ING and Capital One: Is a Culture Clash Inevitable?

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The Federal Reserve Board cleared the way last week for Capital One Financial Corp. to complete a $9 billion, cash and stock deal for ING Direct USA. It’s a coup for Capital One, which already purchased a few smaller banks. But ING Direct customers attracted by the bank’s generous interest rates and lack of nickel-and-diming are bracing for an upheaval.

As soon as news of Capital One’s plans to buy ING Direct broke last summer, customers took to the blogosphere and social networking sites to bemoan what many saw as an inevitable erosion of the bank’s simple, customer-first philosophy.

“Capital One is a very good marketer,” points out Marc DeCastro research director of consumer banking for IDC Financial Insights. But how will it spin ING Direct’s characteristic needling of other banks’ endless fees and clunky customer service when some of its own products have been criticized for these flaws?

(MORE: Capital One Buys ING Direct, and Customers Start to Freak Out)

Capital One uses the tagline “no hassle” for its credit card rewards, but if it takes away any of the inexpensive simplicity that makes ING customers so loyal, customer complaints even could drown out pitchman Alec Baldwin’s bombast.

A Q&A on the New York Times‘ Bucks blog might not do much to allay ING Direct customers’ fears. When the blog asked if the acquisition would mean more fees or higher minimum balance requirements, the bank replied with a paragraph-long nonanswer, including this glancing, not-at-all reassuring reference: “We will focus on the customers, channels, products, and pricing strategies that build the best long-term customer relationships and deliver the best cost of funds.

Watchdog blogs like Consumerist have slammed Capital One for cramming fine print into these “no hassle” cards that reveals a litany of punitive fees, penalty rates and other, well, hassles.

On the flip side, existing Capital One customers could benefit if the company incorporates some of ING’s more high-tech features for its credit card and brick-and-mortar banking divisions, DeCastro says. “If they start rolling out things like remote deposit capture,” he says, “they can be more competitive.”

(MORE: What Would Steve Jobs Do?)

Stessa Cohen, research director in the banking and investment services group at Gartner Inc., suggests Capital One might do best to keep ING Direct as a separate brand. “ING has a brand differentiating themselves from regular mainstream banks,” she says. The appeal of brick-and-mortar branches might be lost on a customer base that sees more value in high interest rates and a customer agreement that isn’t crammed with “gotcha” fees.