Innovation Ahead of the Curve

1. InnovationAhead of the Curve Arkadi Kuhlmann

3. What if the Idea Had a Name? ING DIRECT was born in an age of broken promises. If we were going to earn people’s trust, we had to do it by turning our backs on what marketing had become.

4. What if We Started Over? When you’re trying to re-invent something, nothing can be sacred.

5. Banking or Retailing? “Do not go where the path may lead; go instead where there is no path and leave a trail”- Ralph Waldo Emerson

6. What are we doing? Leading Americans Back to Saving How we do it? We Simplify Financial Products Our Brand Promise Save Your Money TM How Do We Innovate?

7. Value Based Differentiation CustomerAdvocacy BrandExperience CompetitiveAdvantage EmployeeEngagement Cost EfficientOperational Excellence

8. Short Term Focus • Rules Driven • Supply Focused • Follow Best Practice Industry Models • “Hire for Skill” • Hide Behind Bundled Offers • Make Money • Multiple Products • Out-source Work • Back-end Focused • Serve Everyone • Rigid & HierarchicalOrganization Structure • M&A Focused • Driven by Financial Targets • Innovate Once • Maintain Status Quo • Opportunistic Growth inDisjointed Areas • React to Technological Changes Traditional Sustained Innovation Stimulus Execution • Strong Organic Growth • Stable Profits • Constant Innovation • No Entitlement Culture • Strategic Growth inNew & Selected Areas • Exploit TechnologicalOpportunities • United by a Cause • Build a Franchise • Few High Value Products for Select Customers • In-house Work • Front-end Focused • Marketing & ITDrive Company • Nimble & AdaptiveOrganization Structure • Long Term Focus • Behavior Driven • Leapfrog Standards • Demand Focused • Retail Model • “Hire for Attitude” • TransparentStandalone Value Disruptors

9. What if Everyone Could Win? That was the impossible question that gave birth to this idea called ING DIRECT.

10. Building a Track Record – Consumers Love a Winner • # 1 Direct Bank • # 1 Savings Bank • # 9 Bank(residential mortgages) • #15 Bank (domestic deposits) • #19 Bank (assets) • 7.6M Customers • 8 Cafes President Obama Inauguration Event, Delaware Office Minnesota Café New York Café Seattle St. Cloud Source: FDIC Q3’09

11. Innovate Products Savings Interest Checking Investment Mortgages

12. Innovate Every Moment of Truth • 3,989EO ATM transactions • 36,474Purchases using EO • 9,179Billpay transactions • 11,912ShareBuilder trades • 104,279Web transactions • 60,000ACH pushes • 149,000ACH pulls • 690Emails received from customers • 2,405Sharebuilder Mobile Views • 10,134Customer calls • 6,500Customer calls answered in 20 seconds • 16,363Clicks on our web banners • 304,228Customer web logins • $4,523,193Interest paid • $43,000,000 Gross mortgages funded • $47,253,000Net deposits inflow • 955New Sharebuilder Accounts • 7,120Web Impressions on WeTheSavers.com • 2,933Cups of coffee served • 4,443Café customers • 3,181New OSA accounts • 1,256New customers • 93,000Sharebuilder log ins • 3,000,000People watching our TV ads • 360,791Cross-Sell Emails • 454,548Acquisition Emails • 1,716Website Password Recovery

13. Branding

14. Engaging Messages

15. Continuous Innovation Rewarded Once Golden Boys Soul Searchers Disruptors Palm Southwest Apple Source: Yahoo Finance • Palm • Kodak • Xerox • Yahoo • AOL • Chrysler • Ford • Southwest • Microsoft • Starbucks • Borders • Apple • 3M • Google

16. Marketing TM Experience marketing in Manhattan with live promoters Savings promotion on Black Friday Marketing campaign on Hulu.com Orange Brand Driver campaign

17. Keep Your Customers Connected Websites our Customers Visit FaceBook You Tube Hulu Twitter

18. 180% 160% 140% 120% 100% 80% Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Length of Customer Relationship Customers’ Vote of Confidence Delivering on Brand Promise Wins Returning Business 7.6% Average Balance CAGR 91% Planning to increase balancewith ING DIRECT Satisfaction with ING DIRECT 9 out of 10 Deposit Balance Growth (% of Year 1 Opening Balance) Thinks ING DIRECT is overall better than others 82% Ease of becoming customer of ING DIRECT 9 out of 10 Thinks ING DIRECT website better than others 75%

19. What if We Gave Something Back? This has never been just a business. It’s a cause.

20. ING DIRECT is Customers and Their Communities…

21. We, the Savers

22. New Normal • Price conscious consumers • Growing federal deficit & public debt • Higher natural unemployment • Threats of inflation/ stagflation So who will win ?

23. Think Greenfield

24. Re-engineer Supply-driven Innovation Financial services’ need for profit Demand-driven Innovation Consumers’ need for value Innovate The Customer The Process The Product

25. What if We Aren’t Finished? There is always going to be a better way to do this.

27. Road to HappinessLessons from Innovation • Build Innovation-centered Culture:Hire for Attitude and Reward Failure • Create Cycles of Creative Destruction:You will Never be Finished! • An Inventor’s Kryptonite: Financial Planning and Marginal Optimization • Be Demand-side Driven: Avoid Supply-driven Thinking • Facing the Brutal Truth:An Organization’s Capabilities Define its Deficiencies • Markets that Don’t Exist Cannot be Analyzed • Outside Forces Control Allocation of Your Internal Resources:Align Them!