ING bank signs £274m deal in multisourcing initiative

Dutch bank ING has signed a £274m, seven-year document processing contract with UK outsourcing supplier Astron. The deal is part of the IT multisourcing drive announced by ING last November.

Dutch bank ING has signed a £274m, seven-year document processing contract with UK outsourcing supplier Astron. The deal is part of the IT multisourcing drive announced by ING last November.

The agreement, which is due to be finalised in the third quarter, will cover the processing of banking and insurance documents and involve up to 800 ING employees transferring to Astron.

It is the second large outsourcing contract ING has agreed since it set out plans to transfer about 2,200 employees to outsourcing partners in a bid to make annual cost savings of £158m.

Rather than manage all these new business relationships itself, the bank is understood to have taken on Accenture as its multisourcing integrator, with a remit to manage the outsourcing contractors as they come on board.

ING told a Gartner conference in London earlier this year that it decided to outsource its IT to multiple suppliers after carrying out a far-reaching evaluation of its IT infrastructure and supplier relationships.

The banking group, which operates in the UK as ING Direct, said a string of acquisitions and mergers had left it with a particularly complex, diverse and expensive-to-maintain legacy infrastructure. Multisourcing was seen as the best way to cut costs and rationalise and consolidate its numerous systems.

Dirk Karl, who is in charge of the new strategy for ING, said the bank decided to evaluate its sourcing options because of the maturity of the market compared to a few years ago. He said positive experiences of sourcing across other industries had convinced the bank there were savings to be made, but only if a multi-supplier approach was adopted.

“The traditional one-party approach to ousourcing cannot fully address our needs. With only one supplier, there is no internal benchmarking or competition. There is also a danger that proprietary or custom solutions will not be flexible or interoperable enough.

“Standardisation and commoditisation of core systems is, we think, more likely to offer a long-term solution.”

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