ING Direct 2002 Annual Report Download - page 49

Annual Report 2002 · ING Group46
Report of the Executive Board
Strategy and financial results
The strategy of ING Direct is to be a low-cost
provider of financial services by achieving scale
in large mature markets by offering clients best
value for money and excellent service via call
centres, direct mail and the internet. ING Direct
uses a high-rate, no-fee, no-minimum savings
account as the entry product. Upon reaching
the necessary scale, ING Direct complements the
savings account by cross-selling a focused range
of other wealth accumulation products such as
mortgages, mutual funds, e-brokerage, pensions
and life insurance. After the savings products,
mortgages are the most important product.
The distribution strategy of ING Direct
focuses on two major distribution channels, the
call centre and the internet. The call centre is the
pulse of the business for ING Direct. The internet
and the Intelligent Voice Response (IVR) are two
other main channels and they process an
increasing number of transactions. On average,
40% of the new accounts are activated via the
internet and more than 60% of the incoming
contacts with existing clients are fully automated
(IVR or the internet). ING Direct cafés and co-
operation with intermediaries and tied agents
from sister companies and third parties form a
third supplementary channel. ING Direct makes
use of intermediary networks to sell more
complex products.
ING Direct reached a break-even result in
the third quarter of 2002, one year earlier than
expected. In the course of 2002, five of the seven
business units (Canada, Australia, Spain, the USA
and Germany) contributed to the Group’s profit.
The mature business units Canada and Australia
already exceeded ING Group’s RAROC hurdle
rate of 18.5%.
Growth and other developments
Due to overall commercial success in the
business units, ING Direct more than doubled its
size in 2002. In each of its markets, ING Direct
has achieved a leading position in the direct
banking segment and a top-ten position based
on savings balances in four of the markets.
The total number of clients grew to more
than five million and total funds entrusted
 
To be the world’s leading direct distributor of simple, value-added retail financial
products through a standardised, high-volume and low-cost operation.
 
INVESTING FOR THE FUTURE
2002 unfolded as an exceptional year. Due to the ongoing
momentum and heavy usage of the internet and the shift to
favourable savings market conditions, 2.5 million new clients
joined ING Direct to bring the total to more than five million
clients. The total of funds entrusted increased by EUR 31
billion to EUR 55 billion. Brand awareness developed strongly
in all countries and acquisition costs declined to an average of
below EUR 100 per new account in 2002. In total, ING Direct
reached profitability in the fourth quarter of 2002, a year
earlier than expected. ING Direct is a low-cost, high-value
financial services provider active in seven large countries
(Canada, Spain, Australia, France, USA, Italy and Germany).
 
5 million clients and EUR 55
billion funds entrusted at
year-end 2002
—
Break-even in third,
profitable in fourth quarter
2002
—
40% of new accounts via
internet; 60% of customer
service handled via
internet/voice response
—
Acquisition costs per
account below EUR 100
HOMEPAGE
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