with you, disrupt you, or disrupt your model. You take the lead. If you feel there’s an opportunity to disrupt and change your business model, do so. It’s very hard to make this decision as a manager or a leader because, basically, you could be cannibalizing your own business.

Empowering customers is very important to ING. What does that actually mean?

Our purpose is to empower people to stay a step ahead in life and in business. We truly believe that going forward, our retail customers and wholesale bank customers want to take charge of their finances more and more, themselves. If you want to give them a feeling of being in control, you have to make sure that what you deliver is very simple, very transparent, and understandable, and available anytime, anywhere.

For example, you should never offer seven savings products in your banking app because it is very difficult for people to make a choice between seven savings products. You have to limit the choice to one or two that are very simple or very clear.

How do you and your leadership team look outside and course correct as needed, changing elements of your strategy, etcetera?

First and foremost, you have to keep your eyes open all the time. Change is constant and change is happening faster than ever before. You should look closely at the trends that are out there, the new players, and the behavioral changes of customers.

Clearly, banking is becoming increasingly digital. Banking is becoming more of a technology play than a content play, with people who have a lot of knowledge about a specific product. The product is not what differentiates you as a bank, it’s the experience that differentiates you as a bank. Your experience more than ever before is in how you deliver in a digital way, how quickly and easily you can deliver, and how real time the information is, because clients want instant satisfaction. They’re used to that through Facebook, through all of their internet experiences. Instant satisfaction is what is needed.

Now, knowing that, you know that you have to attract more and more talent on the technology side of things.

On the one hand, you want to give people on the front line the freedom to deliver certain things, to better serve your customers. At the same time, there’s the need to standardize, to do things in a similar way and provide the same customer experience across the bank. How do you balance autonomy and alignment?

We want the front-end teams to be as agile and fast as possible, so we start to standardize from the back office forward, standardizing IT and support functions. You need an integrated network perspective to help deliver increased standardization—without losing the speed and the fail-fast mentality at the front end of things.

Is there any advice you would give to other executives in the financial services industry?

Basically, there are two levels of advice. The first is to be outward focused. Make sure that you know what’s happening in the market and what’s happening to your clients. That’s one.

The second is to always go back to your DNA. Don’t try to build something that you don’t have in your DNA because in the end, it will not be successful.