David Rasson on Embracing Change at ING
“I think we probably overestimated the short-term impact of fintech,” says David Rasson, the Center of Expertise Lead for ING’s Innovation Center in Belgium and the Netherlands. “But we might underestimate the long-term impact.”
Rasson’s group deals with startups in all stages, from investing to bringing them into Fintech Village, the bank’s accelerator program, and helping them work on problems alongside bankers and eventually, perhaps, become part of the bank’s suite of products.
“Change, that’s what I love the most,” Rasson says of banking. This is not a common sentiment in an industry that is inherently conservative out of necessity, hemmed in by regulations and responsible for safeguarding the money of consumers and businesses. But Rasson loves change because he enjoys learning, and is passionate about all the new technology emerging in the world of fintech.
He believes it is essential for bankers at all levels to continue learning about new technology as well as interacting with customers in order to learn what motivates them. Fintech will be part of the solution, and interacting with new companies building new technology has become deeply ingrained at ING.
As for the startups themselves, Rasson is a believer that we have reached “peak fintech” — “There are more startups than problems,” he said, but that should excite banks rather than discourage them, because it means there are many smart people out there looking to solve the problems banks face everyday. Listen here to see how ING is perfectly positioned to reap maximum advantage from “peak fintech.”
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Phillip Ryan [00:00:00] Welcome to Bank FinTech Fusion from CCG Consulting Group on this podcast, we discuss banks and fintechs working together and go over what works and what doesn’t. I’m Phillip Ryan and today I’m joined by David Rasson, who is Center of Expertise Lead Innovation ING for Belgium and the Netherlands. Although he’s got more of a global focus, as you’ll soon hear. And you’ve been at IG for you’ve had quite a career there.
David Rasson [00:00:28] Yes. In fact, I’m not sure I’m willing to unlock my age, but I know I leave it up to you to judge. I’m spending half of my life and that’s the exact number. So then you have something like an ID the bank.
Phillip Ryan [00:00:42] All right. Well, welcome, David. And you have a very interesting LinkedIn title. You call your job being no nonsensical, inauthentic general manager with tons of energy and passion for transformation and innovation. So where do you get all that energy at your young age?
David Rasson [00:00:59] Yeah, what is giving the energy? I think it’s, in fact, treating kind of a red wire throughout my career as everything that is related to change. That’s what I love most. And being particularly in this role as a heading an innovation team, what is a personal purpose in life is to keep learning. So I’m really passionate about all the new technology coming our way and especially how it’s going to impact our behavior as a customer, because I don’t have a tech background, but I really try to understand how it is going to impact our lives. And that’s a second pillar. I think the third one is also something very personal. I love to work with young people, so I hate getting older. And the reason why I didn’t answer my age, but I love to work with young people inside the bank, obviously as a mentor of talents and people in my team who have a great team of younger and. Yes, but when you’re in this fintech ecosystem, obviously you meet a lot of great people, young entrepreneurs, all willing to change the world for the good. So that’s what is giving me energy here.
Phillip Ryan [00:02:05] Yeah, we heard a little bit of that earlier today when we were together that how can you serve young customers without young employees? Right. I think there’s there’s a lot of truth to that, with that statement. What part of innovation is it that you’re so passionate about? And is it about the problem or is it about all the ideas that are coming out?
David Rasson [00:02:27] A bit of a well might be a European answer. I think I love both, but for different reasons, I think on the problem side. And that’s one of the reasons why they put me in this role after a few decades of being in the real bank. Innovation is all about being relevant, I think, and there’s enough problems to be solved in the current industry, financial services, whether it’s on the compliance side or in order to still automate processes. So, yeah, on the problem side, if we can have impact, that is allowing us to do things 10 times better, faster, cheaper. That’s giving me energy. Obviously, having started my career on the commercial side of the bank, I started as a branch manager. In fact, I’m still very passionate about the customer. So that’s where the opportunity side comes in and the opportunity to develop new business models. So it’s a bit of a balanced view, both are giving me energy. The red wireless for me. Can I generate impact? That’s what it’s for me, the most important thing here.
Phillip Ryan [00:03:31] Do you still get to connect with customers in your current role?
David Rasson [00:03:34] Oh, yes, I do. I try to be smart in how I’m doing that all but each time. We are also a bank very present in the in our market leading markets, Belgium and the Netherlands. If I have the opportunity to speak directly to customers, I rarely refuse the offer.
Phillip Ryan [00:03:53] So you saying your LinkedIn, you talk about being no nonsense and about being authentic. Can you explain a little bit why it was so important to have those words there?
