ING changed its historic offering at the beginning of September. Frédéric Niel, director of ING's online banking in France, explains this choice to us.
Frédéric Niel © ING
With a million customers to its credit and 20 years of experience in the French market, ING is a key player in online banking. After announcing a free and non-binding plan at the end of 2019, the bank changed the conditions of its premium plan (Integral) at the beginning of September. We had the opportunity to discuss with Frédéric Niel, Director of ING's online banking in France, on bank news.
Lemon squeezer: In 2015, ING celebrated the milestone of one million customers. Today, 5 years later, you are still communicating on the same figure, while banks like Boursorama Banque or N26 are showing multi-digit growth. Can you come back to the bank's strategy over the past few years?
Frédéric Niel: Today, our strategy is that of customer engagement, that is to say to have customers who use the bank, who consume the bank and who are satisfied with the experience.
What matters to us is therefore the number of customers who are engaged with ING – and not the total number of customers. This last figure does not mean much, and it is sometimes far removed from the reality of the situation. Having a few hundred thousand more customers – who wouldn't use the bank, that would be good as an announcement effect, but that wouldn't be of interest to us, who need customers who are engaged on a daily basis.
Have customers who use the bank, who consume the bank, and who are happy with the experience
Between 2015 and today, the vision of ING customers has fundamentally changed. Over the past few years, the number of engaged customers has increased by more than 10% per year, and that's what matters most to us.
Lemon squeezer: By changing your offer, how has your clientele changed?
Frédéric Niel: ING launched in France in 2000 with a single product – the Livret d'Épargne Orange (LEO). We built the first phase of growth on this product before diversifying into the stock market, life insurance, current account and more recently into mortgage and consumer credit. With this strategy, we were able to attract more “engaged” customers as we were able to meet customer needs more fully.
By following this method, it also allowed us to diversify our sources of income. Until 3 years ago, we had almost 70% of our income which came from deposits. Today, they only represent 40% of our income, the rest coming from our other activities. We prepared for this transition even before the rate cut, so we are much less penalized by low rates.
To give you a relevant figure, a quarter of our clients are today in primary contact with ING. They use their bank card almost every day, they consult the site or the application on a daily basis, and they have a high level of monthly deposits. These customers interact with ING on a daily basis, and we develop an intense and lasting relationship with them.
Lemon squeezer: Are the French ready today to subscribe to more complex products directly on the internet? Can they do without a physical relationship with their bank advisor?
FN: There is a trend that has been clear for years, it is the acceleration of the digitization of banking uses. This phenomenon has been increased tenfold with confinement where consumers have not hesitated to turn to more complex operations, directly on the internet. Today, there is no longer any obstacle to taking out a mortgage on the internet, saving large amounts on life insurance or placing money in a title account.
ING and several other online banks have been able to improve the customer journey for more complex products, which has helped amplify this movement. For their part, customers have also become familiar with digital uses and are more able to use their computer or smartphone for certain operations.
It is therefore quite relevant today to offer a complete digital offer – which is not yet the case for all online banks and even less for neo-banks which focus on everyday services ( current account and payment card overdraft without note). Today, a consumer can find an answer to all of their needs, 100% online.
That said, our clients always have the possibility of turning to an advisor available by phone and specialized on a theme: mortgage, financial savings etc. Some consumers need reassurance and this is a service to which we are extremely attached. There is no question of excessively reducing the number of advisers to replace them with robots – especially when it comes to times that are emotionally strong: the purchase of real estate, the opening of a contract life insurance etc.
Lemon squeezer: In 2019, you released the Essential formula, free and without obligation. Doesn't it go against the philosophy of the “engaged” customer?
FN: The Integral formula is our core range, it has already been in place for a long time and we have continued to enrich it over time. That said, some consumer profiles cannot meet the engagement criteria of our Integral offer for different reasons: they have random income, they want to control their budget, etc.
It is to meet all these expectations that we have created the Essential offer. With this formula, consumers will never be overdrawn, they will not have any additional bank charges and they will not have to pay a minimum amount into the account every month.
This Essential offer is certainly less rich than the Integral offer (lower limits, no overdraft authorization, immediate debit card editor's note ), but it still offers all the advantages of an efficient bank card, which can be control and that can be personalized from your smartphone.
It will give these consumers the opportunity to test the ING experience, to measure the professionalism and the quality of service compared to another bank – of which they are also clients. This engagement is different, the process is longer and consumers will engage gradually. However, the strategy is the same, and it is unique. The launch of this Essential offer was a great success and today, 1 in 2 customers comes from this free and unconditional offer.
Lemon squeezer: Is the client of the Essential formula intended to migrate to the Integral offer over time?
FN: A customer can continue to favor the Essential offer over the long term because it meets his desire for security. This does not prevent him from taking out a mortgage, taking out life insurance or means of payment insurance – and thus becoming more involved with ING. A client of the Essential offer does not need to migrate to the Integral plan to be hired with us.
Lemon squeezer: The Integral formula was already more demanding than other premium offers from the competition. At the beginning of September, you increased the contribution from € 5 to € 10 per month for customers who do not want (or cannot) pay the € 1,200 per month to ING. What is the logic behind this decision?
FN: Let us take up the complementarity of two Essential and Integral offers. The customer has the choice of not paying any fees (by opting for the Essential offer) or he can choose the Integral formula while respecting the conditions to be completely free. It is only in the event that he opts for the Integral formula without conditions that he will pay these costs.
This is a very specific case, and there are two possible scenarios: either it is an offer that does not correspond to him, and he should instead consider the Essential formula. Either this is an offer that suits him, and he accepts the price – which he deems fair. The objective is not to add costs, but simply to enrich the Integral offer.
At the beginning of September, we added free card transactions carried out abroad following extremely strong demand from our customers. The strategic choice was made before confinement, we made the choice not to postpone this decision. We have also integrated the “payday cash” option, which gives our users the opportunity to benefit from cash if they lose their card anywhere on the planet, in less than 2 hours. This is a service that was billed 95 euros per transaction so far. We have chosen to integrate this option into our offer so that it is one of the best premium offers on the market, with a Mastercard Gold card.
Lemon squeezer: ING has still not announced the launch date for mobile payment, an alternative to the bank card which has been very successful since the confinement and the barrier gestures. Where are we ?
FN: I can confirm that we will be launching Apple Pay during the second half of 2020, but the launch date is not yet known. This is a joint Apple and ING launch, we will communicate on the exact date later. I took my job a year ago, and integrating mobile payment into our offering was the first decision I made.
Apple Pay is growing more strongly than Google Pay, so it made sense to start with Apple Pay. We intend to launch Google Pay in a second phase, that's how we work. We also did it recently on the mobile app, starting with iOS, then Android. Our clientele is fairly balanced between the 2 operating systems, they each represent around 50% of our audience.
Lemon squeezer: Besides mobile payment, what are ING's plans for the coming months?
FN: We will continue to expand our consumer credit business, by easing the eligibility conditions for our customers. We will take better account of the length of the relationship with ING to allow more customers to be able to take out such a loan. Having said that, we will first work on our existing clients before moving on to non-clients of the bank.
We also have several projects underway around budget management, personalization and optimization of account management. These are functionalities that we are in the process of reworking, and it is a very strong axis of the development of our banking services.
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