ING Belgium setting the standard now and in the future

Mobile banking press event

November 26th, 2014

Mr. Lieven Haesaert, General Manager Direct Channels, ING Belgium

Dr. Ian Pearson, Futurologist, Futurizon

ING Belgium: Setting the standard,

now and in the future

The state of mobile banking - an ING view -

Lieven Haesaert, General Manager Direct Channels

I

Customers want to manage their money in an easy way, anytime, anywhere.

4

Banking is a primary reason to use the internet

80% of all Belgians connects at least once a week to the internet… while the European average is 72%1.

58% of all Belgians uses the internet to do online banking… while the European average is 42%1.

47% of all Belgians uses the internet to communicate on social networks… while the European average is 43%1.

1. Source: FOD Economie (2014). Barometer van de informatiemaatschappij.

vs.

5

Smart mobile devices are now widely adopted…

Share of Belgians owning smartphones and tablets1

Share of Belgians intending to purchase a smartphone or tablet1

24% of Belgians owns both a smartphone and a tablet

30%

19%

46%

38%

0% 10% 20% 30% 40% 50%

Dec ‘12

Feb ‘14

13%

20%

17%

21%

0% 10% 20% 30% 40% 50%

1. GfK: Multi Screen & Mobility Survey (February 2014)

… and so is mobile banking

27% of Belgian internet users uses mobile banking1

Including both men and women1

Including all age groups1

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24%

30%

0% 20% 40% 60%

20%

24%

32%

37%

30%

0% 20% 40% 60%

18-24y

55+ y

1. ING International Study (May 2014). Financial empowerment in the Digital Age.

25-34y

35-44y

45-54y

27%

The mobile app has become the most frequented online channel

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2011 2012 2013 2014

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Online banking sessions on PC, smartphone and tablet1

(Q1 2011 – Q3 2014)

1. Source: ING Belgium.

57%

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Customers log in almost every day on their smartphone

8 1. Source: ING Belgium.

Average number of logins per week1

(average week for an active user)

0 1 2 3 4 5 6 7

1 to 2 times

2 to 3 times

>5 times

9

Tablet banking has created a new banking moment

1. Source: ING Belgium.

ING online banking usage throughout the day (weekdays, relative distribution per channel)

0:00

1:00

2:00

3:00

4:00

5:00

6:00

7:00

8:00

9:00

10:0

0

11:0

0

12:0

0

13:0

0

14:0

0

15:0

0

16:0

0

17:0

0

18:0

0

19:0

0

20:0

0

21:0

0

22:0

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23:0

0

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Where do Belgians log in the most when abroad1?

(summer period 2014)

France

The Netherlands

Spain

Morocco

Turkey

France

Spain

The Netherlands

Italy

USA

1

2

3

4

5

1

2

3

4

5

Mobile banking everywhere

10 1. Source: ING Belgium.

Share of sessions from abroad in an average week1

(October 2014)

5% October

10% Summer

6% October

11% Summer

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For mobile bankers, contact with the branch stays as important…

Which of the following types of banking do you use and how often…1

1. ING International Study (May 2014). Financial empowerment in the Digital Age.

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… and they are very eager to give feedback

« J'adore l'application sur tablette ! Bravo ! Mais ça serait intéressant de pouvoir modifier

les types d'achats dans 'Mon budget'. Par exemple: j'ai été acheté quelques bricoles dans une épicerie et ça me dans 'Divers'. Quand je

vais dans une enseigne alimentaire bien connu, ça met logiquement dans 'Famille' »

- M.S. (3/05/2014 )

« Bravo!! Outil très intelligent et facile d utilisation. Meilleur gestion du budget et meilleur vue sur la gestion au quotidien.

Vraiment bravo! »

- B.N. 02/11/2014

Bien, mais dommage qu'il ne soit pas possible d'avoir accès aux investissements

- R.D. (21/08/2014 )

“App werkt zeer goed. Zeer gebruiksvriendelijk en overzichtelijk.

Heel eenvoudig en in 'no time' te installeren. Prima ! Bedankt !”

- P.P.(10/07/2014 )

• Source: ING Belgium; Feedback given through the feedback form on the tablet app.

> 5.000 feedbacks received in the last 6 months = key input for the evolution of our channels

Our customers ask for easy and relevant banking solutions.

14

2014: More functionalities, still easy to use…

2011 2014

Total sample (n = 539)

Total sample (n = 449)

Total sample (n = 668)

• Top 2 = sum of respondents who answered “very easy” or “rather easy”. Customer effort score correlates with NPS and Satisfaction score

92%

89%

78%

“Easiness” of ING Direct Channels (Customer Survey 2014, ING Belgium)

… confirmed by our ‘Customer Effort Scores’

15

Almost 1 in 2 simple products bought online

16 • Source: ING Belgium.

