ING is shelving plans to develop a unified digital experience for customers in overseas markets, taking a €140 million hit in capitalised software costs against the programme.
The decision to cut the project comes as ING presents its third quarter results, posting a 41.4% drop in net profits compared with the same period last year.
With the Coronavirus crisis and low interest rates battering the bottom line, the bank says it will also pull out of wholesale banking in South Africa and in some Asian locations.
This, combined with a rationalisation of ING's Think Forward digital strategy, will lead to 1000 job cuts in in ING's investment bank and consumer bank abroad, along with the shedding of an unspecified number of roles in the Netherlands.
The overhaul of the bank's digital efforts under new chief executive Steven van Rijswijk was foreshadowed in October, when it announced plans to combine all of its disparate innovation programmes into a single dedicated unit, ING Neo.
Speaking today, van Rijswijk, states: “Our ambition to keep transforming into a leading data-driven digital bank remains firm. However, the challenging external environment requires that we remain flexible in ‘how’ and ‘where’ we deliver our Think Forward strategy."
He says the bank is refocusing its activities to ensure faster client delivery via the re-use of already developed mobile app components and the rollout of global digital product offerings in the areas of insurance, investments and consumer lending.
"We’ve therefore decided to considerably reduce the scope of Maggie, a programme launched to provide a standardised customer experience and integrate the product offering in four of our European Challenger countries," continues van Rijswijk. "The decision has been taken in light of the current economic headwinds and our learnings from the complexities and costs of cross-border system and product integration.
"The change in Maggie’s scope has led to an impairment of €140 million, primarily related to capitalised software development costs. The refocusing of our wholesale and retail activities will result in a headcount reduction of approximately 1,000 FTEs by year-end 2021."