Global Fight for Commercial-Banking Customers Goes High-Tech

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ING Bank has made a major upgrade to the online banking services it offers business clients, one that could enable it to better compete against U.S. banks.

The Dutch bank is in the middle of rolling out InsideBusiness, its digital-banking platform for commercial clients. The platform promises to allow its global customers to conduct business easily from their desktops and devices. The idea is for wholesale customers worldwide to be able to access all the parts of their global business from anywhere, William Connelly, head of commercial banking for the $1.1 trillion-asset bank, said in a recent interview.

"It is the holy grail of the wholesale-banking business: to have an infrastructure that is truly global and replicated around the world in all the markets you operate" in one package, Connelly said.

The effort crystallizes several trends, including big banks' efforts to justify the benefits of size in dealing with multinational clients, globalization and the power of technology to open and close competitive gaps among financial companies.

ING's new platform gives it a competitive edge over bigger rivals in Europe and helps it catch up with Wall Street players, said Patricia Hines, a senior analyst of corporate banking at Celent.

"If you think about the global banks working from North America, this is something they already have," Hines said. "If they are going to go up against BofA, Citi, JPMorgan and Wells Fargo, they've got to have what they've got and maybe that is why we see this innovation."

The portal has essentially five functions — payments, cash management, foreign exchange, lending and a service center for things like confirmations and agreements. Right now, customers can manage mass payments, see a total liquidity view based on all their accounts and fund flows housed at ING, do basic hedging and monitor bilateral borrowing with the bank.

ING is planning to flesh out the functions gradually, said Marnix van Stiphout, its global chief operating officer of commercial banking.

"It is a journey — started with the rollout three or four months ago and will continue for the next two years when we plan to have a global reach with all of our customers migrated onto InsideBusiness," van Stiphout said.

The company is testing the product in the Netherlands with 60 customers and will extend that to Belgium over the next couple of weeks, van Stiphout said. It is targeting the end of the summer for all of Europe, and Connelly said the full launch is scheduled for the spring 2016.

When fully phased in, a "U.S. treasurer would have access, fully secured, through his iPad to all of his accounts around the world and he could transact from the head office," Connelly said. "If he wanted to draw down on a money market facility, he could do that from here. If he wanted to make a foreign exchange payment, he could do that from here. And he could do it across all the product offerings that ING has."

The product coincides with the company's efforts to grow its U.S. commercial banking business. Van Stiphout said the product would highlight the company's international reach.

For example, "this really is going to get our U.S. client base to look at all they do with ING. Maybe they're doing cash management in Europe or have something in Asia," van Stiphout said. "This opens up the globe to our clients and is a massive step forward for us."

Celent's Hines said the product is a major advance for ING in Europe and globally.

"I'll say given where they are in terms of asset size and where they are based geographically — not in the U.K. or Germany — the offering is very substantial," Hines said. "For the most part, in the U.K. and continental Europe, their biggest competitors don't have an integrated suite of products."

Deutsche Bank is one of the exceptions in Europe, Hines said. A few years ago, Deutsche began rewriting its corporate banking applications in small pieces, app-store style, and posting them to what it calls the Autobahn App Market. It is one point of entry from which clients can manage cash, make payments, pull reports and perform other corporate Treasurer duties. With $2.1 trillion in assets, Deutsche is significantly larger than ING.

Still, ING has been considered a digital pioneer with its ING Direct consumer banking business. Van Stiphout said the company leveraged its expertise in the retail business in building InsideBusiness.

"We have a pedigree of innovation in retail technology, but we have been less active in this type of development in wholesale banking," van Stiphout said, later adding that the product was built internally. "We have a lot of product experience and are well positioned to build market-facing structures ourselves."

The platform is a mixture of responsive design and native mobile applications.

The company is using one shared global customer data warehouse. Van Stiphout called that feature one of the most important things because it "makes sure that we are doing the right thing across the global footprint."

The portal is part of a larger effort to overhaul and streamline ING's global commercial business that started in 2012. Given that most large banks have been cobbled together through mergers, many are running off several systems. Connelly said the company made the decision to undergo the massive undertaking to consolidate everything.

"We, in effect, made the decision in 2012, to take a step back and standardize our commercial banking infrastructure everywhere in the world. So, if you're going to do something in trade finance, anywhere in the world with ING, you use the exact same application. Any time you make a loan it goes off the same system. We have the ability to manage data across all the borders and areas we operate," Connelly said.

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