David Rasson [00:04:02] Well, they’re not necessarily linked to my current role. No nonsense. I mean, while this is who I am as a person and what I think is truly important and making the connection any way to do the overall innovation ecosystem, what I notice is what we call a lot of innovation theater all over the place. So I really try to stay away from that part of the ecosystem. So, yeah, also on the startup scene, I think there are more startups and problems being resolved. So I think there is a bubble. I think a lot of banks talking about it’s not that many banks who are really serious about doing things. And at least from my side, I try always to be very honest and straightforward. So it means if the startup is reaching out to us, I try to treat them with respect. And it means they can count on a very straightforward answer, being a yes or a no or not now, but not the little nephew being. Well, maybe one day let’s keep in touch. And that’s why startups start to hate banks. And I understand why. So I think yeah. So my mantra is, in fact, I love my team to treat startups like they would probably love their kids to be treated if they would found a company. It can’t be that difficult. So stay respectful. But there to be honest in your feedback as well, if they are developing something which is not relevant, because I think there are also a lot of startups that don’t grasp how complicated financial services is. And so for me, there are a lot of young people with a very nice ID around. But yeah, whether it’s really relevant for the banking industry, it sometimes requires in-depth knowledge of the industry. And that’s why I like, for example, startups with people in their team coming from the industry, especially when they’re close to the core of the bank.
Phillip Ryan [00:05:58] Have we reached peak fintech, do you think? We’ve reached the maximum number of fintech companies or can’t keep going on forever.
David Rasson [00:06:07] The future will tell. I don’t know my personal opinion on it. If I would refer to the traditional hype cycle, I think we are a little bit beyond the hype cycle where people start to be a bit disappointed about the impact is generating both on the adoption side of customers and also on the startup side, that the start will be disappointed because they are sometimes unable to get their first customer on board. This being said, I do think that once we are, we might be beyond the peak. But I think it should not inspire us to become complacent as an industry, because I do think in the long run, things will unavoidably go in a certain direction. So I think we probably overestimated the short term impact of the whole fintech hype, but we might underestimate the long term impact. So that’s a bit, I think, the summary.
Phillip Ryan [00:07:05] Yeah, that’s that’s encouraging. So you’re now running your fourth Fintech Village and this is an accelerator, which you spoke about this a bit before. An accelerator that is known to help companies bring a product to market in as little as four months. I’m going to go through some numbers here. So you had one hundred and twenty one applications this year. You can correct me if I’m wrong and you settled on seven that were more mature and more scalable. So can you explain how Fintech Village fits into the larger picture at ING?
David Rasson [00:07:39] Yes, so ING is very much active in the whole fintech ecosystem. In fact, we have four approaches. So first of all, we develop our own fintechs. Maybe a good example of that one is Euate. I’m not sure whether you’re familiar with Euate, but that’s kind of an aggregator which has been launched in the U.K., I think in November, two years, two years ago. That is 100 percent powered by Engy, but we spend it out to protect it from the bank. So we develop our own fintechs. Second way is we invest in fintechs. So ING has its own corporate venture capital fund of 300 million. We launched it, I think, also in November, two years ago in the European market.
Phillip Ryan [00:08:24] Is that is that tied to fintech village or is that a separate?
David Rasson [00:08:26] It is a separate activity. So but there is an opportunity for our companies that are looking for money. Obviously, we connect them to our corporate VC to see, but it is independent. So it’s not a prerequisite for us. But obviously we would be stupid if we detect promising startups and we are considering to have a commercial partnership with them. It would be stupid, not at least to consider investing in them. Yeah, and then the third way we acquired a couple of fintech primarily in but maybe not a familiar name here in the US, but to Be Vision is an example of a company we acquired in the Netherlands and a fourth way to collaborate. And that’s where FinTech Village kicks in is developing commercial partnerships with startups. And that’s where FinTech Village comes into play. That’s how it fits the bigger picture. Yeah.
Phillip Ryan [00:09:18] And how did FinTech Village come about and were you part of that creation?
David Rasson [00:09:23] I was not part of that creation. So it was founded in 2016. So we finished our fourth cohort and we are going to open applications soon for our fifth edition. The purpose was twofold. I think the purpose first was to increase the speed of innovation inside ING and also develop new business models. That was the second primary purpose. So there is a cultural aspect to it. By being opposed to fintech has an impact on the way how people are thinking about the future. So those were in fact, the two primary goals when we started. It started as an initiative and ING Belgium expanding its scope to the Netherlands. And also we try to well, one of the things we have been struggling with in the early days, we worked a lot with early stage companies and we now try to work with more mature companies because ING tries to build a pan-European platform. And obviously, if you’re working with very early stage company, it is difficult for those startups yet to scale across Europe. And you might not even want to go in that direction because it’s probably a recipe to kill the startup if you’re doing it. So that’s where we pivoted. So a little bit more towards startup scalable and then really early stage companies because we’ve experienced and that’s how Fintech Village itself is probably still a startup. We are learning from what we are doing and try to pivot and fine-tune and tweak the program as we keep playing.
