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How to adopt insurtech at scale. What insurers can learn from ING Bank.

Written by Roger Peverelli and Reggy de Feniks - Founders The DIA Community on Oct 7, 2019

Scaling new insurtech innovations so that they have a significant impact on the top and bottom line is still a major challenge for most insurers. When it comes to creating adoption at scale, there is just so much we can learn from the banking industry. Think of the rapid adoption of mobile payments. That is why we asked Olivier Guillaumond, Global Head of Fintechs at ING Bank, to reveal their success factors.

ING Group is one of the most innovative banks with 52,000 employees worldwide. In the summer of 2015, they embarked on a journey to reinvent their organization from the ground up. Inspired by companies like Google, Netflix and Spotify, they went from being a traditional bank to being a ‘bank of the future’ with an agile company structure. Innovative ideas can truly flourish in the worldwide ING Labs (Amsterdam, Brussels, London and Singapore). 

Olivier, Global Head of Fintechs, can you tell a bit about your role at ING?
Olivier: “Interaction with fintechs accelerates the ING strategy. Our job is to make sure this promise is fulfilled. We are looking from the outside-in to improve services for customers globally. Fintechs look at banking from a fresh perspective, not from a traditional point of view. Fintechs help us change our culture.

How does this translate into your day to day practice?
Olivier: “We operate in four different ways. First, we create our own fintechs. So far, we have created about 10 companies financed by our own innovation fund and which went through our staged gates funnel. Second, we identify fintechs with whom we can have a straightforward collaboration or co-creation. We currently engage in 190 such partnerships worldwide. Third, we have a CVC fund called ING Ventures. Here we have 300 million euro at our disposal to (minority) invest in fintech companies. Our objective there is to provide strategic return for both ING and the fintech. So far, we’ve made 27 investments. Finally, it can happen that we take a controlling stake in a fintech when their value proposition is core to our company. All of those dimensions aim at accelerating the ING strategy and create impact.


Investing is just the beginning, ultimately you would like to use those acquired technologies within your company. Adoption at scale is still a major challenge for insurers. Banking seems to be more successful at that. Can you mention some of the challenges you faced here?
Olivier: “We’re limited by regulations, especially in Europe. If you want to scale across countries, you have to make sure you’re compliant with each regulation in every country. This doesn’t allow you to scale as quickly as you would in a other markets such as the US or Asia. We’re also facing a very low interest rate environment, which will continue for the years to come. We’re constraint by the environment in which we operate which forces us to make choices. On one hand it is a limitation, on the other hand it helps us focus.”


Nevertheless, you’ve innovated successfully. In your view, what are the success factors when it comes to scaling new technologies in your organization and externally, among clients?
Olivier: “At ING, we follow what we call the three Cs. The first C is for Customers, because that is where it starts obviously. You need to make sure you do not build stuff you think is good for your customers, but actually build stuff that your customers really want. To know what they want, you have to ask them.
The second C is for Connection, both internal and external. External is about leveraging the 190 partnerships I mentioned. Especially in a constraint environment, one way to augment your capabilities is to find the right partners to do so. This way you can go faster and enrich your value proposition whilst being transparent and respecting your partner. And if the partnership doesn’t deliver the expected results for both parties then it’s better to stop. We have stopped more than 90 partnerships till date. Internally, it’s important to connect as well. If something works well in country A, country B needs to know about it. When sharing the best practices, successes and failures and you have 52,000 people, the internal connection is critical.
The third C is for the Culture of the company. It’s easy to copy technology and ideas, but it’s very difficult to copy culture. We are investing massively in defining our own innovation culture and making sure we train staff and spread that message throughout the organization. We use our own innovation method PACE, which is a combination of Design Thinking, Lean Startup and Agile methods.
Even though we started years ago, it’s a continuous journey that we feel is essential to deliver the impact we are looking for.”

