ING: Growing Into a Global Banking Giant - Essay Sample

Introduction

Within a few years of its institution, ING rapidly stretched its array of activities through an amalgamation of chains of acquisitions and natural growth. ING advanced into a big cosmopolitan business providing banking services in over 40 countries while offering employment to approximately 54,000 people globally by 2016 (ING Bank, 2018). ING is committed to achieve sustainable progress and empower its customers to make profound financial resolutions.

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The bank defined its broad objective as empowering its customers to make well-versed economic decisions. The general purpose was set in four specific goals, including:

• Enabling - meant endowing clients with appropriate information regarding their preferences and related implications.
• To be smooth and precise- this mirrored ING's effort to save its customers' money and time through providing precise products, simple processes and fair pricing using plain language

To keep getting better- reflected the bank's commitment to making life easier for its clients with new ideas, strategies, solutions, and improvements.

Anytime, anywhere- correspond to ING's dedication to taking services to the location of their customers and the ability of customers to access the services at their expediency.

SWOT Analysis

ING's imperative strength is its branding. ING is a renowned brand with affirmative recognition from clients across several nations (ING Bank, 2018). ING also takes pleasure in its established liquidity and capital situation, as well as its reliable operating and financial performance. Moreover, ING enjoys the omnichannel distribution strategy and its investment in digital platforms, which have seen its number of clients growing as well as acquiring valuable experience in digital banking.

A weakness realized in ING's operations is its reliance on interest revenue. The bank requires more dexterity to compete with new entrants and to remain relevant and lucrative in the future. Further, due to its multinational nature, ING has to deal with changing client necessities and regulatory environments. Adjusting to these discrete conditions is a costly expense in ING's operations (ING Bank, 2018).

Improving customers' experience with its banking services would be an excellent opportunity for ING to grow quicker than the market growth. To provide client experience differentiation, ING needs to capitalize on its early familiarity with digital banking and its big operation scale to invest in new digital technologies (Dyson, 2014).

A significant threat for ING is further digital disruption exposing the bank to cybercrimes. Further, the bank has to deal with new entrants' competition like the fintech. Moreover, ING started operations at a time when the regulatory environment was complicated, and the financial sector image was an unfavorable image in many countries, thus intensify the risk of execution.

Key Business Metrics

Sturdy client contentment ratings and steadfast dynamic increase in client numbers are indicators that ING remains relevant to clients in a rapidly evolving banking market. In 2018, retail clients improved by one million to 38.4 million, whereas primary relationships increased to 12.5 million. Clients graded ING at the first rank in seven of its 13 retail markets in net promoter scores (NPS) (Pisani & Fodor, 2018). Consistent profitability can be attributed to enhanced lending trade at flexible margins, and expansion of fee income, diversified lending span fragments, and layouts. Industry-leading businesses, comprehensive banking, and increased transaction services activities led to significant improvements in lending revenues and fees. Moreover, new innovative schemes that add customers' worth, including investment alternatives that provide substitutes to low-yielding savings, added to the enhanced commission proceeds and fee in ING's retail selling (Pisani & Fodor, 2018).

Financial Performance

With reference to retail banking, ING's net profit in 2018 increase by 2.6% to EUR3,452 million compared to EUR3,363 million realized in 2017 (ING Bank, 2018). The underlying profit prior to taxation rose by 2.5%, making EUR4,841 million, attributable to the higher income, which offsets higher risk cost and the slight increase in expenses (ING Bank, 2018). Underlying revenue increased by 2.3 basically as a result of elevated revenue in growth markets and the challenges in the retail business. Client lending at the end of the year improved by EUR12.0 billion to EUR408.4 billion compared with the opening balances at the beginning of the year (ING Bank, 2018). The cost to income ratio improved from 56.9% in 2017 to 56.3%, while risk costs increased from EUR391 million in 2017 to EUR457 million (ING Bank, 2018).

As regards wholesale selling, ING reported excellent results in 2018 ascribed to sustained net mainstay lending regardless of intricate fiscal markets that were challenging the entire industry. Net profit increased to EUR2,055 million owing to the reduced tax rate created by the corporate tax reforms in the US and Belgium. The underlying revenue in the financial market prior to taxation dropped to EUR-40 million from EUR82 million in 2017 (ING Bank, 2018). The decline was attributed to low proceeds impacted by small customer activities and unfavorable market conditions. The total underlying revenue of Wholesale Banking dropped to EUR5,781 million in 2018, a 2.4% drop from 2017 (ING Bank, 2018).

Recommendations

Digitization, competition, and changing client needs are swiftly influencing the banking industry as clients become accustomed to new, digitally enhanced, and friendly banking experiences. To achieve its objectives and keep up the excellent financial performance, ING should undertake to implement the following recommendations:

• Improve client experiences with the bank through relating to them by way of their habits and needs using social media platforms where most of the customers can be found
• Deal with entrant's competition such as fintech and at the same time learn from them

Acknowledge the primary role of innovation and technology in the present and future of the banking sector. ING should recognize that banking is no longer a content play. Instead, it has evolved into a technology playmaking convenience of service delivery, the critical factor for differentiation.

References

Dyson, R. G. (2014). Strategic development and SWOT analysis at the University of Warwick. European journal of operational research, 152(3), 631-640.

ING Bank (2018). ANNUAL REPORT 2018.

Pisani N & Fodor V. (2018) ING Bank: Facing Digital Disruption