ING Groep N.V. (ING): 5 FORCES Analysis [Nov-2025 Updated]

You're looking for a clear, no-nonsense breakdown of ING Groep N.V.'s competitive position right now, so let's map out the five forces using the latest 2025 data. Honestly, the picture is complex: you've got intense rivalry in Europe, fueled by slowing growth, while customers hold significant sway due to low switching costs and high price sensitivity-remember, 68.4% of retail customers compare rates. Still, the biggest moat is the sheer scale, with total assets hitting €1.087 trillion, making new entry incredibly tough despite the rising threat from FinTech substitutes. We need to see how ING manages this tightrope walk between high depositor power and the battle for lending volume; check out the full breakdown below to see where the real pressure points are.

ING Groep N.V. (ING) - Porter's Five Forces: Bargaining power of suppliers

When you look at who supplies the critical inputs for ING Groep N.V. (ING), you see a mix of highly sensitive retail customers, specialized technology partners, and the overarching force of regulation. The power dynamic here isn't uniform; it shifts depending on which supplier group you're analyzing.

Let's start with the most fundamental supplier: the depositors providing core funding. Depositor power is definitely high; customers switch if interest rate difference exceeds 0.3 percentage points. This sensitivity means ING must constantly monitor its deposit pricing against competitors, or risk immediate outflows. To be fair, the core funding structure helps mitigate extreme concentration risk because it comes from a fragmented retail deposit base, not a few concentrated institutional sources. This fragmentation means no single depositor can dictate terms, but the collective sensitivity of the many is a constant pressure point.

Moving to technology, the power of technology vendors is moderate. ING has been working to maintain a diverse portfolio of suppliers, which naturally lowers the leverage of any single provider. We estimate switching costs are in the range of 3-5% of annual tech spend. Given that ING's annual ICT spending was estimated at $1 billion in 2024, this translates to an estimated switching cost of between $30 million and $50 million per year for major component replacements. Still, the bank is actively consolidating technologies under global standards to avoid the double cost incurred when both global and local services are active, which helps manage vendor lock-in.

Regulatory bodies act as a powerful, non-negotiable supplier of constraints. The European Central Bank (ECB) has set the fully loaded Common Equity Tier 1 (CET1) requirement for 2026 at 11.00%, effective January 1, 2026. As of September 30, 2025, ING's CET1 ratio stood at 13.4%, giving them a buffer, but this requirement dictates the capital structure and limits operational flexibility. Furthermore, the labor market for specialized digital talent is tight, which directly impacts operating costs. We saw this pressure in Q2 2025, where operating expenses, excluding regulatory costs and incidental items, rose 4.5% year-on-year, largely due to wage inflation and investments in scaling the tech platform.

Here's a quick look at some of the key supplier-related figures we see:

The pressure from labor is also evident when looking at the cost base. Total operating expenses in Q2 2025 were €3,034 million, which included €78 million in regulatory costs and €116 million in incidental costs. The underlying cost base growth, driven by wage inflation and investment, is what you need to watch closely as you model future efficiency gains.

The power of these suppliers, especially depositors and regulators, means that ING's strategic actions are often reactive to external pressures rather than purely proactive growth initiatives. You've got to manage the cost of talent and the cost of capital simultaneously.

ING Groep N.V. (ING) - Porter's Five Forces: Bargaining power of customers

You're analyzing ING Groep N.V.'s competitive position, and the customer side of the equation is showing clear pressure points. The bargaining power of customers for ING Groep is currently elevated, driven by transparency in pricing and low friction in moving to alternatives. This force is a major factor in how ING must price its products and invest in its digital experience.

Customer price sensitivity is high, with 68.4% of retail customers comparing product rates. This high comparison rate means that any significant deviation in ING's pricing-whether on mortgages, savings, or current accounts-is immediately visible and actionable for a large majority of the customer base. Also, switching costs are low, reflected by an average annual customer switching rate of 3.7%. Honestly, that low churn rate suggests that while customers are shopping around, ING's core service or brand loyalty is retaining a solid base, but the 3.7% figure still signals vulnerability to aggressive competitor offers.

