Now he’s in limbo, waiting for Scotiabank’s $3.1 billion acquisition of the Dutch-owned bank to be completed.
Announced in August, the deal should close by the end of December if the Competition Bureau, Office of the Superintendent of Financial Institutions and Ontario Securities Commission give their approval.
So, what’s ahead for ING’s 1.8 million customers? As part of that group, I’m also wondering what will happen.
“It’s business as usual,” Aceto told me at the Yonge St. café across from the Eaton Centre, where drop-ins are welcome for a chat about ING products or just coffee and pastries. (Profits on food are donated to charity.)
“We reach 10 per cent of Canadian households today. We think 30 per cent of households would feel comfortable with a bank that has no branches.”
ING Direct started with telephone banking and went on the Internet in 1999. As a challenger to the mainstream banks, it offered higher interest rates and a more customer-friendly attitude.
Its current rates (1.35 per cent on investment savings) don’t stand out much any more. The slogan, “Save your money,” is gone. The new mantra is “Forward banking.”
The bank’s $30 billion in deposits made it attractive to bigger rivals when its cash-strapped parent was forced to sell it.
ING has succeeded in other areas, such as mortgages. It’s Canada’s seventh largest mortgage originator, with its no-haggle rates and 25 per cent annual prepayment privileges that let clients become debt-free more quickly.
This year, it started offering a home equity line of credit. Customers said they wanted a mortgage and credit line at the same time — and would leave if they couldn’t get them.
“We don’t push them,” Aceto says about the home equity loans. “And we have no debit cards attached, so you have to soberly transfer money to a chequing account first.”
ING’s corporate culture is based on values, such as a strong belief in savings as a cornerstone of financial health. It still offers no credit card, but hopes to launch one next year.
In a survey, 40 per cent of customers said they’d take an ING credit card if they could get one. But many employees felt credit cards encouraged people to spend more and save less. They weren’t part of the “orange brand.”
ING launched its first chequing account, called Thrive, 18 months ago and has 160,000 users. It’s opened tax-free savings accounts for 850,000 clients. It manages $800 million in assets with its Streetwise Fund index product. And it caters to businesses with Canadian and U.S.-dollar savings products.
“Canadians don’t realize that ING Direct was created in Canada,” says
Aceto, 43, who was hired as a legal counsel and moved to the United States to launch the bank there before returning as CEO in 2008.
“There are now eight ING Direct operations worldwide. We stayed true to the direct model over the years, when there were a lot of temptations not to. We’re unique and different.”
Meanwhile, the big banks are moving away from the full-service model. Much of clients’ banking is done online, while banks use their branches to sell investments and offer financial planning advice.
“We’re becoming mainstream, not niche. That’s what Scotia saw in us,” says Aceto. “We’re positioned for the future.”
Though he has no contractual obligation to stay once the deal closes, he’s been asked to stick around. Scotiabank wants to keep ING as a distinct entity within the bank.
Will ING retain its upstart attitude and values-based culture? We’ll know in a few years. But we do know one thing for sure.
The little branchless bank transformed the business. And there will be others to take its place if clients feel a need to switch.
Original Article
Source: money ville
Author: Ellen Roseman
No comments:
Post a Comment