Arkadi Kuhlmann
ING Direct's no-frills banker for the 'soon to be rich'
Few bankers would describe their work as being on "a journey," say their bank was focused on "financial literacy," or discount their industry by noting that while money may be "the oil of the economy," it "doesn't actually save babies or go to the moon."
But Arkadi Kuhlmann is no ordinary banker. And yes, he has a description of those other guys as well-"generally dull and boring with flat heads and sideburns." Ouch.
The president and CEO of ING Direct USA, the Internet-only banking arm of the Dutch financial conglomerate ING Group, relishes what, in banking at least, is a bad-boy attitude. While most banks love credit cards because of the fees and interest payments they bring in, Kuhlmann calls the cards "the opium of consumerism." When the banking industry pushed Congress to tighten bankruptcy codes and make it harder for consumers to write off debts, Kuhlmann opposed the measure, saying it was akin to "using a cannon to kill a mosquito."
But what has really set him apart from his fellow bankers is his intense focus on giving consumers what they want, without frills or hidden fees. And what many banking consumers seem to want is no hassle and high interest rates for their savings accounts. ING Direct has both in spades, offering a range of easy-to-access savings accounts, as well as CDs and other simple products with some of the highest interest rates in the country. The catch is, there are no branches, no ATMs, and no hand-holding.
Profit. When ING Direct opened in 2000, few banks felt the need to follow its lead. But no one is discounting Kuhlmann's business model now. Kuhlmann's bank has 4.3 million customers with deposits of $46.5 billion. In 2004, with only 1,000 employees, it generated $250 million in pretax profits.
To Kuhlmann, those accounts represent more than just dollars and cents. They represent converts to the idea of fiscal solvency. "We aren't our brother's keeper, but we are putting the idea of savings in front of people and tempting them," he says, adding that it is time to make the idea of savings "cool." Kuhlmann has opened a few cafes around the country where potential or current customers can grab a quick jolt of gourmet coffee and speak with an ING salesperson about their financial goals.
While most banks have focused on serving the needs of "rich Americans," Kuhlmann says ING Direct serves the 270 million Americans who are "soon to be rich." His job, he says, is to make that dream happen one savings account at a time.
This story appears in the September 25, 2006 print edition of U.S. News & World Report.