It’s not just doing one project in an agile fashion, but really moving the whole organization into that different mode. You were the first company that did this transformation worldwide at company scale. Can you share about the size and the complexity of going through that transformation?
Olivier: “Culture is key here. A top-down approach is important to make sure that your management is fully on board in this journey and really pushes for it – to make sure that everybody in the organization is incentivized to embrace innovation. That was our starting point at ING. Then we trained thousands of people at PACE. We went to the countries and their business units to explain why we’re doing it, why it is good for our strategy, why it’s good for the unit to accelerate and so on. We are not finished yet. We also want to do this cross-border. Even if this makes it more complicated, we feel it’s absolutely necessary if we really want to reach our goal.”

This must have been pivotal in changing also the way that your co-workers actually embrace fintech technologies.
Olivier: “Yes. It’s one of the reasons why Nick Jue, former CEO Netherlands, who implemented the whole agile way of working in the Netherlands, then moved to become the CEO of Germany, to spread that same way of working.”

You mentioned you trained thousands of people. The way things are organized is completely different than it used to be. It used to be very hierarchical and now you’re working with agile teams.
Olivier: “We went from being hierarchical to a flat organization structure. We now work with tribes, squads and chapters. This allows us to empower a team: to deliver specific services in a specific domain and to be fully end-to-end empowered to do so. It accelerates the rollout while taking full responsibility of the build as well as the maintenance of it.”

How many people work in those tribes?
Olivier: “Several thousands.”

Do they do this next to their other job?
Olivier: “This is their job. Their daily business is to be part of a tribe that is made up of squads. The chapters are infusing the knowledge and the specialties across tribes.”

This way you continuously ignite the whole company with innovation.
Olivier: “The idea is to accelerate. So not only innovation but also your daily business. The whole idea behind this is to make sure that you can componentize the organization, fully empower the teams and then rely on the fact that they are going to make the right choice; fully aligned with your strategy top-down. A top-down bottom-up approach at the same time.”

You probably needed to align the KPIs. If everyone is focusing on ROI it will result in a lack of innovation. How did you do that at ING?
Olivier: “It’s very important but it’s also a belief. If you really believe in a specific idea, the KPIs, the beginning, will not matter that much. 20 years ago, we launched ING Direct, one of the first fintechs. We lost money for the first 8 years. If you would have monitored on a KPIs financial return, you probably would have stopped that initiative earlier. We didn’t and then ING Direct became a huge success. So, there is a balance to be found between short term KPIs and the other things which matter to you as a company.”

How, then, do you go on and monitor the impact of what you are doing?
Olivier: “We needed to think about this. For instance, we had to monitor the impact of the 190 partnership. We decided to create a set of KPIs, which are aligned with our strategy. Obviously, there is some P&L element to it, but customer satisfaction and primary relationship are also very important to us. Those are type of KPIs that we implemented for all our partnerships. We are steering against those KPIs to make sure that if it doesn’t work on the midterm, we stop. If it does work and we can accelerate, we double down. The whole point is not to have 200 or 300 type of partnerships for the sake of having partnerships, but to engage in partnerships that really create impact.”

That’s another important part of your job; stopping partnerships. Where do you base your decision on?
Olivier: “Let me start by saying we start more than we stop. It’s about being fair. When you enter into a partnership with a company you need to find the right balance. Large corporates and fintechs have very different characteristics in terms of size, speed and regulatory exposures. Hence the human relationships and trust between the parties are key success factors. If both parties have done their best and it doesn’t work, then it’s better to stop so you can focus your time and energy on something that does work. For that reason, we set up KPIs right from the beginning. Luckily, many of the partnerships work and create real impact.”

Could you share an example of a partnership?
Olivier: “We launched Yolt, a smart money app, in the UK in 2017. It was in anticipation of the attitude to open banking in the UK and is fully developed within ING. It’s now also live in France and Italy. It aggregates all your accounts and helps you manage your money by providing you insights and by seamlessly connecting you to creative partners on the platform who help you optimize your time and money. This is called Yolt Connect. For instance, we have a partnership with MoneySuperMarket in the UK where you can compare your energy spent and then perhaps switch. Recently we announced a partnership with Raisin, which allows Yolt users to access savings accounts with exceptional high rates and then be able to see your augmented savings from within the app. We also partner in insurance, with PensionBee.”

