ING Direct's, CEO and President, Arkadi Kuhlmann thinks that it is crazy that consumers around the world have to pay fees to their banks for just about anything they want to do at the bank. If you think about it, does it make sense that we give a bank our money to manage and they turn around and charge us fees to handle it? Like Kuhlmann, this does not seem quite right to me.
ING Direct was started in the mid 1990's and was quickly turned over to Kuhlmann to run. Arkadi had a mission to fix the things that he hated about banks. He knew that companies had succeeded in other industries by lowering costs. He also knew that companies that specialized in a few products and delivered those products well succeeded. Lower costs and savings on efficiencies could then be translated into benefits to the consumer through higher yielding interest rate savings and checking accounts.
Another example of Kuhlmann's vision was setting up an online banking operation that had impeccable customer service. ING Direct exemplifies this by having set up a centralized call center operation such that when you call to speak to someone at the bank you actually speak to a live human being. Again, the company saves money by paying very little in brick and mortar expenses like rent and passes these savings onto its customers.
Speaking to a live person alone is worth considering ING Direct versus being dumped into some labyrinth automated phone messaging system that is prevalent at many of the mainstream competiting banks. Out of this and other innovations that Kuhlmann has brought to his company, the rest of the on-line banking world has been left in the trail of this first class mover and shaker.
In the US, ING Direct is the largest internet bank with nearly 100 billion dollars in assets. On average ING pays 10 times what national competing banks pay on their bank savings accounts. Every Orange checking and savings account are the same, no monthly fees. It is not hard to see why customers would love this approach.
I admire Arkadi Kuhlmann for his stand for people and being a man of principal. He demonstrated his willingness to go against the grain during 2005 when the banking industry was lobbying for the new bankruptcy law. ING Direct's main man rebuked the law, which made it easier for banks and lending institutions to go after people who have a hard time paying their bills, by saying that the new law would hurt people who were having tough times.
Another example of Kuhlman's innovations is that ING is probably the only bank that I know of that does not have a 30 year fixed rate mortgage. He thinks that for most people they are a waste of money as 30 year fixed mortgages are more expensive than shorter term mortgages. Given that the national average for someone holding onto their home is less than 7 years why should someone get a mortgage that lasts 30 years and pay more for it. Correspondingly, since ING Direct's intention is to only offer products that are good for the client, they only offer a 5 year and a 7 year ARM. If you are an ING customer and you insist on a 30 year fixed mortgage then the company will refer you to another bank to get your mortgage.
This article has been written by Debt Free Dave. He has been in the Real Estate and Finance industry for over 18 years and is committed to people have an abundant financial life.
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