The Google Banker

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19 May 2017

Influential German newspaper Süddeutsche Zeitung has published an elaborate profile of ING CEO Ralph Hamers.

This comes just a week after Global Finance magazine featured a Q&A with him. Both articles stress ING’s commitment to digital in the retail and wholesale banking segments and the bank’s aim to converge to a single platform for financial services that will deliver a uniform customer experience across borders. The Süddeutsche Zeitung even went a step further, portraying Ralph as ‘the Google Banker’.

Süddeutsche Zeitung interview

Below is the complete translated version (in English) of the Süddeutsche Zeitung article, published on 16 May 2017.

[Translation from German into English]

The Google Banker

16/05/2017 | Süddeutsche Zeitung

Ralph Hamers is the youngest CEO the Dutch financial group ING has ever had. In positioning ING as a digital bank, he is making radical cuts to the organisation, occasionally crossing boundaries while doing so.

By Pieter Couwenbergh

Munich – "Hi, this is Ralph." His face is very close to the camera, a proximity favoured by YouTube stars when filming themselves. Calm and relaxed, looking straight into the lens, Ralph explains to his online viewers on the ING website why he is at a digital conference in Munich. And then he explains his mission: going forward, customers should be able to make better financial decisions. “That’s why we’re here in Munich.”

All the same, Ralph is no YouTube star; he’s a bit too old for that. On the other hand, he’s quite young to be heading a bank: he caused quite a stir in the Netherlands in 2013 when, at the age of 46, he became CEO of the ING Group. When it was time to appoint a successor to CEO Jan Hommen, rather than selecting an experienced 50-something, as was usual in the banking sector, the Supervisory Board appointed the completely unknown local CEO of ING Belgium.

Ralph Hamers was, at the time, the youngest group CEO in the history of ING. With more than 52,000 employees, a balance sheet of 845 billion euros, and branches in over 40 countries, this bank is one of the largest financial institutions in Europe. And, with its eight million customers, direct bank ING-DiBa is the third biggest retail bank in Germany.

No tie in sight, Ralph often arrives at work in jeans and a T-shirt – even when he’s scheduled for a meeting. The fact that he does not look like a typical banker is no coincidence: it’s his commission. The Supervisory Board wanted to send a signal with this appointment. After the financial crisis, during which ING twice accepted state aid and was forced to prune the business – especially in the USA, where the bank had lost a lot of money – what was needed was a young, fresh face. And that was Ralph Hamers, a person who could rebuild the bank in these digital times, and do so with full commitment. The Financial Times once called the ING top dog the “Google of Banks” and, ever since, he has treated this label as an honorary title.

That's not to say that Mr Hamers is not a banker. He started his career at ABN Amro, moving over to ING in 1991. There, he learned not only about the financing of large corporations, but also all about retail banking, and he became the local CEO in Romania, the Netherlands and Belgium. “He knows all sides of the banking business,” his predecessor in Belgium said about him.

Ralph Hamers was born and bred in the Catholic south of the Netherlands, in Simpelveld, the location of a former monastic community. He still works according to the Christian principles he learned in his younger years, he explains. Since his parents' death, his brother Frank has become even more important to him – as a “compass”, as he puts it. “To keep me focused on what is really important in life.” Frank Hamers is the general manager of the Diocese of Roermond in the family’s home province, where he is responsible for all non-ecclesiastical matters. Their parents were by no means rich: their father worked in the state-owned mines, while their mother took care of the household.

Even though, in public, Ralph Hamers likes to say that money is not one of the important things in life, colleagues say that his own financial situation matters to him a great deal. In late 2014, after just one year as CEO, he asked for a hefty pay rise of around 30 percent – a sensitive issue in the Netherlands. This was not only because this was a bank that had been nursed back to health with taxpayers’ money (even though they had repaid it in full by then): ING was also axing thousands of jobs at the time.

Mr Hamers was publicly criticised for this move. His defence was remarkably weak: he threw out the standard reply that bankers in other countries were demanding a lot more money and that his annual (pre-bonus) salary of 1.6 million euros was, indeed, comparatively modest.

He also wants to make money for the bank. “If you were to draw a line with business success to the left and integrity to the right, Hamers would be left of centre,” say people who know him well. They call him a marketing machine. He wants to make money through the customers; that’s one side of the coin. The other side is that he inspires the staff. After the difficult time during the financial crisis, he has managed to generate pride in the company once more. His speeches are rousing, almost like an American politician on the campaign trail. He has an extremely soft approach, explaining his strategy in simple terms, and according to media experts, the camera loves him.

It seems almost surprising then that Mr Hamers studied, of all things, econometrics, a subject in which statistics and algorithms take centre stage. His employees feel this in their daily work however: he loves data and calculates everything down to the last detail. He’s especially keen-eyed when it comes to costs, and this is one of the drivers when it comes to his love of digitalisation. After all, the more customers bank online, the fewer branches are needed. Accordingly, ING employees in the Netherlands, and even more so in Belgium, are concerned about their jobs. In these countries, unlike Germany, ING still has a lot of bank counters.

Thanks to his studies, Mr Hamers understands exactly the opportunities big data and digitisation offer the banking business. One member of the Supervisory Board recalls how Mr Hamers, in his application for the position on the Executive Board in 2013, outlined his vision for an entirely different ING. You don’t need banks, he explained: you need their products. He described a future in which the bank would be fully automated. ING really only needed financial experts for large corporations and wealthy retail customers.

This he all learned in Silicon Valley. During his time as CEO Belgium, he travelled to the USA on several occasions as part of the “Disruption and Technology” strategy team. While there, he saw how transportation facilitator Uber, hospitality service Airbnb, and even financial services providers like Mint, Lending Club and Kickstarter had developed business models that could revolutionise banking. If ING wanted to survive, it would have to invest in digital technology. Mr Hamers wants ING employees to personally take control of this change. “Disrupt yourself before anyone else does it,” is his catchphrase.

Mr Hamers believes that innovation is in ING’s DNA. After all, ING invented the direct banking model, he tells employees, journalists and analysts. This, along with the PayPal online payment system, was the only really great innovation in the financial sector in the past twenty years.

He never gets tired of talking about technology. “Did you know, for example, that researchers have shown that you can actually predict whether someone will default on a loan? All you have to do is study what they post on social media,” he explains in Munich. “And how much someone saves does not depend on their character or education, but on the amount of savings that their friends have. With this knowledge, we can help people make better financial decisions,” he adds.

Mr Hamers does occasionally overestimate the possibilities however. For example, in the Netherlands, in 2014, ING launched the idea of sharing anonymised data gathered from customer transactions with other companies so that they could then make special offers for things like garden tools, baby products, bicycle accessories, etc. Customers, data protectionists and politicians were all horrified, and the bank reacted surprised: after all, customers have no problem with Facebook or Google, they said. Mr Hamers has learned from that experience. “We will only do this with our customers’ consent,” he later said.

His strategy has been a success: sales, profit and return have all developed positively recently. Last year, ING recorded a net profit of 4.6 billion euros and a return on capital of more than 10 percent. In the Netherlands, people are already talking about the “Hamers effect” and this also appears to impress ING’s competitors like Rabobank and ABN Amro. When it comes to filling executive posts, the express demand is for “guys” like Hamers, as they say in the headhunter world.

Mr Hamers is not yet finished with ING. He is currently trying to convince analysts to assess ING as a tech company rather than as a bank, something which he expects to raise share prices, seeing as companies like Google, Facebook and Uber are very popular with investors at the moment. That would not just be good for ING, it would pad Mr Hamers’ own pocket too: after all, part of his salary is paid in shares.

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