ING Wholesale Banking has innovation labs in Amsterdam, London and Singapore. Paul Spronk heads ING Labs Singapore, having held this position since 2018. Prior to this, Spronk worked for fintech payments company Payconiq, which originated in ING’s Chief Innovation Office in Amsterdam - he later joined ING’s Wholesale Bank and helped to set up its global innovation team.
Today, from the city-state of Singapore, Spronk leads his team to drive innovation in the global trade ecosystem. His focus on different value spaces derives from where the bank traditionally has a strong footprint. For example, ING Labs Singapore is ideally located in a technologically advanced trading hub of Singapore, hence it is focused on the trade value space, covering the entire ecosystem of goods that are traded globally and the adjacent network of services and financial flows. This sector expertise and leverage on innovation enables ING to play a role in improving industry efficiency and addressing structural challenges.
According to Spronk, the team has a three-pillar strategy and works on:
Greenfield ventures that create long-term impact for ING and its clients. These ventures and initiatives can go beyond banking business models in addressing client needs as the global trade ecosystem evolves.
Venture partnerships with a clear client-driven platform strategy in mind. ING invests in partnerships with startup, scale-up and corporate partners, with the aim of developing multi-sided business ties and models with open architecture and governance structures that enable the bank to create value-added products and services clients.
The roll-out of PACE, INGs innovation methodology that combines a lean startup, and Agile way of working with design thinking. It offers tools that enable the bank to develop relevant solutions to internal and external problems.
Improving forecasting beyond a coin flip
With advances in new technologies such as AI and machine learning it has become possible to do things that were previously hard for the industry.For example, Spronk shares that the Singapore lab has developed a software venture called SoptAI, an AUTO-ML powered demand and cash flow forecasting system that optimises supply chain operations and financing.
“Within the industry, the accuracy of forecasting can sometimes be as low as 50 percent, the same as flipping a coin,” he says, adding that “with SoptAI, early proof points show that we are able to improve the accuracy with double digit figures on most of our client use cases, saving the industry millions of dollars. The system has a proprietary automated model selection engine that helps us to build a scalable business.”
SoptAI could potentially lower the need for working capital, demonstrating ING’s commitment to truly helping its clients to stay a step ahead, even at the cost of traditional banking products. For the bank, such ventures also generate new non-interest income revenues, which are particularly important in a low interest environment.
The shipping industry is a significant contributor to Singapore’s economy. Within this sector, ING Labs Singapore is building a venture called Kapsool. “This is essentially a digital agency workflow platform in the marine port ecosystem. Its goal is to reach an efficiency level matched to that of airports,” says Spronk.
He explains how such greenfield ventures begin development, with long-term impact in mind. “Now, before you start building, if you're within our lab and building a venture, we encourage people to look start with a problem in mind, is this problem real? And how big is it for our clients and the industry if it can be solved? If there is enough room for impact we like to quickly build an iterate on a solution and we do that with trusted development shops and partners to help design and build the product. This is how we discovered Ming Labs."
Ming Labs offers both design and software development services and has a strong sense of customer-centricity across its teams. "The people over at Ming Labs are team players,” Spronk states. “If you walk into our office, you'll find at any given day about two to five people from them working with us and I think it would not have been possible to build Kapsool as quickly without them." Spronk emphasises that as a venture moves from ideation to market-fit state, flexibility is paramount when working with vendors and development partners. "Ming Labs was aligned with this understanding and has been key to this venture,” he says.
Against a backdrop of mounting regulatory pressure and the need for ever better Know Your Customer (KYC) processes, ING is moving to meet this demand head-on by creating a module called Blacksmith. “This will help the bank perform KYC more easily while still maintaining the quality of the due diligence,” says Spronk.
To assist with the creation of a minimum viable product, ING is collaborating with long-time partner Synechron, which Spronk confirms is “doing an excellent job”, as the bank works towards taking Blacksmith to market.
Innovation: building the nuts and bolts
At ING Labs Singapore, Spronk and his team supports the roll-out of PACE, a proprietary innovation methodology developed by the bank. "PACE combines the attributes of a lean startup with agile working, design thinking and customer-centric innovation, all neatly fitted into a framework to make everyone within the organisation speak the same language when talking about innovation,” he explains.
[fig 1. Breakdown of the PACE methodology]
Hand in glove: finding the right partner
Spronk shares the bank’s perspective when it comes to partnerships: “ING understands that it cannot do everything itself and so we are always looking for partners to assist us on this journey, whether they are start-ups, scale-ups, or corporate partners.” When asked what ING looks for in a partner, he shares his belief that ideal partnerships are strategic and not merely for financial return, noting that “we look for companies with the technological capabilities to help us and our clients to stay relevant in the future.’’
He cites Silicon Valley-based fintech start-up, Flowcast, as an example of an ideal partner. The firm specialises in smart credit decisioning through its credit analysis capabilities and machine learning-based algorithms.
“Some of our larger wholesale clients can also benefit from these enhanced credit algorithms within their business and when these are optimised then the need for working capital, which is traditionally something that banks provide, is reduced, for us this is not a problem as we like to put the clients interest above all and believe this will make them see us as a trusted partner for the future.” Spronk notes.
Flowcast’s CEO Ken So, is optimistic about the impact of this venture, where the technology used will make credit available to the underserved. The firm’s platform also allows organisations to accurately use non-traditional data sources to predict risks. He adds: “We believe that it won’t be long before every lending decision will be driven by AI in order for lenders to stay competitive. ING understands the impact that AI will have on credit and reinvents its credit decision process. We look forward to expanding our partnership with ING."
This is a perspective that Spronk shares, noting that “we are also willing to disrupt ourselves with the aim to help our clients to be successful.” This isn’t limited to Spronk’s work in Asia. He notes that businesses with great potential and crosses his radar are referred to the appropriate regional lab.
When working with startups, Spronk and his team have much to offer. “Naturally it's about providing mutual value,” he explains. “We are an ideal partner in assisting startups in getting off the ground thanks to our wide industry knowledge, a large client base, deep industry knowledge and capital, all from a trusted global brand. These attributes are integral to startups looking to upscale, as having the backing of a larger company makes obtaining trust from clients and capital easier for a startup.”
Dream big and start small
As Spronk and his team look ahead, it is clear that they show no sign of breaking momentum. "The industry continues to digitise as it has done for the last decade and more technology driven opportunities are opening in the DLT, AI and ML landscapes,” he says. “The readiness and availability of data increasing over the years is going to change a lot. We want to make our own contribution and help our clients with that transformation to ensure that we are, as a bank, are still an important, innovative and relevant player in the future."