On Feb. 3, Peter Aceto marked his second anniversary as a regular Twitter user. In tech-savvy Canada that might seem like no big deal, except that he also happens to be chief executive officer of an important financial institution. But ING Direct is not your average bank. For 14 years it has been a scrappy innovator, using the latest technology to sell its consumer-friendly financial products, such as savings accounts, RRSPs and mortgages. Mr. Aceto, who was the eighth ING employee hired when he joined the Dutch-owned startup as a legal counsel in 1996, now leads a staff of 1,100 at ING Direct Canada. His company has 1.7 million retail customers.
How did you get started on Twitter, where you now have almost 4,500 followers?
It really started in a meeting with a handful of employees. We were talking about trends and social media. I immediately went home and did my own research on Twitter. I set up an account and I began to tweet. I have grown to really enjoy the process. You can't tweet six or seven times a day unless you genuinely think there's something interesting about it.
How do you still get your "day" job done?
There are not enough hours in the day [for everything] so you have to pick the things that really matter. [Tweeting helps in]communicating with employees and potential customers … demonstrating our honesty and transparency, and revealing that I'm not a stereotypical CEO, but actually just a normal person.
Do you learn much from following others' tweets?
I follow people who focus on leadership development or coaching, or on exploring the definition of leadership, or who are sharing best practices on how to be a good leader. We're an innovative company and I'm personally interested in innovation and technology, and a lot of people who are really thinking about what's new are there [on Twitter] We also have a lot of customers who interact with us this way, so I get real-time feedback on what's going well and what's not going well.
That's a pretty public place to deal with problems, isn't it?
If you've got the guts to have that conversation in front of everyone, it says to a lot to people that you have nothing to hide, and that if you make a mistake you're going to deal with it properly.
How have you used social media to help refine new products?
We launched our Thrive chequing account in a very social way. We invited 10,000 customers to try it first and interact with us in its final development stages. We got thousands of bits of feedback through e-mail, Twitter and our Facebook page.
As a new generation of CEOs take the reins, will we see more using social media?
Yes. I'm just in the early stages of what is going to emerge as the best practice for how CEOs communicate with their employees and customers. Our customers notice it and they love it.
Would you advise all CEOs to use Twitter?
No. If you don't think it's the right thing to do and you don't want to share in this manner, but you do it [anyway] people will figure you out. People can see right though it if you are lying or if someone else is writing your tweets for you.
You took over as CEO just before the global financial crisis hit. Was that tough?
It was actually a very positive experience for me. It was very galvanizing for the team locally and there were a lot of lessons learned. We [now]spend a lot more time thinking about worst-case scenarios that we didn't think were possible before: What you would do in those situations and how you would protect your customers, and how you would keep the regulator happy?
You're a lawyer, but didn't practise for long before you joined ING. How come?
Even in law school I found I was a bit of a square peg in a round hole. It is a profession of specialization, but I like a whole bunch of different things. And I didn't really appreciate the way people were treated in the culture of law firms. Then I met Arkadi Kuhlmann, the founding CEO of ING Direct Canada, and I was so inspired with what he was going to build that I wanted to work for him.
How did you learn the financial side of the business?
I took finance courses, and I would read our company's financial statements then take the CFO to lunch once a quarter. We would talk for an hour about the ratios and the numbers.
ING Direct was very innovative when it started its high-interest savings account in the 1990s. How do you stay competitive now that everyone else has jumped in?
We were disruptive 14 years ago, and we've been copied. Our big bank competitors have validated everything we've been doing. What's key is having a culture of change and innovation. We need to evolve and change and use technology and serve our customers better.
You've just launched a no-fee chequing account. What other services are you considering?
I get asked a lot about credit cards. We are thinking about what an ING Direct credit card for savers would look like. We have to acknowledge that Canadians are savers but they also need to spend money to live.
Aren't Canadians already too deeply in debt?
Only a relatively small group has pushed the envelope too far. As a country, we are actually quite healthy. I think the government has shown courage in taking pro-active action [to tighten mortgage rules]before problems happen.
Your products have helped force down some fees in Canada. In what segments do Canadians still get short shrift?
Canadians pay the highest mutual fund fees in the world, and they pay the highest fees for chequing accounts in the world. [That's because]there's not a tremendous amount of competition.
Are overall banking fees too high?
In Canada, absolutely.
You've promoted branchless banking, yet you've opened "cafés" in some cities to create a storefront presence. Are branches actually useful?
Our competitors are really good at the branch thing and we can't compete with them on those terms. We're [the right company]for Canadians who feel some degree of comfort helping themselves, and don't need to see someone on a regular basis. But if they need to, we've got a place for most of them. We have cafés in Vancouver, Calgary, Montreal and [at our head office in the north end of Toronto] and we're opening one in downtown Toronto in April. I see more cafés in our future, but nothing that would resemble a branch network.
Has it been hard for ING to break into the Canadian financial sector with a different model than the traditional banks?
We've found it somewhat challenging to navigate the Canadian waters, because of the way the system works. [There are hurdles involving]access to the payment system, and the rules for knowing and identifying your customers. The rules and the infrastructure were not designed for newer models that use technology differently. The government is looking at [changes to]the Bank Act and has a task force on the payments system, so they are doing the right thing, [but]that process is a little bit slow.
How much control does ING's head office in the Netherlands exert over the Canadian operation?
Our head office philosophy has been that decision making should be where the customers are. We have the freedom and flexibility to make the adjustments we need here locally. They can ask us to do things, but the local rules, the local board and the local management comes first. They want to see how we are doing, and they want to make sure we aren't making the same mistakes as other [ING operations]around the world - which is a great benefit of being part of a global company.