The segment structure of ING Groep amplifies this customer leverage. Retail Banking is the largest segment, driving 67% of Q2 2025 revenues, increasing customer leverage. When the majority of your revenue comes from a segment where customers are price-sensitive and can easily leave, the power shifts toward the buyer. To put this in perspective, in Q2 2025, the share of capital allocated to retail already exceeded 53%, showing where the growth focus-and thus, the customer focus-lies.

Digital platforms give customers instant access to competitor rate comparisons. This is the mechanism that makes the high price sensitivity a real threat, not just a theoretical one. You see this play out in the acquisition metrics: ING's strong growth of 1.1 million mobile primary customers year-on-year in Q3 2025 shows acquisition strength, but not retention defintely. They are clearly winning the battle for new primary relationships, which is great, but it suggests that the market is actively churning and choosing ING over others, meaning ING must continually win the comparison game.

Here's a quick look at the scale of the Retail Banking segment and the digital momentum:

The high customer power means ING must focus on non-price factors to maintain loyalty, especially since digital tools make price comparison effortless. This means service quality and digital experience become the primary differentiators, not just rate sheets. The pressure is on to make the digital experience so sticky that the low switching cost is overcome by the convenience of staying put.

Key factors driving customer power include:

• High customer price comparison rate: 68.4%.
• Low annual customer switching rate: 3.7%.
• Retail Banking drives 67% of stated Q2 2025 revenue.
• Strong digital acquisition: 1.1 million new mobile primary customers YoY in Q3 2025.
• Fee income diversification: Fees made up almost 20% of total income in Q2 2025.

Finance: draft 13-week cash view by Friday.

ING Groep N.V. (ING) - Porter's Five Forces: Competitive rivalry

Rivalry is intense in the European banking sector, which has a concentration ratio of 65.2%.

ING competes directly with over 24 significant banking rivals like ABN Amro and Bank of America. The competitive landscape includes major players such as BNP Paribas SA, BBVA, Deutsche Bank AG, and Cooperatieve Rabobank UA, all vying for market share across core European geographies [cite: 2 in search 2].

Competition focuses on digital features and price, impacting the Net Interest Margin (NIM). For instance, ING's commercial net interest margin stood at 2.22% in 3Q2025, a figure under constant pressure from pricing competition and the ongoing mix shift towards lower-margin residential mortgages [cite: 4 in search 1].

Fee income growth, up 14% year-on-year in Q3 2025, is a key battleground for revenue diversification. Retail fee income specifically rose by 14% year-on-year in Q3 2025, driven by investment products, while Wholesale Banking fee income saw an even stronger increase of 19% year-on-year in the same quarter [cite: 2, 4 in search 1]. ING has upgraded its full-year 2025 fee income growth outlook to be over 10% [cite: 1, 3 in search 1].

Slowing economic growth in core European markets intensifies the fight for lending volume. The Eurozone economy is forecast to grow by about 1.5% in 2025 [cite: 19 in search 1]. Despite this, ING reported net core lending growth of €14.2 billion in Q3 2025, representing a 7% annualized growth rate for the first nine months of 2025, showing a continued, albeit competitive, push for volume [cite: 1 in search 1].

Here's a snapshot of the competitive intensity metrics as of late 2025:

The battle for customer acquisition is clearly visible in the digital space, where ING added 197,000 new mobile primary customers in Q3 2025 alone [cite: 1 in search 1]. This focus on digital engagement is a direct response to rivals pushing similar features.

Key competitive dynamics include:

• Focus on mobile primary customer base: 37% of over 40 million customers are mobile primary [cite: 1 in search 1].
• Retail lending growth: €8.6 billion in Q3 2025, mainly mortgages [cite: 4 in search 1].
• Slowing wage growth in the EU: Forecasted to decelerate to 3.3% in 2026 from 4.0% in 2025 [cite: 16 in search 1].
• Competitive pressure on NII: Commercial NII declined year-on-year by €74 million in Q3 2025, despite volume increases [cite: 4 in search 1].

You see, the fight isn't just about who has the lowest rate; it's about who can generate non-interest income most effectively while managing margin compression.

