For Arkadi Kuhlmann, innovation isn't simply a matter of plugging old processes into new technology; innovation, he insists, comes from the reinvention of how technology, business and the customer interact. "It's really important in our industry that we have some experimentation," explains Kuhlmann, chairman, president and CEO of Wilmington, Del.-based ING Direct USA.
Over the past decade, Kuhlmann has guided ING Direct (which at press time announced that it would be acquired by Capital One) as it has grown into the nation's largest direct bank -- the primarily online institution now has more than 7.7 million customers and $92.2 billion in assets. In achieving such lofty milestones, Kuhlmann has focused on building a better banking experience, whether it's through the online channel, the call center, mobile devices or one of ING Direct's seven "cafes," which combine a friendly retail environment -- plus coffee and free Wi-Fi -- with bankers who are there to give a face to the bank and help customers.
As Kuhlmann, who launched ING Direct Canada in 1996 and has headed ING Direct USA since 2000, describes it, his focus with ING Direct is on reinvention. "It's all about reengineering the product or reengineering the process or reengineering the customer," he says.
But that's not accomplished simply by plugging outdated processes into shiny new technology, Kuhlmann emphasizes. It's about leveraging technology to create a better experience, while at the same time reexamining the functions of a bank, he says. In doing so, Kuhlmann adds, the object is to "make the customers feel like they're in retail mode and eliminate the friction points."
Drawing parallels between banking and a modern automobile, Kuhlmann says the average driver doesn't want to look under the hood and deal with the stuff that makes the car work; the driver simply wants a car that works. "In the banking industry we have to do a very good job of making the experience simple and straightforward," he explains. "We need to try and make the experience transparent and easy for our customers. The banking industry can do a lot more to make things easier from the front to the back as opposed to from the back to the front."
Kuhlmann says achieving that customer-centric ideal and simplifying how the customer interacts with the bank is what keeps him going. "That's been my drive for the last 10 years, and that's the thing that I'm most passionate about," he reveals. "The core competency of ING Direct is all about marketing and technology, and to bring marketing and technology about to make the bank work like a retailer."
Avoiding the Mistakes of the Past
At the same time, ING Direct relies on its ability to provide customers with a seamless banking experience that, while grounded in self-service, doesn't make the customer feel that dealing with the bank's website or call center is a hassle. "I've never found anybody in America who loves an 800-number," Kuhlmann says. "But you could love it -- if it's simple, intuitive, straightforward and easy to use."
The same principle applies online. "A mistake that we made as an industry that we should all learn from ... When the Internet came along we took branch processes -- manual, paper-based processes -- and just copied them onto a website," Kuhlmann says. "We didn't reinvent anything, but instead made it cumbersome."
As banks move further into the mobile space, Kuhlmann sees the potential for that mistake to be repeated. Mobile, like any channel, he says, is better when banks understand that it brings a unique interface and unique customer interactions. "The ones that understand that that's a different interface are the ones that are going to win at this game," he contends.
Ultimately, customers want an experience that is driven by context and function, Kuhlmann continues, and it's up to banks to deliver a better outcome for the customer. "It's also true for this industry that you need to innovate or die," he says.
And delivering that kind of innovation is not out of reach for most banks, Kuhlmann adds. "The old way of thinking was that you had to have massive scale in order to innovate," Kuhlmann comments. "Ten years ago, to get scale to be competitive a bank needed $10 billion in assets. Now I believe that scale is at $1 billion."