You launched in 2017, that’s 2 years ago. What are the results you’ve seen?
Olivier: “We’ve reached almost one million clients.”

One million clients in just 2 years?
Olivier: “Yes – Beyond the number of users it is interesting to notice that for instance last November 60 % of all Open Banking traffic in the UK went via Yolt. We decided to leverage upon this massive experience and Yolt opened up its single API to the world, for other businesses to use. We are very excited about this new B2B offering which also creates a new revenue stream. We really started creating network effects in this experiment.”

On the one hand, creating those partnerships helped you to gain market share overnight, increasing the relevancy of your offering. And secondly, as soon as you reached a critical mass, you extended the offering in a B2B fashion to even expand how you can also leverage the benefits as a bank. Opening up new revenue streams is now opening up new business models.
Olivier: “Absolutely, and I think today that is also true for insurance colleagues. Banking and insurance are like oxygen. You don’t want it per se, but you need it. As a bank or as insurer you need to recognize the fact that you need to go beyond that what you traditionally have been doing and Yolt is an example of how we’ve done that.”

You mentioned having started 10 initiatives yourselves out of your labs, having invested in 27. That gives you the knowledge on how you ‘build and buy’ and make the right decisions between these two.
Olivier: “At ING we have 52,000 entrepreneurs. We all love to build. We also understand that partnering is sometimes to best way to get where we want to be with the right time to market in a finite environment. So, we try to solve the equation by defining clear criteria of when to build, when to buy, when to partner and what we want to own. It’s an ongoing process and we’re spending a lot of effort internally to clarify those criteria to make sure we spent time and energy where it matters.”

In a previous interview Marco Keim, board member of AEGON, provocatively mentioned that it’s virtually impossible to start real innovation within the organization. How does it relate to your strategy of buy and build?
Olivier: “We don’t choose between the two. For instance, we built Yolt outside of ING stack and outside of the ING organization to make sure that they can grow as fast as they can. That’s generally what we do in our labs. But in the end, we also believe that if you really want to make an impact, the ING engine is very powerful. That’s why you need to make sure that you innovate from within. First, because it can help you being faster in your digital transformation, but also because this is where you get access to the 38 million customers and can really have a huge impact.”

So, how to leverage the client base that you already have is a key success factor to make things fly …
Olivier: “True. If you want to scale fast, you need to get a few elements right. You need to have one tech platform – or as few as possible. Sometimes it can be conflicting. Right now, we’re trying to do things in parallel and we believe it is a necessary evil if you want to be able to really scale fast. This is typically a moment where fintech partnership can really help rolling out new value propositions while we are transforming ourselves.”

Insurance increasingly becomes embedded; you purchase a car and the insurance is already in there. This is already reality in banking; yesterday I took an Uber and paid without seeing the actual payment. Both payments and insurance products are increasingly becoming invisible. What impact does this have on the client relationship?
Olivier: “This just comes with a risk of losing to the many players that are entering the market. We’re coping with this in several ways. We try to win this payment game by being on the forefront via innovations. We created Payconiq and launched it in the Benelux. It is a combination of point-of-sale payment for merchants and peer-to-peer payment between individuals combined with a loyalty program. We built it within ING but realized we couldn’t do it on our own if we wanted it to be a market solution. We needed to scale and partnered with many partners like Rabobank, Volksbank, KBC, Belfius, AXA and more – to really become a primary solution for the Benelux region. So, in this case, payment is really visible if you will, but it’s not only payments; it’s convenience, it’s loyalty and it’s both merchant and individuals.”

You’re adding new value to make the payments experience something more than just payment.
Olivier: “You have to be aggressive in your response to these trends. On the other hand, you also need to be aware that you can become just the infrastructure – the utility, water, gas, the rail. This is not a problem, as long as it’s a conscious decision, and even a rail can be a smart rail. We did this with ‘Banking of Things – FINN’, which basically is an IoT innovation and IoT app. It allows a connected device to send a notification and initiate payment. As a developer it is great because you can develop a framework where you can build your trigger. As a user you can use your companion app to pair FINN with your connected device and select the payment methods to access the banking environment with your connected device. It’s really embedded; you set it up once and you don’t need to think about it anymore.”

