How Ing-Diba Conquered the German Retail Banking Market

26 Pages Posted: 12 Mar 2008 Last revised: 2 Apr 2008

See all articles by Andre Guettler

Andre Guettler

University of Ulm - Department of Mathematics and Economics; Halle Institute for Economic Research

Andreas Hackethal

Goethe University Frankfurt - Faculty of Economics and Business Administration; Goethe University Frankfurt - Research Center SAFE

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

Guettler, Andre and Hackethal, Andreas, How Ing-Diba Conquered the German Retail Banking Market (2005). Available at SSRN: https://ssrn.com/abstract=853724 or http://dx.doi.org/10.2139/ssrn.853724

Andre Guettler (Contact Author)

University of Ulm - Department of Mathematics and Economics ( email )

Helmholzstrasse
Ulm, D-89081
Germany

Halle Institute for Economic Research ( email )

P.O. Box 11 03 61
Kleine Maerkerstrasse 8
D-06017 Halle, 06108
Germany

Andreas Hackethal

Goethe University Frankfurt - Faculty of Economics and Business Administration ( email )

Theodor-W.-Adorno Platz 3
Frankfurt am Main, 60323
Germany

Goethe University Frankfurt - Research Center SAFE ( email )

(http://www.safe-frankfurt.de)
Theodor-W.-Adorno-Platz 3
Frankfurt am Main, 60323
Germany

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