18 February 2020
Mark Buitenhek (ING): ‘Banking is an important part of our work, but I don’t know if I would still call ING a bank’
ING loves to lead the way. According to Mark Buitenhek, Global Head Transaction Services at ING, that is part of the company’s DNA. It is no coincidence that ING was the first bank to introduce the agile working method and online banking, says Buitenhek. The Dutch bank works with more than a hundred fintechs and finance experts see ING as one of the digital leaders among traditional banks.
Their secret? "It’s not about what you do today, but what you can do tomorrow", explains Buitenhek. "Sometimes you have to give up revenues in order to benefit in the long run." He mentions iDEAL as an example, an e-commerce payment system designed by Dutch banks, based on online banking. "The banks had card revenues, but we still chose for the development of a new solution because we wanted to make it easier for consumers to pay. The Dutch banks were willing to make individual concessions. We benefited from this in a later stage."
As a digital leader in a fast-changing financial landscape, Buitenhek keeps a close eye on new trends. In this interview, he explains how ING will continue to develop in the future and how traditional banks can adapt to a tech-driven future. "Banks not only have to choose what role they want to play in the new ecosystem, but also rigorously implement these choices within the company. They have to make hard, but necessary choices."
ING has plotted its course a long time ago. In the near future, the bank wants to operate as a technology platform. To act at the heart of an ecosystem in which digital financial services reach consumers via platforms. Buitenhek identifies three types of platforms on which ING focuses: "First, we want to offer the best solutions by being a platform ourselves. That doesn’t necessarily mean that those products are only produced by us. We could also offer solutions from other banks or fintechs on our platform, simply because our customers want certain functionalities."
Buitenhek: "Secondly, we want to bring customers and suppliers together so that they can trade effectively. In this case, it is not only about the name ING, but we also want to help determine the right direction for our customers. Collaborations with Yolt and Cobase are built on this strategy. Finally, we can also offer our services as a supplier via large communities such as Facebook and Amazon. This is not our preference, but if our customers are active in these communities, we need to be there as well."
Less room for banks
The fact that ING chooses to become a platform player does not indicate that Buitenhek advises all banks to take the same direction. "In a new ecosystem there is less room for banks, so you have to think carefully about whether you want to move on as a product specialist, a supplier of the infrastructure, a platform, or perhaps you want to create scale."
One thing is certain; the importance of technology is becoming increasingly important in the world of finance. This development is reflected in the hierarchy of a bank, says Buitenhek. "The IT department is now equal to the commercial department, something that used to be different in the past. This may seem like a small element, but it is an important cultural change. In fact, I don’t know if I would still call us a bank. Banking is an important part of our job, but technology is the key factor."
Buitenhek agrees that it is an interesting time in the financial sector with all the new developments taking place. One of those trends is PSD2. Buitenhek: "We don’t see many changes yet. That takes some time, but it can suddenly accelerate in the future, something we saw with the adoption of mobile payments as well. The fact that countries have different views on the exchange of data sometimes makes it difficult to fully benefit from PSD2. There are no rules regarding the standardization of APIs as well. These are learning moments, but the European Commission is working on an update."
ING’s Global Head Transaction Services is enthusiastic about instant payments: "We really see instant payments (IP) as the new normal. I’m assuming that everyone in Europe will adopt this payment method, whether or not as a premium service. In the Netherlands, it’s just part of the basic package, but I don’t see immediate problems when the price structures in different countries vary. People in Poland or Italy, for example, pay much more for packages and payment services than we do. It’s a cultural difference."
Buitenhek can talk for hours about the interesting world of finance. About all sorts of trends that will dominate the market, like cybersecurity, cryptocurrency or the relationships between bigtechs, fintechs and banks. Buitenhek: "And what is Europe going to do? Will we really try to overcome cultural differences between countries so we can develop a pan-European payment solution that can compete with giants from the US and China? These are interesting questions, which make one thing clear: we’re definitely not getting bored in the next few years."