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The future of the financial professional

Erwin Olijslager, Group Controller ING

ING must continue to do its best so as to still be relevant in twenty years’ time

Erwin Olijslager, Group Controller at ING, says his daughter would like to work at the bank. “That’s great,” he says, “but we’ll need to continue to do our best so as to still be relevant in twenty years’ time. The world has become a lot more complex and less predictable. Clients’ requirements are changing. There are now other players in the market, and the legal and regulatory requirements are become increasingly stringent. As financial professionals, we’ll need to make changes, and that will demand action from our organisation, people, and technology.”

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Podcast (Dutch)

Erwin Olijslager, Group Controller ING, indicates that the financial function must make a move and discusses what that requires from the organization, people and technology. "Listen to this podcast now.

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A complex and less predictable world

“The future of finance” – Erwin Olijslager smiles as he says those words. “We were already talking about that twenty years ago. A lot has changed in the meantime, but our number one priority is still to be in control, to be a safe, secure, and compliant bank. That was true twenty years ago and it’ll still be true fifty years from now. That’s our raison d’être! If it ceases to apply, then customers will leave us. But what we do see is that the world has become a lot more complex and less predictable. First of all, our clients’ requirements are changing. In addition, we no longer compete in the banking sector only with other banks but also with tech companies. There’s also increasing pressure from the regulatory authorities in terms of legislation and regulations. As financial professionals, we will have to be able to deal with even larger amounts of data, because data is really the core of the future as far as the financial professional is concerned.”

“The future of finance. We were already talking about that twenty years ago. A lot has changed in the meantime, but our number one priority is still to be in control, to be a safe, secure, and compliant bank. That was true twenty years ago and it’ll still be true fifty years from now."

Erwin Olijslager ING

Banks versus Big Techs

Competition from Apple, Google, Amazon, and Alibaba – Olijslager notes it with a bit of a smile. “The banks weren’t of course looking forward to it, but if we don’t want to learn from those digital toppers and if we don’t open ourselves up to those kinds of new entrants to the market, then in the long run we’ll only make life difficult for ourselves. Those ‘Big Techs’ are also so big and so dominant that they really are players to be reckoned with. Like banks elsewhere, for example, Dutch banks have started offering Apple Pay. Clients who are passionate iPhone users wanted it. So even though the Dutch banks have an excellent payment infrastructure, you go ahead and offer Apple Pay. That’s good for customer service and therefore also good for the banks. After all, these kind of innovations simply keep us on our toes so as to continuously improve our digital services. Exactly what impact Big Techs will have on the bank’s revenue model in the longer term remains to be seen. At the moment, they don’t seem to be interested in the traditional transformation function of a bank, i.e. attracting savings and converting them into loans. What they want above all is to be close to their customers and get them committed to their digital platforms. Banks will also need to prepare for life as platform companies. But how fast, in what form, and who there’ll soon be room for are all still open to question.”

Investing in innovation

If ING wants to stay strong in the competitive landscape that surrounds its customers, it won’t be able to avoid various methods of collaboration. “We’re starting a lot of stuff ourselves,” says Olijslager. “We’re working closely with partners, such as more than 190 fintechs, with our own customers, and with companies from other sectors. We’re also investing in fintechs via an investment fund. We’re deploying all kinds of innovation initiatives in order to ultimately have an even better proposition for our customers. As financial professionals, we will need to join in with those trends and developments. To do so, we’ll need to understand what’s happening around us and be able to interpret its potential impact on ING’s financial performance. As ING, we want to invest to the full in innovation, but as financial professionals we want to know just what the actual benefits will be. Sometimes, it means taking the plunge. We sometimes receive investment proposals in which a bunch of assumptions are stacked one on top of the other, with exponential growth figures. For me, that feels like jumping out the window and hoping there’s a mattress waiting for me… Unfortunately, you don’t have any firm guarantees for all the assumptions. It’s also always a question of how much your organisation is prepared to invest in innovation and trying out new things. You then hear “learn fast, fail fast”. But that’s an approach that we, as financial professionals, often still find problematical.

What we do have to accept is that investment in innovation involves adopting a longer-term perspective. But at the same time we – as the financial professionals – need to be able to say ‘this far and no further’. Twyp, a payment app in the Netherlands, is a good example of that. ING launched it in the Netherlands, but we then stopped using it because it turned out not to be successful enough. So it was better to stop. In the UK, where we don’t have a banking licence, we’ve launched Yolt, a new app in which you have all your accounts together – for example Barclays, RBS, and HSBC – and on that basis you can do your entire money management.  It isn’t yet producing any great results for us as ING in financial terms, but there are now over a million users in the UK, Italy, and France who are extremely enthusiastic about its functionality.

