Business strategy

Today our Think Forward strategy (adopted in 2014) is more important than ever. With our data-driven approach and mobile channel priority, we continue to support our clients to stay one step ahead in life and in business – also during the social and economic shock of the COVID-19 pandemic. The pandemic made us realize how much our society is already digitized, accelerating the trends of clients shifting to mobile channels and the use of cashless payments.

The implementation of our strategy is based on providing a client experience that is simple and understandable, available anytime and anywhere, supportive and inspiring, and constantly improved. Digitisation remains key to this, and we are adapting our processes and services to make banking even safer, more personal, easier and smarter. Combined with our data literacy skills, we see ourselves as a bank that truly knows its clients and anticipates their evolving needs, finding innovative ways to add value, also in areas beyond traditional banking. 

We do all of this to meet the highest possible standards of integrity. Being a safe, reliable and compliant bank – remains our top priority. Our Orange Code puts honesty above all else. 

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Our goal is to empower people to be one step ahead in life and business. In our Think Forward strategy, we promise clients that our banking will be transparent and easy, anytime, anywhere, and enable them to make informed financial decisions. Driven by our goal, the strategic priorities set out in the Think Forward strategy help us focus on the elements we need to be successful.

Strategic priorities

We understand this priority as increasing the number of clients who have many of our products. It is closely related to their experience and satisfaction: the more satisfied clients are, the more likely they are to choose our bank for additional products and services. In recent years, we have consistently increased the number of clients, including primary clients. 

Having the right data at our fingertips will help us achieve many of our strategic priorities. We use the data to personalize interactions with our clients to provide an experience that distinguishes our offering from the competition. It also helps us make sound business decisions and drives innovation. At the same time, we recognize the need to protect personal data and are committed to handling it securely and being open about how we use it. 

New technologies both destroy the status quo and enable new ways of operating. To stay up-to-date, we must constantly evolve. This means creating breakthrough products, services and experiences that support our strategic ambitions and keep us one step ahead. 

Low interest rates provide little incentive for savers to keep money on deposits, which can challenge our traditional business model. Digital platforms are an opportunity to stand up as well partner for our clients in areas going beyond traditional banking, thus opening up to new sources of income for our bank. 

Lines of action

The continual improvement and simplification of our internal processes and systems are the basis of a high-quality digital experience. This allows us to respond faster to changing client needs, implement new products and services faster, and become more flexible and cost-effective. 

We promise our clients that we will keep getting better. This includes accelerating the digitisation of processes to ensure seamless client service and greater efficiency. It is also about ensuring safe operations, stable IT systems and platforms, and the highest standards of data security. 

Delivering outstanding client service requires committed employees who are motivated to go the extra mile. That is why we strive to create positive employee experiences and to develop leaders who can increase efficiency and inspire employees to implement our strategy. Diversity and inclusion contribute to this – people perform better when they can be themselves. We do not tolerate any form of discrimination. In everything we do, we are guided by the values and behaviour set out in our Orange Code and ING Group’s Global Code of Conduct. 

We look at our products and services more broadly than in the light of traditionally understood banking. We want to be a partner for our clients in many areas. This increases their satisfaction, ties them to our bank, and allows us to diversify our sources of income. 

Accounting for the goals of the business strategy for 2020

As part of the implementation of the business strategy, we have set ourselves a few key areas that we worked on in 2020. These areas were designated and formulated before the outbreak of the COVID-19 pandemic, which could have influenced the outcome of their implementation. The results of achieving these goals are presented in the table below: 

Metric

  • An increase of the number of primary clients, in retail Banking and corporate Banking. 
  • A growth of green credit assets. 
  • Top 3 brand recognition as an Internet Bank. 

Implementation

  • The number of primary clients in the retail segment increased by 93.9 thousand, and the number of the corporate segment by 13.8 thousand. 
  • We recorded an increase in the volumes of green loans by 15% y/y. 
  • We received the „Best Mobile Banking App” award in the „World’s Best Corporate /Institutional Digital Banks in Central & Eastern Europe 2020″ competition and the title of „CEE’s Best Digital Bank”. 

Metric

  • Compliance with the requirements and recommendations of the Polish Financial Supervision Authority. 
  • Non-financial risk ratio within the risk appetite. 

Implementation

  • We have completed 3 regulatory projects. 
  • Improvement of the Compliance control efficiency ratio by 7 pp y/y. 
  • We kept the operational risk level within the declared risk appetite. 
  • Over 90% of employees systematically participate in training in the regulatory area. 

Metric

  • Further development of the Well-being programme. 
  • An increase of permanent employee commitment measured with WPC. 
  • Promotion of diversity and inclusion policies.  
  • Promotion of green and pro-health initiatives among employees. 

Implementation

  • We have conducted a number of workshops and webinars supporting financial well-being. 
  • We resigned from conducting the WPC study, and instead conducted two editions of the OHI Pulse study; despite the pandemic, the involvement of our employees is still high, above 80%. 
  • We joined the Coalition for Friendly Recruitment. 
  • We have taken numerous actions in relation to our employees in connection with the COVID-19 pandemic (see more). 

Metric

  • System availability and capacity. 
  • Propagation of knowledge on IT security and awareness of risks related to cybercrimes. 
  • A leader in the field of modern mobile solutions. 

