ING Direct to enter credit card market

ING Direct has bowed to customer demand and is preparing to offer a credit card for the first time in its 20 years in the Australian market.

ING Direct executive director customer delivery, Lisa Claes, said the bank was currently building the product, which would make a feature of the bank's distinctive approach to packaging rewards.

Speaking at the RFi Customer Experience Workshop in Sydney yesterday, Claes said: "There is scope for innovation in cards. There is a massive opportunity to service customers better."

Over the past year ING Direct has launched a couple of innovative customer loyalty initiatives.

Since May, Orange Advantage Offset Home Loan customers have been eligible to receive a one per cent rebate on their monthly mortgage repayments (up to A$3000).

To be eligible for the rebate, customers must also have an Orange Everyday transaction account and they must deposit salary of at least $1000 into it each month. The rebate will be paid into the transaction account.

And customers who deposit a minimum of $1000 a month into their Orange Everyday transaction account receive rebates on their ATM fees.

These programs are designed to encourage customers to use ING Direct as their main financial institution.

Claes said the benefit for customers was that rewards were linked to "the need the customer bought the product for" and had greater relevance than points towards "a Nespresso machine."

Claes said rewards "linked to the proposition the bank was trying to satisfy for" provided greater customer equity.

"It is very easy to say you are customer-centric but do you give back without the customer asking? Customers want to see action," she said.

ING Direct has held out against offering a credit card for a long time, saying it wouldn't enter the market until it had something distinctive to offer.

For the past few years it has pursued a strategy of moving from being seen as a specialist financial institution, offering a high-yield savings account and attractive home loans, to a main financial institution.

It has based its MFI marketing on its transaction account. Claes acknowledged that for many customers the credit card forms the basis of the MFI relationship.