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ING Turkey uses digital technology to improve services and grow customer base

Turkish bank uses business process management technology to offer financial services through 1,500 grocery stores, technology outlets and post offices

Turkey’s ING Bank has grown its customer numbers by 40% to more than three million in four years, following a major investment in information technology.

The bank, based in Istanbul, is using business process management (BPM) technology to offer banking services through retailers, post offices and airlines.

The project has allowed the bank, which is ranked eighth in Turkey, to grow its customer base by nearly one million without the need for more branches.

Catching up with the competition

ING Bank Turkey, launched in 2008, began looking at ways to catch up with its larger competitors four years ago. The bank did not have the resources to expand its network of 370 branches, so it began looking at how it could use technology to expand its reach.

“We needed to grow and we needed to grow fast and do something different from the other banks,” says the bank’s CIO and COO, Gorkem Koseoglu, in an interview with Computer Weekly.

ING Turkey began a digital transformation programme, with the aim of offering financial services though other retail outlets, such as shops and post offices.

The project included the development of applications to allow staff and customers to access banking services and information from mobile phones and tablet computers.

“The strategy of the bank was to become more customer orientated, making banking easier, but also being available any time, in any way, which basically means you need to have very good channel capabilities,” says Koseoglu.

“We realised that, to reach those ambitions, we could not leverage our existing legacy systems because they were already limiting us,” he says.

Selecting a business process management tool

The bank evaluated business process management tools from several technology suppliers, as part of its plan to automate banking processes. It chose ActiveMatrix BPM, supplied by Tibco, without going through a tender, as it was already widely used in other parts of ING.

The bank brought together a team of around 10 people, including process design and IT specialists, to automate its banking processes.

It chose distraint orders – a mechanism for recovering costs when customers default on a loan – to pilot the technology. This went live in 2013.

It has now automated nine major processes and more than 10 smaller processes on the Tibco BPM technology, including cheque processing, promissory notes, consumer loans and commercial lending.

Forming partnerships and attracting new customers

The technology has allowed the bank to offer consumer loans through more than 1,500 partner outlets across Turkey. They include grocery stories, post offices, technology retailers and airlines.

Each loan creates a new customer for the bank. When customers take out a loan for a product from one of the outlets, they automatically become a customer of the bank too.

“That was not possible before. The new technology platform gives us a lot of flexibility to integrate into their systems very quickly,” Koseoglu told Computer Weekly.

In one case, ING was able to form a partnership with a Turkish technology store, and integrate it into the bank’s systems in weeks, beating a rival bank that needed months to complete the work.

Introducing mobile banking apps

The bank has developed six mobile apps that give sales staff access to banking applications from mobile devices. “They can use tablets and do sales sitting next to clients, so that gives them a lot of flexibility,” says Koseoglu.

It has also developed three mobile apps for personal and business customers, which allow them to make transactions without visiting a branch.

Eliminating paperwork through automated processes

The technology has allowed the bank to automate tasks that would previously have required back-office teams in branches and at head office to process paperwork manually.

The bank used to have a team of 40 people, for example, to manage distraint orders – now it takes a team of less than 15 people, says Koseoglu. “There [used to be] a lot of variability in time to completion [of distaint orders]. There were lot of errors, and we had no insight into how they performed,” he says.

Now the bank has computerised “dashboards”, which allow managers to follow progress on key processes in real time, and to set service levels for each task.

The project has helped the bank to reduce its cost-income ratio – a measure of cost efficiency – by 15% over three years. And the number of transactions per employee has risen by 38%.

Benefits for customers

Introducing automation has made it easier for customers to deal with the bank, and has eliminated much of the paperwork they had to complete in the past, says Koseoglu.

Previously, customers had to wait half an hour for a loan to come through, but now they can take their money from a cashpoint after only five minutes.

Introducing automation has made it easier for customers to deal with ING Bank, and has eliminated much of the paperwork they had to complete in the past

“We have also significantly reduced the paperwork and requirements for signatures and data points. For day-to-day banking, its much easier to deal with the bank,” he says.

ING Bank now has more than 2.5 million active customers, and its approval rating – measured by net promoter score – has grown by 17 points over the past four years.

“If you look at the brand, we are more and more seen as an innovative and easy bank, compared to others, so the market is recognising the change,” he says.

Integration and adaptation

One of the most difficult technical aspects of the project was integrating the bank’s core IT system and Oracle business intelligence technology with the BPM system.

The bank worked with architects and process control consultants from Tibco to link ActiveMatrix with ING’s core baking system – a project that took six months.

The bank’s employees have had to adapt to working in a more agile and flexible way, following the introduction of the new technology. ING has introduced techniques such as agile development and scrum to manage projects and development. And it has created product owners – people who understood both business and technology – to lead automation projects.

“There is a huge human and cultural component involved. It was not an easy project,” says Koseoglu. 

The bank’s back office and processing staff were involved in the project from the start. “We trained them in lean operations techniques and process design, and we involved them in the design of the new processes,” he says. “That really helped because it gave them a lot of ownership.”

Plans for further automation

The bank has expanded its process design team to 15 people, and plans to continue to automate its banking processes. 

One priority is to reduce the time it takes to approve commercial loans from 25-30 days down to five or six days. In some cases, businesses will be able to arrange commercial loans online.

The process is complex as it involves multiple parties, including sales teams and underwriting teams, and multiple approval processes. But streamlining loan approval for businesses will help ING Bank win more commercial clients, says Koseoglu.

Other priorities include automating international trade processing and improving the automation of business lending.

“After that, we plan to go back to square one and look at the original process to see if there are more improvements we can make,” he says.

The future of banking

In the future, banking will become more integrated into people’s everyday activities and less visible, according to Koseoglu.

Four or five years ago, when you needed a personal loan you had to go into a bank to fill in some forms and sign the papers. “Now you can go into a technology retailer to buy a TV, and if you need a loan, that is seamlessly integrated – you can get it in the retailer,” he says.

Predictive technology will also become more important for banking. ING, for example, uses predictive technology to give its call centre staff an idea of a customer’s likely query before they answer the phone.

“This will continually be evolving, using more data, and [our ability to know the] customer will get better,” says Koseoglu.

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