If we were just to remain stuck in ‘the old way of thinking’, a lot of initiatives would have already been abandoned or wouldn’t even have got started. As ING, we constantly have to weigh up how much we’re prepared to invest in innovation. And how do we define success? Those are pretty difficult questions, because at Finance we’re extremely critical about every euro that we spend. As Finance, you know you have to make investments, but you don’t always know exactly what they’ll yield. I was recently talking to Benoît Legrand, our Chief Innovation Officer, who’s full of ideas for investment. ‘I’d like to give you everything you need,’ I told him, ‘but show me you’re successful’. Look, where innovation is concerned, you sometimes need to be a bit more patient. Ultimately, it’s all about long-term value creation.”

Erwin Olijslager - ING

"I’m convinced that every employee can – and must – add value. Be critical about that, including towards yourself. Go looking for where you can add that value. And if you come to the conclusion that you don’t add much value, then please go and do something else. There’s no room anymore in 2020 for people who stay somewhere just playing the all-too-familiar ‘tourist’."

Erwin Olijslager ING

Regulations

Where data, digitisation, and competition with Big Tech companies are ING’s focus on the one hand, compliance with legislation and regulations takes precedence over everything we do within the bank. And the bar is being set higher and higher. “Instead of aggregated data on a monthly or quarterly basis, we increasingly need to be able to provide financial data on a contract basis or on a daily basis to regulators. That demands a lot from an organisation, and not just its finance people. In the long run, you even end up in a situation where the regulator that analyses our data comes to us and tells us what we need to pay attention to. We then no longer have to explain to the regulator where we see our risks; the regulator itself then has far more insight and a view about it. Data and technology will help us with all this.”

Technology

When deploying new technologies, the question that arises is whether you want to be – and must be – one of the front-runners or whether you should be more of a follower. “At ING we currently have to deal with the fact that compliance with legislation and regulations has the highest priority within the bank, a higher priority than further digitisation,” says Olijslager. “As an organisation you can only handle a certain amount of change capacity. So then as Finance we’re a follower, which in itself isn’t so bad. There are so many new technologies nowadays that can help organisations move forward that you don’t immediately know which one will be the winner. My view is then to let others be the pioneers, and we’ll embrace the solutions that turn out to be really successful. That also gives us time to first fill in a number of preconditions. As Finance, we may well want to have the latest technologies and solutions based on real-time data, but if our back office systems aren’t yet real‑time, for example, it all won’t be any use to us at all.”

Wider-ranging empathy

In the end, no company will be able to ignore data, says Olijslager in no uncertain terms. “If data is going to become even more important, it also means that we as ING need to hold on to people with different profiles – people who understand data, can analyse data, and improve the quality of data and our business performance, so that ING will still be relevant in fifty years’ time. That also imposes different requirements, and demands more wider-ranging empathy from financial professionals. We need people who understand data across the entire chain – from the moment of registration right up to what we ultimately deliver internally to management or externally, for example to a regulator – rather than people who can only interpret a report at a holistic level. The young generation who are now joining us are more open to this than the more traditional financial professionals who’ve been in the business for 25 or 30 years. But they’ll have to go along with developments too, in order to be able to provide insights into the quality of the processes within the bank on the basis of data, or to be able to advise on a new investment on the basis of data. We’re helping our finance staff develop their expertise in this area, and we explain clearly what’s happening in the world around us. We do that each day, for example by deliberately putting together multidisciplinary teams to deal with issues, through targeted training programmes, and by means, for example, of townhalls/college tours on currently topical subjects. And our employees also acquire a lot of information about all this themselves, of course, for example by doing an internship outside the finance department. That’s very instructive. A whole lot of people are enthusiastic about what we’re doing, and the way we’re doing it – so as to ultimately make sure we’re always in control.”

Added value

Keeping control of things also means that as a financial professional you always have to ask yourself various questions. For example: Why are we doing this? “Or, as our CFO Tanate Phutrakul always tells us,” Olijslager concludes by saying, “Ask ‘Why?’. And if you don’t understand it, ask it again. Ask ‘Why?’. As the Finance department, we have to ensure that we can implement our business strategy. Our financial professionals constantly need to ask themselves: ‘What does this or that mean for ING, and how do I ultimately contribute to this through my own work?’ I also regularly ask myself what impact I’ve had. What value have I added this week? I’m convinced that every employee can – and must – add value. Be critical about that, including towards yourself. Go looking for where you can add that value. And if you come to the conclusion that you don’t add much value, then please go and do something else. There’s no room anymore in 2020 for people who stay somewhere just playing the all-too-familiar ‘tourist’. Financial professionals in the Netherlands will increasingly be judged by the value that they add to their organisation.”

"Banks will also need to prepare for life as platform companies. But how fast, in what form, and who there’ll soon be room for are all still open to question.”

Erwin Olijslager ING

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