There are two sides to your strategy. On the one hand, you want to counter invisible payments by adding more value and making the customer experience more relevant. On the other hand, you use the trend of becoming invisible and create new business models that drive new value for the bank. Would that be a right way of putting it?
Olivier: “At ING we are clear that we want to be the go-to platform for financial services. Our definition of being a platform is One Global System, Being Open and Being Data Driven. We distinguish between three types of platforms:
Firstly, the ING platform. A channel where we hope our clients can come back again by always providing the best services. This doesn’t mean that we only sell or propose ING products and services. We have many partnerships and investments. We propose partner products and services to our clients if they are the best services for that particular client at that particular time. This gives us happy customers that come back to the ING platform because they know they receive the best service all the time.
Secondly, independent platforms. I mentioned a few before; Yolt, Banking of Things, Cobase.
Thirdly, other retail platforms. We are cautious about this one. We only do this when we feel it’s really necessary. We currently offer Apple Pay in Australia, Poland, Spain, Romania and the Netherlands.
Our primary focus is really to build our own platforms ourselves – in partnership with.”

It’s about the open banking, it’s about building ecosystems, it is about creating services that are not just relevant for your clients but also for customers in general. Ecosystems are a key topic on the agenda of many insurers. You’re successful in this, you just ventured out in mobility.
Olivier: “Most people have a mobile phone with sensors. In anticipation of PSD2 and open banking, we built what we call ‘invisible tickets’.  Instead of depending on buying a ticket every time you want to take the train or metro, you can be direct debited using open banking API. We tested this earlier this year in the Netherlands in partnership with NS, the leading railway operator in the Netherlands. We want to make things as easy as possible where you don’t need to open doors or pay in advance, you just go.”

You’re solving a friction of the experience when travelling with public transportation and you make it your own domain by including a seamless payment experience that go with it. This is a real paradigm shift: You don’t wake up in the morning thinking about banking. Pretty much the same as with insurance. This is the way that you cope with such issues. It’s moving upstream where the real issues are that customer experience, the real problems that they face.
Olivier: “You have to move upstream. As a bank we have the luck to have more daily contact than insurers have. I think that one of the challenges for insurers is to make sure that you get more of the daily contacts, to build up your data understanding of your customers. As a bank that’s what we are trying to achieve.”

One of the topics we discuss at our DIA events, is the revival of bancassurance that is taking place. ING recently entered into a Digital Partnership with AXA. What is your vision on the future of bancassurance? Will it become more important less important? What will change?
Olivier: “We strongly believe in bancassurance. We share many values with AXA and deployed the PACE innovation methodology in the partnership. The idea is to jointly build an innovative digital global insurance platform where we can roll out modular, granular, digital only products and services in record time to our client base. AXA is looking at the products generation site and it’s being distributed via ING. We’re very excited for the commercial launch.”

10-15 years ago, bancassurance was about putting insurance brochures on the desk of any bank branch. Then we moved to sharing data – leveraging bank data for better risk assessment. With all the data currently available, the next stage could be – or in our view should be – about becoming closer to clients. PSD2 can play an important role in that area. What kind of opportunities would you see for insurance companies to work together with banks when looking at PSD2?
Olivier: “I think PSD2 is going to change the way people interact with financial services companies. We see it as an opportunity we want to make full use of. With PSD2, any TPP which is authorized can basically access a customer account if given the consent rights. Insurers, just like banks, can build these daily relationships by providing value at their services on top of the rails. If you are able to convince your client to give you consent, you can do a lot of things.”

In other words, you think there are plenty of opportunities out there for insurers
Olivier: “Yes! And surprisingly we do not seem to see yet many initiatives coming from insurers on this front.
One could for instance imagine that an insurer would be interested to use Yolt API and access all the accounts (when given consent). From there you can even initiate payments. You don’t need to be a bank to do payment transactions from bank A to bank B. You can convince your prospect base or client base and then you initiate payment, provide insights, etc. An insurer could also access and develop a wider range of services which would help retaining and nurturing the relationships built over the years. It’s a great opportunity for many players including insurers.”


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