ING-DiBa: University Talk of the Cost-Income-Ratio Leader

Dear Reader,

this post is the essence of 2 talks by an IT manager and a customer manager of ING-DiBa.

I will describe the key points of the IT Talk (my techy heart ;)

• Strategic goals: best quality/price ratio products (Sub goals: cost-efficient, convenient, few high quality products, trust & high quality customer relation)
• Direct banking: the website is the branch bank
• few product: fewer processes which could be optimized as much as possible (its like assembly line production)
• Flexible information system architecture
• Have a Life Cycle Process for big IT changes, small changes via change-requests.
• Low Time-to-Market for Features (6 Month)
• 1 Production System,  7 Testing Systems
• 7 Testing System: Development for different software releases
• IT Security on all stages of the development (from source code check to black box penetrating)
• Quality Management: Before the new software becomes public the implemented features are tested multiple times through the development and deployment
• Complete visualization of all servers: therefore machines could be switched easily between testing and production (eg. for peak load)
• The IT infrastructure is self operated (not outsourced; 3 data centres) 
• the whole software system consists of modules
• the modules should be as independent as possible from each other. A module dependency break will lead to huge development costs, because depended module needs to be fixed. Therefore modules and database schemes should be downwards compatible. Event communication between modules possible but event de-/serialization might be expensive.
• Module versioning is a major challenge
• Module deployment should be as automatic as possible. Modules select their right version themself
• Buy core bank software from Atos (juristic reasons; save costs for regulatory changes)
• Develop customer related software on their own. (Dealing with the customer is their core competence; make instead of buy)
• The basic software is standard software, mostly open source (Red Head Linux, Oracle DB, JBoss, ...)
• Do not be technology leader, be second (lower risk)
• Programmer teams are functional organized, therefore the programmer understands the needs of departments (low overhead since less extensive technical specifications; Programmers could not easily switch to projects of other departments)
• Future: Add technical oriented programmer. These programmers could be assigned to project independent from departments. (Flexible allocation of programmers to project; extensive technical specifications)
• 300 - 400 IT people; IT produces 10-15% of total costs (high cost ratio among other banks)

Customer Talk:

• Website is the most important thing for direct banking
• Most bank organizations are mostly functional, therefore lacking process orientation and process efficiency. Look on bank websites: too much and unstructured information means a lack of balance between departments.
• Always test user acceptance of the website and new features
• Customer consultation is a major challenge
• Test new features with customer, before it goes online
• If a feature is not fool proof, the service centre (call centre) gone burn (costly)
• Concentrate on few products -> provide best quality with low cost through efficient processes
• Customer orientation with high service degree is key for direct banking
• Sponsoring of social activities: Most effective viral marketing tool  (1000€ for 1000 clubs)
• Certifications and their display on the website directs to more new customers
• Make the website simple and usable, no information overkill (bigger fonts, few foot notes, only as much information as necessary)

In comparison with the private banking business model of Deutsche Bank and Commerzbank, ING-DiBa with its few products (= few processes) approach could leverage the advantages of IT system much better (efficiency and flexibility) than the many products (= many processes) approach of her competitors. If I am fair Deutsche Bank and Commerzbank have branch banks, where customers might demand a broader product portfolio than customers of direct banks.