Implementation

  • The availability of ING Business was 99.96%, and the availability of Moje ING – 99.87%. 
  • We have implemented the new ING Business Mobile application. 
  • Implementation of new systems protecting the bank and its clients against malware. 

Metric

  • Development of a system integration strategy. 
  • More intensive use of Artificial Intelligence, Machine Learning and Cognitive. 

Implementation

  • The commercial balance per FTE increased to PLN 32.8 million (+ 6.3% y/y). 
  • The cost/income ratio deteriorated to 44.3% (+1.3 pp y/y) due to the negative impact of the pandemic on revenues and an increase in regulatory costs (+ 38% y/y). 
  • We have developed a system integration strategy. 
  • We have implemented a complete client onboarding process based on video verification. 

Business strategy goals and the main risks of their implementation in 2021

Metric 

  • Increase in the number of clients, including primary clients, and their activity. 
  • Increasing activity in self-service channels. 
  • Maintaining a high level of client satisfaction (NPS), with priority on client experience. 

Ambitions 

  • We want to have over 2 million primary clients in the retail banking segment and over 160 thousand primary clients in the corporate banking segment. 

Metric 

  • Improvement of the Compliance control efficiency index and the Compliance risk level index 
  • Maintaining the level of operational risk in line with the declared risk appetite.  

Ambitions 

  • The declared level of appetite for operational risk is below 2.5.  

Metric 

  • Implementation of a hybrid work model for identified organisational units. 
  • Further development of the well-being programme. 
  • Promotion of brand value in the area of sustainable development, with priority for volunteering in the field of ecology and forestry. 

Ambitions 

  • Development of the benefit offer (including development of the cafeteria).  
  • Continue to simplify the job structure. 
  • Developing a new approach to working conditions for the post-pandemic period. 
  • A series of health conferences for employees. 
  • Development of activities aimed at Talents. 

Metric 

  • Building the awareness of employees and clients in the area of cybercrime. 
  • Further work on the use of cloud solutions. 

Ambitions 

  • Availability of Front-End systems at a level not worse than in 2020. 
  • Reduction of negative events felt by clients by 15% y/y. 

Metric 

  • Continuation of the transformation of the profile of the retail and distribution network. 
  • Developing a concept for full digitisation of processes. 
  • Raising knowledge and awareness of data, including personal data. 

Ambitions 

  • Continued reduction in the number of meeting places in line with the trend of previous years.  

Metric 

  • Develop and implement a sustainable finance strategy. 
  • Development and implementation of an approach to climate risk management. 

Ambitions 

Our medium-term ambitions

  • GDP – after a decline in 2020, we assume a clear rebound in GDP growth in the medium term at a level of at least 4%. 
  • Inflation – we assume it will stay at an elevated level of at least 3%. 
  • Interest rates – we assume their stable level in 2021-2022 and their increase in the next year. 
  • Unemployment rate – we assume its gradual decline from 6.2% at the end of 2020. 

Our medium-term financial ambitions compared to the results for 2016-2020

2016 2017 2018 2019 2020 Ambitions 
Loans/Deposits  81.5% 83.8% 87.6% 90.7% 82.6% ~85%
Interest margin  2.67% 2.88% 2.92% 2.95% 2.63% >2.4%
Costs/Income  48.5% 44.8% 44.5% 43.1% 44.3% <45%
Return on Equity (ROE) – adjusted for MCFH  12.8% 13.0% 12.8% 12.8% 9.4% >10%

Risks and opportunities in achieving the goals of the business strategy in 2021

Risks related to the implementation of the business strategy in 2021

  • Progress in immunisation and the unfrozen economy.  
  • Changes in the lobar market (job cuts, greater emphasis on remote work, acceleration of robotisation and automation).  
  • Balance sheet management challenges arising from client behaviour, new investments and government relief programmes.  
  • Instability and risk factors related to the pace of macroeconomic recovery. 
  • The size of the budget deficit and public debt  
  • Risk of further rate cuts.  
  • Limited effectiveness of MPC’s policy in regards to the interest rate management in light of increasing inflation. 
  • The result of the PFSA’s initiative for a sectoral solution for the historic CHF loan portfolio. 
  • Tax interpretations and regulations regarding credit losses on the CHF portfolio. 
  • Benchmark reform (IBOR). 
  • Changes in the rules regarding the MREL requirement (deferral, change of the calculation formula, target levels). 
  • The shape of the Polish banking sector is constantly changing, resulting in the level of competition and increased marketing expenses. 
  • The growing risk of bank and client security in the digital world results in increased IT and cybersecurity spending.  
  • The complexity of IT systems and their workload could make applications and systems unavailable and/or unstable.  
  • Moving to cloud solutions. 

Chances in achieving the goals of the business strategy in 2021

  • Acquisition of new clients. 
  • An increase of the share of primary clients in the overall number of clients. 
  • Use of the potential of electronic banking. 
  • Increased ecological awareness of the society. 
  • Increased access to green energy sources. 
  • EU climatic neutrality. 
  • Access to new technologies. 
  • Recovery plan for Europe and distribution of its funds. 
  • Growing business volumes. 
  • Increased importance of the result on fees and commissions in revenues. 
  • Cost effectiveness. 
  • Target level and path:
    • BFG funds, 
    • Capital requirements/MREL. 

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