Time Magazine Story about ING Direct
Somehow I have the feeling that ING Direct has lost its luster as the leader of online banking, the position that it held for several years before everybody in the banking industry started to offer “direct” banking with similar products. My reason is the rates of their Orange Savings Account have consistently fallen behind its major competitors. Currently at 4.50% APY, you can easily find a dozen online banks, big and small, that pay savers 5+% APY for their money. If you are a rate-chaser like I am, you probably don’t find ING’s savings products appealing as they used to be. I almost emptied my ING account last year after I found many better places to park my money, despite having been their customer for more than 5 years. So is ING Direct seeing its customer basis shrinking?
Not really, according to a story in the June 2005 issue of Time magazine. The article says
ING Direct has more than 5 million account holders, with 100,000 to 150,000 more signing up each month.
And the new account growth at ING Direct hasn’t slowed down due to competitions. The response from its CEO Arkadi Kuhlmann to other banks that offer rates higher than ING’s is “Knock yourself out.”
So far, ING Direct still holds the largest share of internet deposits in the US and the pure online bank “ranks 24th among U.S. banks when measured by total deposits,” just behind regional bank Sovereign Bancorp.
So what’s the force that propels ING Direct ahead? The article list a couple of them and one is their customer service:
When customers call the toll-free number, a person – an actual person in Los Angeles, Minnesota or Delaware, not an automated menu, not an operator halfway around the world – picks up the phone.
This may be true, but when I just called to test it, I was greeted by a recorded message and was told there are 15 people ahead of me (they probably need to heir more people).
In addition, the article also mentioned that the introduction of ING’s paperless checking account last year was to fend off competitions from rivals. However, there are still demands for paper checks and what ING is doing now is print and mail about 25,000 paper checks every month without any charge for postage (I know BoA also sends out paper checks for their online billpay service if the fund can’t be delivered electronically, but maybe at a smaller scale).
To me, however, customer service doesn’t play a decisive role in choosing an online bank. What matters the most is rate. If their rate is not competitive, I don’t see myself going back to ING Direct no matter how good their customer service is.
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