ING is to invest EUR800 million in digital transformation initiatives over the next five years while shedding 7000 jobs says bank CEO Ralph Hammers at an investor day in the Netherlands.
The programme to accelerate the bank's 'Think Forward' strategy will yield EUR900 million in cost saving by 2021, primarily by moving to a single integrated banking platform in the Netherlands and Belgium
Hammers says the two-year old Think Forward strategy has already yielded impressive results, attracting over three million new customers.
“Customers are increasingly digital and bank with us more and more through mobile devices. Their needs and expectations are the same, all over the world, and they expect us to adopt new technology as fast as companies in other sectors," he says. “In that context, we intend to start a path of convergence towards one digital banking platform. Countries with similar value propositions intend to harmonise their business models and develop shared operating platforms. Infrastructure, data and support functions are intended to be standardised across countries and business lines.”
The biggest impact will be felt in the Netherlands and Belgium, where the bank plans to move to a single banking platform and merge ING and Record Bank branches, impacting around 3500 postitions in Belgium and 2300 jobs in its home market.
Hammers says the bank will also work toward creating a harmonised 'model bank' approach to product strategy in smaller markets, including Spain, Italy, France, Czech Republic and Austria, operating out of a single central IT services centre.
“It is inevitable that the various measures and intentions announced today may have a significant impact on many of our colleagues. It means some functions will change significantly in nature," says Hammers. "It might mean that the location of functions will change. And it might mean that positions will no longer be there in the future. All-in-all, over the coming five years, around 7000 functions might be impacted by these effects, including 950 positions employed by external suppliers.”
He adds that a pre-tax redundancy provision of around EUR1.1 billion is expected to be booked, of which EUR 1 billion will materialise in the fourth quarter of 2016.