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Zen and the art of banking

by David Scott

Although today he’s now founded his sixth banking startup, as a student at Western in the late 1960s, Arkadi Kuhlmann, HBA’71, MBA’72, LLD’10, didn't have enough money to buy a car.

Unlike other male students who leased Corvettes to impress girls, Kuhlmann could only afford a motorcycle in his freshman year. It was his sole means of transportation around London and back to visit his family in Toronto on weekends.

“I think I did 432 trips back and forth between London and Toronto – almost every one of them on a motorcycle. It's a real experience riding a motorcycle from Toronto to London in January in a snowstorm on the 401.”

Today, Kuhlmann doesn’t need to impress anyone. As Founder and CEO of ZenBanx, a mobile multi-currency exchange platform, he is continuing to redefine the banking industry.

Kuhlmann’s Easy Rider days on Western's campus coincided with the social upheaval of the late 1960s and early 1970s. Universities were places of discussion, debate and learning who you were – Western was no exception.

“These are the moments whether it was Neil Armstrong’s first step on the moon or Paul Henderson scoring in the last seconds of the 1972 Summit Series, it was the generation of the hippies,” he said on the phone from his ZenBanx office in Redwood, Calif.

The German-born, Toronto-raised Kuhlmann felt at home in the classroom, particularly in the business school where he relished discussions focused on the “constant struggle” between what could and what could not be solved quantitatively. “I found this interplay exceedingly challenging and interesting,” he said.

He earned his MBA at Western in 1972. He then stayed on to teach from 1973-76.

If you search hard enough in the right places, you can find photos of the young Western business faculty member with students “sitting in class smoking and reading newspapers. I've got those photos of me teaching in a tweed jacket with leather elbows and a beard.”

Kuhlmann, who later taught at McGill University and the Thunderbird School of Global Management at Arizona State University, considers himself “primarily a teacher – but without becoming an academic.”

So, how did a motorcycle-riding young professor grow into a rebel banker always a decade ahead of the industry? In hindsight, his career path in traditional banking revealed ingredients to that success. From the Canadian Bankers Association in Montreal to the Royal Bank, Kuhlmann was a sponge for retail financial services. He witnessed the first wave of electronics that led to automation in back office of banks, including the ‘revolutionary’ concept of telephone banking.

Kuhlmann even went through a ‘global phase’ by joining the foreign exchange giant Deak International. He worked in Asia, Europe and Australia and gained keen insights on banking trends of the 1980s and early 1990s before returning to Canada to work with North American Trust in retail.

And then, as the public gained access to the Internet in the 1990s, ING Direct was born.

“In the early 1990s, I'd just got back from Japan. We were still talking about telephone banking then. Clearly, the timing was perfect. We started the telephone bank (at ING) and, literally, graduated more and more over to the Internet in the late 1990s.” ING Direct Canada was founded by Kuhlmann in 1996, launched in 1997 and evolved into ING Direct US early in the new millennium. He created the brand strategy, recruited the senior leadership team, and grew the bank from 1996 to 2000 serving as the bank’s president and CEO.

He then repeated this process in 2000, when he founded ING Direct USA and led its growth to become the largest savings bank and number one direct bank in the United States, with more than $90B in deposits and 7.8 million customers. The comfort level grew with Internet banking and telephone banking virtually faded to the next fad.

“That transition just kept on growing, until finally we sold it in 2012. Then it was clearly 90 per cent plus the Internet.” That same year, Kuhlmann had another vision of a ‘seismic’ banking industry change. “Looking forward, I'm seeing the same thing happening again today. Now, I'm going from websites to mobile banking. I thought for sure the next 10 years are going to be all about mobile banking; of course, I was right.”

In July 2012, Arkadi founded his sixth banking startup, ZenBanx, and is currently serving as its CEO.

By 2020, Kuhlmann assures the world will look back and see that the last decade has been all about the mobile. He is quick to point out that, although it might appear he is just following the trend from paper to telephone to the laptop to the mobile in this technology chase, it's actually more about consumer behaviour.

It's really the way consumers interact with, and actually think about, how they do banking. What do they think about money? What is the purpose of money? How intimate are they with their money, their buying behaviour?”

This type of philosophical approach to banking endears Kuhlmann to his staff, who have been asked to re-elect their boss annually as CEO. His second book, Rock Then Roll: The Secrets of Culture Driven Leadership, offers insight into how culture drives modern corporations. In an interview with Forbes, Kuhlmann said the book was a blueprint for his ING Direct associates on how the “protest generation” should think about corporate culture. For instance, at ING Direct, the CEO made a point of visiting call centres and eld customer calls himself. He immersed himself in the culture he created and didn't feel comfortable asking any of his employees to do something he wouldn't do himself.

“You have to put a big effort in getting close to customers – whether it's on the phone or on the mobile or in the shop. I cannot tell you how many board discussions are among directors who are always talking about customer first and customers want this, and they've never actually talked to a customer.”

Kuhlmann admits it's difficult in leadership positions to achieve this balance and remain genuine to the staff you lead. “You can't live a very luxurious life and eat at five-star restaurants and then come in and actually convince anyone you're humble and eat peanut butter sandwiches with them at lunch. They then think you're slumming. You need to walk the talk.”


He lives a balanced life – not only for his health and outlet for personal passions – but also to paint a picture of himself beyond a one-dimensional corporate figurehead. “People want to know who you are,”

he continued. “They want to relate to the individual. They don't want to relate to a résumé.”

Personally, Kuhlmann has his best insights about business while sailing, playing tennis, writing, painting, riding a motorcycle or cycling. “Getting involved in music or the arts or other pursuits – whatever that is – is really helpful in terms of rounding you out and keeping you connected not only to who you are but also to the world.”

This ‘Renaissance man’ persona is part of Kuhlmann’s daily approach to life that has roots back to his time in the classroom at Western. There, he learned about keeping an open mind and the importance of open discussion and debate.

“There's a tolerance about having different views, which comes through the diversity of the classroom. But also that the responsibility of a student and of a faculty member is to debate and argue and search for the truth. I learned that and I welcomed that with open arms. It was like pouring water on me. And I flourished in that environment.”

That tradition carries on today in his workplace. Objective conversations, debates and soul searching on a myriad of topics is commonplace in a Kuhlmann-led work environment.

“So the arc between, in a very practical sense, between subjective and objective is something that I learned so well at Western that it serves me today.”

I’ve been blessed – my whole career, my life – by mentors. People who have taken a chance on me and given me something. And I was lucky enough that I found that at Western. And there are a number of professors I still have connections to today. That's one of those unsung huge benefits out of the university education that people should not underestimate."

This article appeared in the Winter 2016 edition of Alumni Gazette
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