The all-digital retail banking platform of Dutch financial giant ING will expand its offering next year to include payments and lending capability, new functions that are seen to increase its customer base.
In an interview on Thursday, ING Philippines chief executive officer Hans Sicat said the digital arm would switch on the payment function by the first half of the coming year and the lending mechanism by the second half.
Since its launch in November 2018, the all-digital ING banking platform has focused on deposit-generation. It initially offered an interest rate of 2.5 percent a year and further raised it to 4 percent for new and existing customers until Jan. 31, 2020. These rates are much better than the rates offered in the market to date.
Recently, ING has sweetened its offering by giving a rebate of P100 per transaction with every successful electronic bank transfer to ING, for up to two transactions a month.
The payments and lending mechanisms that will be launched next year will also be offered through the ING app.
Asked how much the loan size will be per account, Sicat said: “We haven’t finalized it but the idea is the credit scoring as well as the analysis will be done very quickly, based on data and group-based AI (artifical intelligence) algorithm and then everything will be processed online, hopefully within minutes,” he said.
ING’s digital bank can offer higher deposit rates because it had no operating cost in terms of brick and mortar structure, Sicat said.“Our operational costs are calibrating only to supporting the digital environment and as a result, it’s never as heavy as you might think it is,” he said.
“In any digital bank, there’s a lot of upfront cost for technology, then hope that you can catch up over time. Basically, whatever rates that we give on savings, to a certain extent, these are items which—if you compare to the cost based on a regular retail bank—we are not paying for anyway,” he said.
Once the payment platform is launched, Sicat said the ING digital platform might be able to attract more customers, who can easily transfer funds for all bills payments.
The ING app has now been downloaded by over one million times. “Not everybody converted [into actual accounts] but it’s reasonably high,” Sicat said.
Asked about the demographic profile of new retail clients signed up by ING since the launch of its digital platform, Sicat said these would be young adults within the 25 to 35 bracket.