Transforming Banking: How ING's Agile Revolution Redefined Success
Next week I hope to release part 1/4 of my book for review. I'll release it to the review mailing list. If you haven't joined the mailing list, you can do so below.
This weeks post is taken from Chapter 4, and looks at ING and their Agile adoption. This was a large scale and multi-national adoption with significant business impact and change. Let's dive in ...
In 2015, Dutch multinational bank ING initiated a comprehensive Agile transformation to enhance adaptability, customer-centricity, and innovation. Facing increasing competition from fintech startups and evolving customer expectations, ING recognized that its traditional hierarchical structures and siloed operations were inadequate in a rapidly changing environment (Harvard Business Review, 2019). Projects that once took an average of nine months to two years to complete were no longer competitive in a market where customers demanded real-time, personalized digital experiences. Inspired by the success of Agile practices in the tech industry, ING reimagined its structure, culture, and decision- making processes (Denning, 2018).
To achieve this transformation, ING adopted cross-functional 'squads'—agile teams of 8–10 members from disciplines like IT, marketing, and product development (McKinsey & Company, 2018). These squads owned specific customer journeys from start to finish, operating with full autonomy to make decisions and prioritize tasks. Within six months, over 350 squads had been formed, fundamentally reshaping how ING delivered value to its customers.
Within six months, over 350 squads were established, involving nearly 3,500 employees (ING Bank, 2017). These squads were organized into larger units called “tribes,” each focusing on broader objectives like enhancing digital payments or personal savings services. Tribe Leads coordinated the work of squads to ensure alignment with strategic goals. Additionally, "chapters" were created to foster technical excellence within specific domains and promote knowledge-sharing across squads (Harvard Business Review, 2019).
This Agile transformation significantly reduced management layers, replacing traditional departmental silos with a flatter structure that encouraged cross-team collaboration. Managers transitioned from controlling projects to enabling and coaching teams, fostering a culture of trust and empowerment. A key focus was delivering value to customers through iterative development and regular feedback loops, allowing squads to adapt swiftly to changing customer needs. For instance, ING’s mobile app, which previously required over a year for updates, began rolling out significant new features every few weeks, keeping pace with rapidly evolving customer expectations (McKinsey & Company, 2018).
Implementing Agile on such a large scale presented challenges, including resistance from middle managers whose roles were diminished and difficulties among employees adapting to more fluid responsibilities. Aligning the Agile model with regulatory requirements in the banking industry also required careful planning. ING invested heavily in training, with over 1,000 managers undergoing Agile leadership courses within the first year (ING Bank, 2017). Employees were educated on Agile principles through workshops and e-learning modules. Leadership prioritized transparency, regularly updating employees on the transformation's progress through biweekly town halls and accessible digital dashboards (Harvard Business Review, 2019).
The results of ING's Agile transformation have been significant. Product development cycles, which previously averaged 18 months, were reduced to 3-6 months, with smaller projects completed in as little as 4-6 weeks (Denning, 2018). Cross- functional collaboration improved markedly, breaking down silos and fostering innovation. ING’s digital offerings, such as its mobile banking app, achieved a 20% increase in user satisfaction scores within the first year of the transformation (McKinsey & Company, 2018). Financially, the impact has been substantial. By 2022, ING reported a net result of €3,674 million, reflecting the efficiency gains and enhanced customer experience resulting from its Agile transformation (ING Bank, 2022). Moreover, customer retention improved significantly, with a reported 20% increase in active digital banking users in key markets like the Netherlands and Germany. The accelerated delivery of digital services also enabled ING to capture a larger share of new customers, with an estimated €1 billion in new deposits added annually through digital channels (ING Bank, 2017).
ING's Agile transformation offers several key lessons for organizations undertaking similar initiatives. Active involvement of senior leadership was critical to success, with leaders endorsing the transformation and modeling the behaviors required for Agile to thrive. ING adapted Agile practices to fit its unique needs as a financial institution, demonstrating the importance of flexibility in applying frameworks (Denning, 2018). Cultural change was as important as organizational restructuring, with a focus on empowerment and collaboration ensuring the transformation's sustainability. By 2022, ING had extended its Agile model to operations in over 40 countries, demonstrating the approach's scalability (McKinsey & Company, 2018).
ING's Agile transformation exemplifies the power of structural change in driving innovation and adaptability. By dismantling silos, empowering teams, and embracing a customer-centric mindset, ING not only enhanced operational efficiency but also solidified its position as a digital banking leader. Its journey provides valuable insights for organizations navigating the complexities of transformation in a rapidly evolving world (Harvard Business Review, 2019).