Keeping WITH THE TIMES
Seeking to be the alternative to traditional banking, ING stays focused on its customers and their needs, especially in terms of digitalization.
ING has been leading the sector in Spain for 22 years, standing out as the first digital bank. Can you elaborate on ING’s evolution in Spain?
ING launched in Spain with its Cuenta Naranja, or Orange Account. Our mission was to make the difficult easy and make it possible to receive payments from one’s very first euro without the need to switch banks. We have evolved, but we have continued to maintain that close relationship with our customers. Our evolution has been from telephone banking with a single product to today, where we offer a comprehensive service to cover all our customers’ needs. Our purpose is to “empower people to stay a step ahead.” In short, we aim to help and encourage our customers to fulfil their dreams.
How do you maintain freshness and that distinction with respect to traditional banking?
The key is to stay focused the customer and their needs. Product creation, transparency, and simplifying processes are all tools that help us achieve this goal. Assisting customers in managing their finances is a distinguishing factor. Between 2016 and 2020, we set the growth of our customer relationships as our goal and sought to become their primary bank. In addition, we personalize customer service. Of our 450 million digital contacts, 25% are personalized, and our target is for this figure to reach 100%. We are always available to help when the customer needs us. Via mobile, sales have increased from 24% to over 50%.
98% of your customers are digital and, of those, 40% only use their mobile phones to interact with the bank. How do you see your customer base evolving in terms of digitalization?
There are two tendencies here. First, digitalization, where customers are raising the bar and expecting more from us. Currently, what we see as a differentiating trend is customers who solely use their mobile phones for banking, and we are thus developing our ability to generate sales via mobile. It is not just about launching an app, but also managing processes, maintaining communication, and so on. Naturally, expectations continue to rise, and we ensure we always work to stay ahead of the curve.
Net profit in 2020 reached EUR85 million, which implies a drop of 54%. However, the NPL ratio stands at 1.08%. What is your assessment of 2020 and why do you have such a low NPL ratio?
2020 was an unprecedented year. We have observed the resilience of our business model, in that COVID-19 has had a harsher impact on some of our customers. Nevertheless, we managed to maintain our revenues, with just a reduction of 4%, due to the increase of diversified sources of income such as investment, insurance, and consumer loans, which in just four years have gone from representing 26% of income to the current 44%. We have been able to make provisions as a result of prudence. In terms of individuals and as a digital bank, our customers have not suffered due to the pandemic, given that they have had access to all of our services on a normal basis. We have gained solidity and future projection through sales, closeness with our customers, and the undisrupted way of managing the pandemic. Nevertheless, many people need to work with a digital bank that can meet their needs. Over half of our customers come through recommendations. In 2020, we signed up an historic number of 200,000 new customers.
How are you managing your customer acquisition strategy?
Simply, we are being transparent with our offer. We have no small print, and recommendation makes a major difference. In terms of NPLs, our first customers were savers with an extremely low-risk profile. In 2008, when I was chief risk officer, we launched pre-approved quotes, which today remain as the standard quotes. We know our customers extremely well, and we have always acted in an entirely risk-conscious manner. Another important purpose is the financing of our customers.