It’s been nearly a year since Scotiabank officially acquired ING Direct, snapping up the online bank for $3.1 billion back in November. Scotia promised to keep its hands off ING’s operations, opting to keep the bank as a separate, standalone entity.
For the most part, Scotia’s been true to its word. Earlier this year, ING closed its mortgage broker division, citing an overlap with Scotia’s objectives. ING continues to sell mortgages direct to consumers through its website and call centre.
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Aside from that change it has been business as usual for ING, a pioneer of no-fee online banking in Canada
ING Direct customers react
I had the chance to speak with Peter Aceto, CEO of ING Direct, earlier this summer. After we discussed his hilarious appearance on The Daily Show, we talked about how ING’s customers reacted to news of the Scotia sale and what we can expect from ING going forward.
Aceto said nearly 10 percent of its 1.9 million customers contacted ING following the sale to Scotia, expressing their concerns through social media, email, and phone calls.
“Some of our customers were disappointed and skeptical about the sale, but most took a wait and see approach,” said Aceto.
He estimates fewer than 3,000 customers have closed their accounts and the online bank is on track to open 103,000 new accounts this year, which is on par with last year.
Fewer banking options
Consumers have a right to be cautious. RBC swallowed up Ally Financial and wasted little time shutting down Ally’s consumer accounts and integrating operations. When TD acquired MBNA, Canada’s fourth largest credit card issuer, it waited a year before slashing the benefits on the popular Smart Cash rewards credit card.
There’s no question Canadians have fewer choices about where to bank when compared to consumers in other countries. Less competition due to regulation has given us a stable banking sector – the envy of the world the past few years – but has also made it more expensive to bank here.
Meanwhile, the big banks continue to increase fees, offering discounts only when you give them more of your business. It’s more convenient to bank in one place, but you’ll still pay more than if you shop your business around.
Aceto said one benefit of the merger will be integration with Scotia’s ATMs, which is one reason PC Financial stands out among the no-fee banks. Their customers get free access to 3,800 PC Financial and CIBC ATM’s.
What’s Next For ING?
With Ally eliminated from the Canadian banking scene earlier this year, all eyes are on Scotia’s plans for ING. The company has until May of next year to shed the ING Direct name and rebrand itself.
Aceto says a decision is still to be made, but one thing is clear – Scotia will not be in the new name.
“We won’t be called Scotiabank 360,” he said, alluding to ING Direct USA rebranding as Capital One 360 earlier this year.
One item on the forefront is the introduction of a cash back credit card.
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“Cash back is simple, convenient, and it ties back to savings, all things that align with our values,” said Aceto.