ING Groep N.V. (ING) - Porter's Five Forces: Threat of substitutes

Fintech startups and non-bank lenders offer specialized, low-cost services, substituting traditional loans and payments. The Europe fintech market size stands at $85.52 billion in 2025, projected to reach $171.38 billion by 2030 at a 14.92% Compound Annual Growth Rate (CAGR). ING Groep N.V. reported net core lending growth of €22.2 billion in the first half of 2025.

Digital wallets and non-bank payment systems bypass ING's core transaction services. Since January 2025, all EU banks must offer instant euro transfers, with neo-banks embedding these rails into products delivering funds in under ten seconds. ING Groep N.V.'s fee and commission income in the third quarter of 2025 reached €1,165 million, a 15% rise compared with the same period last year, with fees making up almost 20% of total income in Q2 2025. Mobile applications captured 59.8% of the Europe fintech market size in 2024.

Decentralized Finance (DeFi) offers alternative investment and lending protocols outside the regulated banking system. The DeFi market size is valued at $51.22 billion in 2025. In the first half of 2025, $97 billion was issued through DeFi lending protocols, compared to $4.1 trillion in total global consumer loans issued by traditional banks in the same period.

Here's a quick math comparison on lending alternatives:

ING Groep N.V.'s digital leadership mitigates this, but the threat from technology-driven competitors is intensifying. ING Groep N.V. gained over 300,000 mobile primary customers in Q2 2025, bringing the total to 14.9 million. The bank's Return on Equity (ROE) for the first half of 2025 was 13.0%, with an expectation for more than 12.5% for the full year 2025.

• ING Groep N.V. Stage 1 portfolio (Investment Grade) was 91.7% of total gross carrying amounts (H1 2025).
• Total global traditional banking assets stand at $370 trillion.
• DeFi transactions reached $1.9 trillion per quarter in 2025.
• ING Groep N.V.'s CET1 ratio was 13.3% as of Q2 2025.

ING Groep N.V. (ING) - Porter's Five Forces: Threat of new entrants

You're looking at the barriers to entry for new players trying to crack the established banking market where ING Groep N.V. operates. Honestly, the hurdles are immense, especially for traditional banks.

Regulatory barriers are extremely high; ING Groep N.V. is a Global Systemically Important Bank (G-SIB) under European Central Bank (ECB) supervision. This status itself is a massive deterrent for any newcomer. The ECB's 2025 Supervisory Review and Evaluation Process (SREP) decision, effective January 1, 2026, will see the Pillar 2 additional own funds requirement (P2R) increase by 5 bps, moving from 165 bps to 170 bps. This results in ING Groep N.V.'s fully loaded CET1 requirement increasing by 3 bps. Furthermore, the overall leverage ratio requirement will rise from 3.5% to 3.6% as of January 1, 2026.

Capital requirements are a major hurdle. ING Groep N.V.'s own end-of-2025 CET1 target is managed at around 13%, with a specific range set between 12.8-13.0%. As of September 30, 2025, ING Groep N.V.'s CET1 ratio stood at 13.4%. For context on the regulatory burden, here are some key capital metrics:

New entrants, particularly digital banks, are gaining market share by focusing on niche, low-cost services. Still, ING Groep N.V. shows significant customer momentum as a counter-measure. Retail fee income rose 14% year-on-year in Q3 2025. ING Groep N.V. added nearly 200,000 primary mobile customers in Q3 2025, achieving 1.1 million growth over the last 12 months.

The sheer size of ING Groep N.V. creates a scale barrier for most challengers. ING Groep N.V.'s total assets for the quarter ending September 30, 2025, were $1,276.858B, or $1.281 Trillion USD. The need for massive initial capital, evidenced by the CET1 requirements, combined with the need to build a trusted brand at this scale, makes entry difficult for non-Fintech players.

Here are some key figures related to ING Groep N.V.'s scale:

• Total Assets (Q3 2025): $1.276858 Trillion USD
• Total Operating Expenses (9M 2025): Projected at the lower end of €12.5-€12.7 billion
• Mobile Primary Customers (Q2 2025): Reached 14.9 million
• Additional Distribution Announced (Oct 2025): Up to €1.6 billion