Phillip Ryan [00:11:01] Yeah, we see startups come to the United States and sometimes they come here to die because the regulatory landscape is so complex. You know, if they’re trying to move money, they need state by state licenses. And yeah, very, very challenging situation. In Fintech Village this year, there were four main themes the instant bank, the open bank, the secure bank and the SME bank. How did you pick these for this come out of problems that ING was having or was it something in the sort of macro landscape?
David Rasson [00:11:35] A bit of both. We truly believe that it starts with the real problems on the floor. Because key to our success of the program is the high commitment from the business sponsors from day one. So while the fund typically starts with interviewing and updating on a yearly basis our problems and opportunities, so we do that in direct conversations with our heads of the business unit. And then in a second step, we look at which one of these problems and opportunities are probably eligible for a partnership with a fintech. And then the third criterion we kind of handle to assess whether it’s relevant is the problem big enough or the opportunity big enough to consider onboarding a startup in our fintech accelerator program from a group perspective. So that’s kind of the bottom up approach from the business units being the market leader, Belgium and the Netherlands. Obviously, we try to be in sync as well with the priorities, a few more disruptive innovation on group level. So dare we try to map with the prioritized values basis which we review every now and then to give an example of one of the value spaces we are exploring. It’s things like housing, rec, tech, digital identity, shopping. That’s all examples of value spaces where ING wants to be active in with more disruptive energy and innovation. And it’s in that mingling of both Bottom-Up needs captured in discussions with the business and these priorities being perceived on group level. That’s where Fintech Village kicks in as a program trying to move the needle to fit both business needs from the business unit and be in sync with the overall group priorities.
Phillip Ryan [00:13:30] Matching them with the larger. So as you work with these startups are scale ups, what are the two or three things that they should focus on to to make working with a bank productive? If you were to maybe not wearing your current hat, but if they just approached you on the street and said you have some advice.
David Rasson [00:13:53] It’s a difficult question. Well, one of the things I should not say, but I’m going to give it a try anyway. I think that they need to be patient and patient doesn’t mean that they need to accept the current run through times which which go sometimes really way above what should be acceptable. But anyway, banking is complex. So really, in order to do something and to and fully integrate, it’s a being in sync with all risk and compliance procedures. It is naive to think that this is feasible in a timeframe of weeks. You can test a solution probably in terms of weeks, but really making sure it’s truly embedded and it’s really scaling in a bank like ING, it’s not working. I think, when they are approaching a company, a big corporate, they typically are taught not to talk to the head of innovation, so they are always surprised to hear me repeat an echo that recommendation, but I would like to noon’s it. My recommendation to FinTech is always don’t talk to the head of innovation more than one time because I think we have a role to play in to help them in getting the right people around a table in the bank. But if they need to discuss four times with me, there’s probably something wrong. But I think the added value overall is there in order to make sure that indeed you have the right people, because if you don’t do that, they might be happy because they talk to the head of whatever business unit and then they are further down the process and they discover that there might be many heads of that business unit because that’s what they discover. I discussed with the head of compliance, there seemed to be more than one head of compliance in this bank, and that’s one of the pitfalls. So I think the banks who do have a central innovation team, I think you should use them, but you shouldn’t only talk to them. You need to make sure that very soon in the process, you have other people around the table that are put forward by that central innovation team. That’s, I think, what will be my second recommendation to the startups.
Phillip Ryan [00:16:04] And you obviously came to your role after working in you called it the real bank, but say, working in the rest of the bank, I’ve seen an alternate strategy where people are brought in from outside the industry, people from the retail industry or so on, and to bring fresh ideas to banking. I don’t know what’s your take on that approach?
David Rasson [00:16:28] Well, I can only answer the question why I have been selected because with my only question I had when I was approached by my CEO asking me to to pick up this role, obviously he knew that I had this passion for new technology where we started this podcast. So that was known. You need to have this passion. But the main reason why he has chosen a seasoned banker was because I know the organization and it is a lot about internal stakeholder management, knowing who to talk to, making sure you reach out to what we call the positive troublemakers or the frustrated enthusiast’s, people who are willing to do something on top of their daily jobs. And I think my biggest challenge and the biggest challenge and the disadvantage of choosing a seasoned profile like I’m one, is that it’s feasible to learn what it takes to work with startups. But the real challenge is to unlearn how we always have been doing things because we are a bank. That’s a personal challenge, to be honest, but it’s also a massive challenge for the industry because, yeah, we need to adapt to this typically different way of working to give an example and not wanting to blame particular departments, for example, when we engage with a supplier. One of the first things we asked them to fulfill is a lengthy paper form to see whether they’re eligible to work with a company like ING. And one of the policies is we don’t do business with loss making companies.That’s pretty difficult for a startup because if you’re brand new. So that’s kind of very stupid examples of where we need to unlearn how we do things. And I think another challenge for banks as a whole is the willingness to give up something, because if you want to work together with a startup, you’ll need to give up something. It could be data. It could be yeah, it could be anything. But if you’re not willing to abandon something, you should ask yourself questions.