17

Savings accounts

(Lion Deposit & Lion Premium)

Credit Card

(Visa Classic)

Current account

(Lion Account)

Travel insurance

(Lion Assistance)

Make An Appointment

An increasing product offering on mobile …

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Coming soon: Subscribe to an ING pension savings plan on mobile in 3 clicks

… and launching a new one

1 2 3

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Anywhere, also for our business customers

2 3 4

Coming soon: “Second signature” on mobile

1

Robert Schumann

R.S. Architecture

R.S. Architecture

Robert Schumann

20

What customers value most in mobile banking

Since using mobile banking …1

1. ING International Study (May 2014). Financial empowerment in the Digital Age.

Customers want intelligent tools for money management1

41% of mobile bankers would use

automatic categorisation of their spend on clothes, meals out, etc.1

63% of respondents keep a

household budget.1

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Therefore we launched the budget module in the tablet app

22 1. PFM Insight Series: Edition 4, MAPA research, June 2014, the Financial Brand June 2014 2. Source: ING Belgium.

“In terms of iPad app developments ING (BE) stands out as one of the fresher

examples of added PFM functionality over the last 12 months. 1”

- MAPA independent global research

More than 750.000 downloads

Overview of average ratings in the App Store & Google Play Store since the launch of our apps2

(iOS & Android consolidated)

Our Smartbanking apps have been downloaded

more than 750.000 times since the

launch in June 2011 2.

Dr Ian Pearson

Future of mobile banking

www.futurizon.com

twitter.com/timeguide

timeguide.wordpress.com

Part 1: short term trends

• Always on – coverage, data rate, battery life, ease of use

• Instant gratification – what you want, where you are, now

• Eurostat: Half of EU internet access is via mobiles

• Originally phone, email, social nets, news, reading, games, music

• Now photos, searching, ordering, payment, ticketing, fulfilment

• Services are becoming commoditised

• Many users own phones, tablets and laptops, need common feel

• Users now assume suppliers know their location & preferences

• and assume they can pay and ticket using mobile

• Need more personalised experience to differentiate

Mobiles cover every area of the

modern lifestyle. So must payments.

Better mobile nets,

devices and apps

lead people to lead

a more mobile

anything/anywhere

lifestyle.

Globally, 50% use mobiles

Virtuous circle for app, web &

enterprise development

Improving OS,

interfaces &

displays

Ease of use

Ubiquity

Higher

market

visibility

Easy & secure

authentication

& payments

More willing

entrepreneurs

High speed

data &

location

Result: growing use and richer lifestyles

Reorganisation and restructuring

Much wider variety of ad-hoc business

models with more freelancers, coops and

virtual companies, each with custom apps

and structures but all needing payments.

As new and unfamiliar organisations grow quickly, and as people

use their mobiles for more and more things, trust in the

underlying authentication and payments systems becomes more

important. Having a proven record is essential to success.

Trust-based services

Context/

Location

Reputation &

Recommendations

Certification

Virtual

companies

Services

Privacy/

Smart filters

Custom overlays

Sensor nets

Interfaces

Identity

management

Trust is the most essential ingredient for successful business

Augmented

reality

Security Payments

Brand assurance

TV

IT Converging with other sectors

via Internet of Things

IT will converge with every technology area.

Phones

& tablets

Games Mags

Tracking

Film

Augmented

reality Profiling

E-ink Clothes

Food

Retail

Cars

Visors Health

Thin, flexible & cheap displays will be scattered everywhere as well as assorted visors and all the usual phones and tablets

Home &

office

devices

Accelerating lifestyle innovation

Ease of use

Accessibility

Familiarity

Mobiles are the obvious choice for most things most of the time. A virtuous

circle of accessibility, familiarity and ease of use leads to more use and

increased feeling of safety. Biometrics helps all three so may be a big driver.

Banking is main driver for internet use. Managing your money effectively

underpins living to the best of your resources.

Low stress mobile payments

Secure Device and Network

Intuitive payments mechanisms

Simple secure apps

Freedom

of Lifestyle

Peace

People want to manage & spend their money anywhere, any

time, on any device. Having an easy interface with easy

biometric authentication and knowing it is still secure leads to

peace of mind – and greater use!

Encryption

Biometrics

Good design

Trust yields use

Without stress

Death of passwords • People can’t remember many tough passwords. Wearable

devices are adding to a range of biometrics to replace

passwords as primary means of authentication

• Mobiles include near field comms for payments. Mobile is

a security token itself but some now have fingerprint and

face recognition.

• Wristbands and rings are also being tried

• Fingerprints, voice, gestures, signatures, iris…

• Nothing is risk-free so there is always a trade-off between

ease of use and security. Banks have to absorb tech risk.

