How Ing-Diba Conquered the German Retail Banking Market
26 Pages Posted: 12 Mar 2008 Last revised: 2 Apr 2008
Date Written: 2005
Abstract
Over the last four years, more than 50,000 German bank employees lost their jobs and aggregate debt write-downs in the German banking market added up to 100 billion euros. Yet, these four problem-stricken years witnessed one of the biggest success stories in German banking, namely the rise of ING-DiBa to become Germany's fourth largest retail bank with over four million customers. This paper is a case study on ING-DiBa that attempts to explore its internal and external success factors. We find that information technology has enabled ING-DiBa to implement a consistent business model which German competitors find almost impossible to imitate. Its consistent business model is built on offering a very limited number of aggressively priced products through direct channels, highly standardized processes, automated customer interfaces and very strong branding. Given the immense success of ING-DiBa's plain cost-leadership strategy, we perceive the German retail banking market as an interesting example of how technology can force open encrusted market structures.
Keywords: IT development, strategic success factors, direct bank, German financial system
JEL Classification: G23, L23, L25
Suggested Citation: Suggested Citation
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