ING Group’s international retail banking arm has now allowed external software and app developers to create relevant apps through their API. Developers can access customer data to create innovative apps.
The bank was building software development kits where third party developers can use to create apps to sell through the app store. This project is going to be launched on a trial basis in France as part of the bank’s sub-$300,000 pilot projects all around the world. If the trial becomes successful then it will be launched in other countries as well.
Bankers and marketing specialists do not necessarily know what the customers want. This gives customers who are also developers a chance to make apps that customers can relate to. The likelihood that an app created by a customer is embraced by other customers is high.
ING has started these low-cost and customer-centric projects to avoid governance processes and boost speed to market. Other projects include allowing customers to see their bank statements from Facebook via a widget and social media tools that monitor posts about ING and its competitors in Turkey.
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Saul van Beurden, Chief Information Officer of ING Retail Banking International: “We have decided to open up a software development kit with open APIs for the development of next-generation apps, not by ourselves, but by an open community of developers. The marketing people and IT people of our bank don’t know everything … We are going to tap in on the creativity and needs of people. If you are a customer and a good developer; you have the chance to build [an application to meet your demands].”
I invite you to watch a short video on ING Direct’s Innovation Labs.
Earlier this year, Credit Agricole and Axa Banque started a trend in the banking industry by launching their own digital app store ‘a la Apple’. The two French banks released a SDK to selected third parties, including some small and young startups, to let them tap into the bank’s precious customer data. So this is no surprise the pilot will launch in France first.
This approach acknowledged that financial institutions don’t necessarily have the latitude, the structure, the resources, or even the knowledge internally to innovate, or at least to innovate swiftly. And with the pressure from so many innovative new players in digital financial services (in areas such as crowdfunding, gamification, crowdsourcing, mobile, payments…), a short time to market became more and more critical.
But those banks face several key challenges such as convincing third parties to invest resources and money building apps without any guarantee on revenue generation, urge their customers to install and use those apps on regular basis.
In your opinion, how successful can those proprietary API / mobile app store initiatives be? Will customers ever pay for those banking applications, even the ones with a great UI? What is the best business model to make them work for the bank and its partners?
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