Phillip Ryan [00:18:37] You’re not going to make money right out of the gate. I think it will be difficult working with a startup.
David Rasson [00:18:41] And so for me, the real question we need to ask ourselves as an industry because banks always were a bit arrogant so far in the ecosystem and had the impression that they could choose the right startups. I can see the most promising startups now start to choose which bank they want to work with, rather the opposite. So the question I always ask myself, if the accelerator program would go the other way around would be a reversed accelerator program where the startups could choose the bank they want to work with. What would be the kind of questions that they would be asking? Right. And how ready would we be to win that beauty contest compared to other banks? And then it’s mostly very silent in there. If I give that kind of comments inside the company.
Phillip Ryan [00:19:30] What has been the favorite tech innovation that you have worked with or overseen over the past few years? Can you name a favorite?
David Rasson [00:19:39] FinTech or tech as a whole?
Phillip Ryan [00:19:40] Either one.
David Rasson [00:19:43] Well, if it’s tech as a whole, to be honest, there are so many cool things around, but yeah, the red wire and the one and only red wire and all that cool stuff which is on the market right now in which changed our lives forever, I think it’s a yeah, it’s the hardware underpinning it. It’s the iPhone that’s, I think the biggest innovation from the last 10 to 20 years. On a fintech perspective, I think overall without mentioning a particular name. But I think, yeah, what I see a lot of these new banks doing from a customer experience point of view, and that’s challenging us and pushing us forward because. Yeah, let’s take the example of the credit card business. When I look at the customer experience of some of these new banks, while we still have a lot to learn as a big incumbent on how to improve our processes, being it from, well, the rate they are charging you, but also all the paper handling with the receipts, etc. There are a lot of these new banks that are doing this. Yeah, just like a fingerprint. So. Yea..
Phillip Ryan [00:20:57] Right. Very different, very different experience from working with the traditional bank. So. We’re probably approaching a recession, an economic slowdown in the next year or so, and there’s probably going to be pressure put on innovation groups in some form or another. Having been at ING through the previous financial crisis, how are you viewing this and how are you preparing yourself to to face this?
David Rasson [00:21:28] Well, I think. We are feeling already, indeed, the pressure is rising because indeed we have potentially a recession coming our way and it’s already hitting us, especially in Europe, with structural low interest rate environments which are going to hit us in terms of our bottom line PNL, obviously. On top of that, there’s massive regulation already coming our way and I think it will only increase in the in the future. So I think there will be a lot of pressure on. Yeah, indeed. Appetite and budget for, I would say, customer facing innovation. So that’s clear on the good side. Talking just for ING, we have been investing a lot since we launched our think forward strategy in summer 2013 in more disruptive innovation, and that takes some time. So we still have a solid funnel of ventures that we are currently building that are about to be deployed in the markets. And my biggest worry is indeed to keep feeding the funnel at the beginning because you can never become complacent in this market. So I think talking for the industry as a whole, I think in the short term it will be a lot of focus on using fintechs and innovation to solve our massive problems in terms of things like KYC anti-money laundering, because you cannot keep throwing bodies at the problem. So that’s a huge challenge and it might be difficult times the coming years for indeed fintech more focused on the yeah, on the customer customer interface. This being said, I think the direction is clear. And I think with all kind of initiatives boosting competition like in Europe, PSD2, new legislation, which is going to be live within a few weeks from now, I think the people who still think that this is going to go away and be a hype, I think that’s not going to happen. So the fintech scene is there to say, I think.
Phillip Ryan [00:23:46] Final question, if you could do just one thing over again in your career, knowing what you know now, what would that be?
David Rasson [00:23:54] Well, so many cool things about it. I would probably not be a banker anymore. I might have been an entrepreneur.
Phillip Ryan [00:24:03] There’s still time.
David Rasson [00:24:04] Yeah, well, there are some there’s these Silicon Valley rules that say that once you’re above 35, it’s difficult to found a company. On the other side, I see as well that the most successful startups, the average age of a CEO is slightly above 35. I think. So now bringing it back to your first question, what is giving me energy is to share some experience and the expertise I built up over the years with young entrepreneurs and independent from the fact whether we are doing business with them or not. It’s giving me so much energy if I can help somebody in the industry. So, yeah, but if there would be one time at one thing I would do differently, I would probably have found it. I should have founded the company is somewhere 20 years ago.
Phillip Ryan [00:24:47] David, thank you so much for joining us.
David Rasson [00:24:50] Thanks for having me.
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