The ING bank does not yet see the goal of reaching 10 million customers in Germany as achievable. According to Germany's CEO Nick Jue, he aimed for this target in 2017 and has been confronted with it repeatedly. "The 10 million mark has haunted me for six years," he said on Tuesday evening at the International Club of Frankfurt Economic Journalists (ICFW) in Frankfurt. The goal is still "quite a good distance away," but the bank remains committed to achieving ambitious targets.

Currently, the German subsidiary of the Dutch banking giant has around 9.2 million customers, with a net addition of 130,000 customers in the first half of the year due to a bonus interest rate promotion, states Jue. The direct bank largely lifted the previously common negative interest rates in July 2022 and increased the interest rate on savings accounts a few months later. With a current promotional interest rate of 3.5% on savings accounts and a base interest rate of 1.25% from November on, the bank is now roughly in the middle of the competition. "Certain customers leave us because they always want the highest interest rate."

Jue admitted that some customers are dissatisfied with the bank's service and occasionally experience long waiting times, especially during periods of high customer inquiries. "We are still not as digital as we want to be," Jue conceded. A small portion of customers is unhappy and switches, sometimes only temporarily, to competitors. "We need to change that," Jue emphasized. "Every customer counts on the way to the 10 million mark."

The bank is continuously working on digital offerings, such as allowing customers to change the installment rate of consumer loans through the app. Calls from the app are also possible, eliminating the need for additional verification on the phone. New savings options for small business owners are in preparation. Among competitors, the neobank Revolut stands out with its simpler account opening process. "It's even easier than ours, and that bothers me," noted Jue.

In general, the more customers a bank has, the higher the continuous outflow, Jue explained. His calculation is that to gain a net 200,000 customers, the bank needs to acquire about 400,000 new customers to offset the departures. Following the recent issues faced by Postbank, which led to a flood of customer complaints, ING, like other competitors, gained customers, indicated the bank CEO. However, he declined to comment on the number of customers gained out of courtesy to the competition.

When ING announced its 10-million goal in August 2017, it had 8.5 million customers. The bank aimed to reach the target within two years. In March 2021, the bank announced its decision to exit its mass business in Austria. If the approximately 550,000 customers in Austria were still part of the German ING, the 10 million mark would be within reach, Jue presumed.

Compared to fintech companies, established banks are in a strong position because they can offer a variety of products. A broad range of offerings, combined with advanced digitalization and ease of use, is essential for customer retention.

When ING started acquiring customers in Germany two decades ago, it often provided only a form and a TAN list, as was common at the time. Many customers still do not use online banking or the mobile app, as stated by Jue.

"Guiding these individuals into digital services is a challenge. We don't impose anything on our customers", emphasized Jue. As a result, the bank maintains various systems and approaches. "We are still young but a bit old at that." Nonetheless, the pandemic has accelerated digitalization. "Germany has become a bit more Dutch because it's now more digital," said the Dutch CEO.

The ECB's change in interest rates strengthened the bank's results, but the tailwind is fading. Competition for higher savings interest rates is "in full swing," and at the same time, the ECB will only moderately increase the benchmark rates in the next few months, expects Jue.

A potential increase in the unremunerated minimum reserve, which is being considered by the ECB, would have a noticeable impact on ING's profit and loss statement. Banks currently have to deposit a reserve of 1% based on deposits with the ECB. Because the money there is not earning interest, it is already a burden for the institutions. The industry sharply criticizes a possible increase. It is still unclear whether and to what extent the minimum reserve will rise.

Meanwhile there would be less significant impact if the EU were to ban distribution fees for investment funds in non-advisory business, explained Jue. Revenues from fund rebates held by investors in their securities accounts are not substantial in the bank's financial statements.