read the 2015 Annual review
Balancing our responsibilities
We have many different stakeholders, all of whom have varying interests and expectations of us. We always strive to weigh the pros and cons to make decisions that are best for all involved.
Transparency and customer confidentiality
It is clear to us that our stakeholders want to know more about where, why and to whom we lend money, and how we see the future of certain clients or sectors.
Yet there is sometimes a conflict of interest between disclosing this information, protecting commercial interests and maintaining customer confidentiality/privacy.
We try here to strike a balance between respecting the confidentiality of our customers and being transparent and responsive to what society and our stakeholders ask of us. The majority of the money that we lend goes to consumers (personal loans and mortgages). We generally do not publish their names, nor those of the companies that we invest in or finance, which respects customer confidentiality and our “duty of care”.
Data protection and innovation
Protecting our customers’ financial information is a priority. Our customers expect it, and it is our legal duty.
Analysing data helps us innovate and serve our customers better. For instance, studying the data from our mobile banking apps helps us improve those apps and the services they provide. We can also use advanced analytics to offer customers products that are most relevant to them.
Data analysis also helps us protect customers. We use an analysis of erratic or unusual activity to identify potential bank-card fraud. And advanced analytics allows us to help customers better understand their financial situation and future financial needs.
Still, there is controversy about the use of “big data”. We strive to comply strictly with all data protection laws and regulations, both in the letter and spirit of the law. We aim to maintain strong safeguards around our customers’ privacy and only analyse their payment data to provide better product offers and services where they give us explicit permission, allowing them to withdraw that permission at any time if they choose.
Innovation and competitive pricing
We have increased the strength of our capital base to protect customers and to contribute to a sustainable financial environment. At the same time, innovative business developments are also important to stakeholders. This is in line with our Customer Promise to “keep getting better”.
These activities require capital. We can increase profitability by raising prices or lowering interest rates, but reasonable pricing of our products and services is also very important both to us and our clients, as we know we must remain competitive. Balancing and reconciling these competing interests is an ongoing challenge.
Sustainability and financing
Our comprehensive and detailed Environmental and Social Risk (ESR) framework sets out a clear checklist when deciding which companies or activities to finance. ING is one of the most sustainable listed banks in the world.
We share the concerns that civil-society organisations have about climate change, human rights, animal welfare, and environmental damage, and we support their request for us to develop policies that take these concerns seriously.
Still, we cannot go as far as some would like. For example, withdrawing completely from financing activities such as oil, gas and uranium mining would affect important linked sectors: the transport industry including freight transport, shipping and aviation (oil), electricity production and heating (gas), cancer treatment with medical isotopes (uranium).
Instead, we prefer to assist our customers to transition to more sustainable businesses. This is one of the core objectives of our sustainability strategy.
Sustainable transitions financed describes all the business that we do with clients that are environmental trendsetters in their sectors as well as projects that supply sustainable solutions. By the end of 2015, this amounted to EUR 23.8 billion.
Remuneration and regaining trust
Remuneration of bank employees remains a sensitive topic as a result of the financial crisis and the support many banks received from taxpayers.
Part of ING’s remuneration policy was updated at the General Meeting of Shareholders in May 2015, following ING’s full repayment to the Dutch State ahead of time for aid received in 2009, and also after new compensation legislation took effect in the Netherlands.
The resulting increase in fixed salary for the Executive Board members was met with criticism in the Dutch media and society, which we recognise and understand. We need to reconcile competing stakeholder views: on the one hand, shareholders and the challenges we face both require us to secure the best talent for our organisation, including our Board. On the other hand, society generally finds compensation for senior leaders too high.
We have been continually reviewing and amending our remuneration policies since 2008 in response to the ongoing review of the financial system, public debate and applicable regulatory developments, and we will continue to do so.
We take a variety of factors into consideration when determining compensation plans, while meeting the twin goals of attracting and retaining the best talent possible as well as achieving the long-term objectives of the company and its stakeholders. With 70% of our business outside the Netherlands, ING cannot afford its remuneration to differ significantly from similar companies for a long period. ING’s Executive Board is currently remunerated well below the standard for comparable international and Dutch companies.