Sponge nets, ad-hoc nets, fog…

Direct inter-device networking may soon become an important alternative internet platform, diversifying choice of network on the move

Wireless LAN link

to web and

between clusters

Wireless links

Laptops

Tablets

Smart phones

Display devices

Digital jewellery

Beacons

Street furniture

Custom devices

Smart clothing

Active skin

AR – Enhancing the real world

Hi-res, 3D content overlays for email, leisure, socialisation, navigation etc

Dual appearance – Can blend games or TV or ads

into real world lifestyles

– You can choose how you appear in the broadcast virtual world

– Everyone can see the world differently

– Fight off aliens while your partner chooses an outfit

Will further increase range of services that integrate online payments

ING: setting the standard for mobile banking now and in the future

II

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We are proud of our track record in adopting trends

1985: First Self’Bank

1992: First PC banking platform

2007: First universal direct bank

2013: First budget module on tablet

2012: First in-app banking product sales

2014: First Private Banking app

2011: First mobile banking app

TREND 1

From a physical wallet to a virtual wallet

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That virtual wallet will be your ING banking app

Coming soon: pay by mobile

From “Easy” to “Easier”

TREND 2

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Biometrics offer the solution

Willingness to adopt biometrics for banking1

(UK bank customers, 2014)

1. British survey commissioned by Intelligent Environments, 2014

79%

52%

33% 30% 29% 27%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

In favour of biometrics instead of passwords Fingerprint Eye Face Heartbeat Voice

42

Where could fingerprint replace codes?

50%

52%

61%

0% 20% 40% 60% 80% 100%

Fingerprint for credit card purchases

Fingerprint to replace all internetpasswords

Fingerprint to unlock screen

Interest levels in using fingerprint as alternative to codes1

1. Source: Ericsson Consumer Lab Analytical Platform (2013). Base: 5.000 iPhone/Android smartphone users in 10 major cities (worldwide), who use internet daily

44

1 2

Fingerprint instead of codes

45

1985: First Self’Bank

1992: First PC banking platform

2007: First universal direct bank

2013: First budget module on tablet

2012: First in-app banking product sales

2014: First Private Banking app

2011: First mobile banking app

2014: First Belgian bank to implement biometrics on mobile

Part 2: 5 year view

Miniaturisation: Even smart

watches are only half way there

Identification,

security, payments

Social status

Digital image

augmentation

Communication,

data distribution

Sensing

Medical

monitoring,

alarms

Networking

Decoration

Tribal signalling

Digital bubble

Mobile

website

Miniaturisation will bring everyday IT down to wearable and jewellery size.

Combinations of devices can monitor and relay a wide variety of data.

Any

form

Trust in Payments 2020

• 73% worried about password & credit card theft

• Electronic payments will use combinations of

intuitive security mechanisms & biometrics such as

fingerprints or voice recognition

• Social tokens can also enhance trust:

Handshake + voice recognition + gesture – e.g. “here

is €20”. Signal travels between devices via the skin

across handshake, with time, GPS location, both IDs,

voiceprint.

• Friendly, intuitive, no passwords, very secure

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Permanent layer Mid-term layer

Ink layer Membrane layer Wearable layer

The body becomes an IT platform

Skin Epidermis

Dermis

Skin-based electronics can link blood

chemistry and nerve signals to

external computers and systems

Active skin progress so far

Seoul National

University -

A flexible electronic

skin patch has strain

gauges to measure

tremors, and heating

elements to release

drugs held inside

nanoparticles

Epidermal Electronic

System, US, China,

Singapore team

Once basic sensors become available, there will be rush for software to interpret

and use the data. Main market is medicine but IT interfacing and virtual biometrics

will also feature.

Different situations, same care

Friendly

Context aware

Personal

Any provider can provide increasingly commoditised services.

Differentiation in an age of advancing AI will come from

having people who know and understand the customer, what

they need in this situation, and how best to make it happen.

IoT 2020: Getting the Context Clouds, tags, mobiles and sensor networks

Environment will be full of

processors, tags, data

stores, sensors, displays

& communicators. Self

organising to produce

massive raw ground-up

data pools with their own

intelligence. Big data will

be replaced by biomimetic

smart systems.

Creates ‘digital air’ context

and AI channel between

customer and suppliers

Tag

Store

Store

Store

Tag

Tag

Tag

Tag Store

Processing

Processing

Processing

Sensor

Sensor

Sensor

Sensor

Sensor

Sensor

Comms

Comms

Comms

Display

Display

Keeping customers on board

Satisfy

and

develop Create

awareness

Grow

markets

Look for

new demands

Use social nets

to monitor and

cultivate

customer trust

Tapping needs Developing

expectations

Basic technology development

People will only buy

what they want, but

they don’t know what

they want till they are

shown it!

Care economy businesses

Value of

physical/

intellectual

Work as AI

develops

Value of

Community &

Personal

contact

time More face to face interaction, needing emotional and ‘human’ skills

Trust will be a very key factor and requires better integration

Companies need to work more closely with individuals & community

Sector winners and losers

Centralised manufacturing

High Street shops

Knowledge based jobs

Bricklaying/plumbing etc

Administration

Machine operation

Traditional Companies

Advisors

Transaction processors

IT Departments

Green energy production

Custom manufacturing

Try-on outlets

Human skill based jobs

Personal services

Lifestyle support services

Caring

Entertainment, sport, arts

Law

Modular prefab construction

Virtual world design

Advice/Counselling

Freelancing

Social organisations

Health care

Regulation

Survival priorities

Brand integrity

Business diversity

Trustworthiness

Social responsibility

Foresight

Bravery

Agility & adaptability

Think clouds

Think virtual

Focus on being human

Thank you [email protected]

www.futurizon.com

twitter.com/timeguide

timeguide.wordpress.com

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Thank you for your attention,

we welcome your questions