It’s the law of the jungle: only the strongest survive. In the highly competitive financial services sector, adaptation is everything.


And if you’re not investing in innovation, you might as well be planning to fail.

Australian fintech investment more than tripled last year but that’s still not enough to meet growing customer demand for innovation, according to ING Direct’s Manager of Digital Innovation and Emerging Channels, Jonah Cretser-Hartenstein.

“There’s still so much opportunity,” he says. “We have the tools and the capability and the controls to be able to innovate and to push the boundaries, while doing so in a safe and stable manner,” says Cretser-Hartenstein.

Fintech investment in Australia rose to $US656 million in 2016, up from $US185 million the previous year. However, that ran counter to global fintech investment, which fell from $US46.7 billion in 2015 to $US24.7 billion last year.

“I don’t think that there is a bubble,” he says. “There’s a lot more talk than actuality, but I don’t think that’s because of hype, I think that’s because it’s coming. If you look globally at the amount of funding that’s gone into fintech in relation to the amount of money that’s being invested and profits that are being earned by incumbents, if anything we’re under-invested.”

Viewed through this lens, the fast rise of fintech is about an industry playing catch-up. The pace of change in other industries has been faster, and now there is a rush of activity as financial services look to meet customers’ increased expectations.

“Anywhere we’re seeing the industry not necessarily able to move at the pace of consumer demand or at the pace of the technology that’s able to support it, then we’re going to see innovation,” Cretser-Hartenstein says. Translating those innovations into commercial success requires a careful balancing act between customer readiness and technical capability.
That’s why effective engagement is essential.

Mobile banking driving customer satisfaction

ING Direct uses an internal approach that combines the innovation disciplines of design thinking, lean startup and agile. Central to this is a continuous feedback loop that occurs through concept development, prototyping, refinement, and post release.

“It’s good because it’s a human centred process, about how do people interact with the experiences that we put in front of them and how do we make those better,” says Cretser-Hartenstein. “We really try to put ourselves in the customer’s shoes and create empathy for what they’re experiencing and how a change will impact them.”

And the average ING Direct customer is hungrier than most for innovation.

While the bank’s customer base is broad, there’s stronger than usual demand for mobile banking and payment technologies.

It’s something customers expect from a bank that has positioned itself as a challenger since it first entered the Australian market in 1999. “Being a digital bank and a direct bank, our customers know that’s where we’re going to be investing – we’re not spending our time and energy refurbishing old branches,” says Cretser-Hartenstein.

Mobile banking is playing an increasingly important role in overall customer satisfaction levels across the industry. Research shows customers are now banking on their phone or tablet more frequently than visiting branches, with Australians using mobile banking more than their counterparts in the US, the UK and Canada.
Once customers understand that it’s safe, they really gravitate towards things that give them greater convenience

Innovation is insurance against an uncertain future

ING Direct, which previously used a cashback incentive for customers using their cards for contactless payments, has also been an early adopter of mobile payment platforms such as Android Pay and more recently Apple Pay, which they launched in February.

“It’s a recognition that mobile payments are something our customers are definitely interested in doing,” says Cretser-Hartenstein, “You can’t push against your customers at the end of the day, and we believe that investments like these that enhance our customers’ experiences will in the long run make us both successful.”

Reducing the friction for customers is a consistent theme in how ING Direct identifies and implements new services. Those services will be supported by a completely updated online banking platform that the bank launched last year.

Having ongoing dialogue with customers can also increase their receptiveness to trying things that might otherwise be outside their comfort zone. That was the case several years ago when the bank introduced a feature enabling customers to check their account balance online without logging in.

“Customers were initially a bit wary but once they interacted with the feature and saw the benefits, we had a much higher uptake after launching than we’d originally predicted,” says Cretser-Hartenstein. “That gave us an insight: once customers understand that it’s safe, they really gravitate towards things that give them greater convenience. As a result we’ve doubled-down on this capability, expanding it to widgets on mobile and an Apple Watch app.”

But developing a dynamic and resilient culture of innovation takes consistent effort and time – it’s a constant process of evolution. The players who can deliver stand to emerge the fittest in the race for customers’ business.

“From a corporate perspective, innovation provides us with an insurance policy against an uncertain future,” observes Cretser-Hartenstein, “It’s a way for us to explore the different directions that technology, consumers, or even competition make take, and build our knowledge so that we can move in that direction very quickly if we identify something worthwhile.”

Customer expectations are constantly increasing as people seek smart banking solutions that keep pace with their lives.

A single revolutionary change isn’t enough to guarantee survival in this constantly changing environment. Evolution is a constant and unstoppable force, and one that provides the companies which have the agility to rapidly adapt with a crucial competitive advantage.
This article represents the views and opinions of the author and do not necessarily reflect the opinions of BPAY.
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