This morning, ING Bank announced a worldwide restructuration in which 7,000 jobs will be cut, about half of which in its Belgian branch. The restructuration did not come as a surprise to many employees and observers, in spite of ING having done not too badly at all – the last decade saw a net profit of around 11 billion Euro, with over 7 billion in dividend, and a 30% increase in the CEO’s remuneration last year. So it is not that the bank is on the brink of collapse or that its shares are nosediving. Thus, why this range of deep-cutting measures?
ING communicated its decision in a statement called “Accelerating Think Forward“. The restructuration is part of a strategy implemented since 2014 (“Think Forward”), which now demands acceleration, more specifically “a number of initiatives to further improve the customer experience, further grow primary customers and lending, and increase efficiency”. The bank has done quite well, as we have seen. However, says CEO Ralph Hamers, “[w]e also promised to keep getting better and that is exactly what today’s steps are aimed at. Our recent successes allow us to do so from a position of strength.”
The past is, thus, just the take-off for the future. This future is by definition not known. But nevertheless, ING reads the signs:
“Customers are increasingly digital and bank with us more and more through mobile devices. Their needs and expectations are the same, all over the world, and they expect us to adopt new technology as fast as companies in other sectors. In order to continue to lead in digital banking, we need to offer a better customer experience, that’s instant, personal, frictionless and relevant. At the same time, banks are confronted with continuous regulatory burden and a prolonged period of ultra-low interest rates. These factors put pressure on the returns which are necessary to fund growth and investments, and cover our cost of capital.”
Observe how ING suggests that the prime mover behind this plan is the customer, whose preferences, demands and expectations have shifted into a direction that demands “a better customer experience, that’s instant, personal, frictionless and relevant”. Money only appears at the very end of the statement:
“In line with our strategy, we will be introducing ING Group financial targets for 2020. We will maintain our ING Group CET1 ratio above the prevailing fully-loaded requirement, currently 12.5%, with a leverage ratio above 4%. Our target for the cost/income ratio is 50-52%. In light of the continuing regulatory uncertainty, we are not updating our RoE target (currently 10-13% of ING Bank IFRS-EU equity), but we reiterate our intention to pay a progressive dividend over time.”
Given that we are talking about a bank operating in a competitive global banking universe and owned by shareholders demanding specific levels of return on investment, it is relatively safe to suspect that the real prime mover is profit, and that the new customer experience is a means to that end.
The reversal of those two elements brings us to the TINA (There is no alternative) frame. In an earlier piece I discussed how a particular discursive use of identity forms part of the TINA frame; here we see similar things happening with history. And to summarize the point, we see how in the ING statement, a particular distinction is made between
- history with agency, and
- history without agency
The history-with-agency is the strategy presented by the bank. Its plan “Thinking Forward” already incorporates a clear agentive frame – it’s the bankers who think – and “accelerating” that plan is obviously also something decided more or les sovereignly by the bank’s executives. The strategy, in short, articulates how the bank intends to control a future through specific measures designed to benefit from…. a history over which they have no agency. And this history-without-agency is described in the paragraph in which the developments in customer expectations and market circumstances are given.
From a purely factual viewpoint, the bank has co-shaped all the conditions presented in that paragraph. ING customers have, for years, been pushed towards more digital and less branch-based banking activities through measures implemented by no one else but the bank (and often contested by the customers themselves). The same goes for the “regulatory context” referred to, including the “ultra-low interest rates”, which occured often both in response to existing banking problems, as well as at the request of banking lobbies. None of these forces, thus, can structly be depicted as alien, outside forces over which the bank has no control. The same counts a fortiori for the elephant in the room: profitability target setting. The shareholders are the bank, and as we have seen in the fragment above, they have received 10-13% percent “Return on Equity” – a quite extraordinary level of profit, reflecting, one could say, quite unrealistic levels of expected profit growth. And these target settings are not forced upon the bank by outside forces.
The paradox, however, is that ING presents the entire operation as a rational response – their agency – to forces of history that they can only follow, by trying to remain ahead of them. In other words: they are suggesting that they respond to historical forces by shaping them. “Sorry, but there is no other way to respond to future challenges than to create them ourselves.” This paradox is nicely woven into the delicate discourse of cause-and-effect in the statement, and this particular discursive move feeds into the TINA frame: things are what they are, there is no alternative for history than a future shaped by us. We can see this nicely in this final fragment:
“While not all plans we present today are finalized, the intended initiatives are expected to result in a reduction of ING´s workforce in Belgium by around 3,500 FTEs and by around 2,300 FTEs in the Netherlands for the years 2016-2021. These numbers include the intended move to an integrated banking platform, with the remainder of functions affected spread over intended programmes in IT, operations, Wholesale Banking and various business support functions. At the same time, we will add colleagues in parts of our business where we expect to accelerate growth given our plans to continue to attract new customers and increase lending to support the economies we are active in.”
It’s all about agency here, and incidentally the agency articulated here touches precisely those causal forces previously described as beyond the grasp of the bank – the objective directions of history in the banking world.
At the heart of TINA, there is a lie – we all know that. The lie revolves around the suggestion of non-agency, of absolute and uncontrollable actors shaping fields of action in which those using the TINA frame claim to have just minimal, responsive, and therefore rational agency. While in fact, they are the actors. In other words: they pretend to be the victims of a future they themselves are engineering. And this future is, of course, an absolute and undisputable given, to which they can only adjust their course of action.