By Nicholas Larsen, International Banker
In light of the significant advancements that have been made recently in banking technology, it has become increasingly apparent that customers now place a sizeable premium on choosing solutions that ultimately help to make their lives easier. With that in mind, financial institutions all around the world now realise that they must effectively anticipate their customers’ needs if they are to not only maintain healthy banking relationships but also ensure customers are receiving the best possible banking experiences. It is largely thanks to having such objectives that the digital transformation being undertaken by Banco del Pacífico is proving so successful.
Of course, it should come as no surprise that such a transformation is enabling the Ecuadorian banking stalwart to scale new heights. When it comes to delivering cutting-edge solutions to the market, Banco del Pacífico has a long, illustrious history of being ahead of the curve, not just within the local market but throughout the wider Latin American region. Back in 1975, it was the first Ecuadorian bank to install a computer system with a network of five terminals, before being the first in all of South America to launch an automated teller machine (ATM) four years later. With innovation in its blood, therefore, the bank today continues to embrace the latest technological solutions in pursuit of delivering ever-higher levels of customer satisfaction.
Motivated by a changing world that is enabling tech-based tools to significantly boost the customer experience, as well as by the changing behavioural dynamics of the banking industry, Banco del Pacífico decided to embark on its digital transformation in 2017, before formally implementing it a year later as a key component of its Strategic Plan 2018-2022 (mainly through its creation of a new Innovation and Digital Transformation division). In so doing, it is the first bank to undertake such a project in Ecuador, thus giving it an at least two-year head start vis-à-vis the local banking competition. It also decided to commit to this overhaul at a time when the bank was enjoying its best-ever financial performance, indicative of an institution that refuses to rest on its laurels, one that strives to keep pushing forward to deliver the very best for its customers.
BdP Touch, Quito, Ecuador..
The transformation has already been distinctly characterised by not only groundbreaking digital innovation but a firm commitment towards ensuring that all customers are getting what they want from their banking experiences. In practical terms, this mainly means implementing an agile methodology that ensures teams of staff are able to focus on specific products and services as well as add functionalities at a breathless pace—faster than anyone in the local market or even in the entire LatAm (Latin American) region.
A range of cutting-edge technologies has already been utilised as part of the transformation. Data analytics, for instance, is being implemented to ensure that the bank knows with greater certainty what the next product purchase should be for each client based on his/her behaviours and preferences. Such analysis is leading to a significantly improved conversion rate from what customers are being offered by the bank to what they are accepting. On the AI (artificial intelligence) front, meanwhile, the bank’s virtual agent, Sophi, is helping serve customers through text via such popular channels as WhatsApp, Facebook, Twitter and the web as well as through Amazon’s Alexa and Google Assistant.
But while technology has undoubtedly been an important factor in this digital transformation thus far, a range of other factors that have been crucial in making the process a success—including ongoing research with users, reviewing processes, modelling experiences and prioritising business goals—should also be mentioned. With the customer principally in mind, the transformation certainly involves much communication with and feedback from customers when it comes to designing new digital offerings. Taking the first of those as an example, much research is conducted with users before a solution is given the go-ahead. The first phase of this process involves setting up the project and selecting the best team to validate the data. The minimal viable product (MVP) is then adjusted as appropriate before the solution is coded. Once the MVP is developed, a pilot is launched in order to gauge feedback from users. Adjustments are made based on this feedback, and then the final product is scaled and delivered to the bank’s entire customer base.
Putting the customer experience above all else can also be observed in the collaborative way in which Banco del Pacífico has approached this transformation. In recognition of the need to absorb ideas from far and wide in order to deliver the best, most innovative solutions to customers, the bank has already collaborated with two fintech companies. Despite those companies having distinctly different focuses and business models, cooperation was achieved, with the partnerships ultimately enabling the bank to maximally satisfy customers’ needs and wants.
But the principal way in which Banco del Pacífico has been able to so successfully anticipate customers’ needs has been through its consistently expanding range of stellar digital products and services. Perhaps this has been best exemplified by its new app, Mi Ahorro Cuenta, which enables customers to save money based on their own individual lifestyles. While traditional banks’ savings apps typically function based on some form of monthly savings rule, Mi Ahorro Cuenta includes seven additional rules that can be implemented in accordance with individual customers’ behaviours and preferences. For example, if a customer enjoys going to a coffee shop, she can set up a rule specifically based on that behaviour, thus allowing her to save money each time she visits. Or if a customer supports a particular football team, he can create a rule for whenever that team scores a goal, with the help of the app’s connection to ESPN´s API (application programming interface) to receive football results. And fitness enthusiasts can even set up a rule that allows them to save a specified amount whenever they complete a five- or ten-kilometre run.
Several other app solutions have also been launched to serve specific client segments, with the bank aiming to equip all customers with the functionality to access all of its services independently. The Onboard BdP app, for instance, allows customers to obtain a savings account or make a term deposit in less than five minutes. The app was also upgraded recently to include the option for customers to receive a credit card—again, in less than five minutes—as well as providing the opportunity to obtain a car loan. Students will also soon be able to procure a student loan from within the app. And on the financial-inclusion front, a separate app has been developed to issue micro loans.
Banco del Pacífico’s Innovation Lab, Guayaquil, Ecuador.
And how well have Banco del Pacífico’s new offerings been received by its customers? It would seem that the results speak for themselves. Onboard BdP has had 220,000 sign-ups for savings accounts in less than two years, while the car-loan functionality has led to more loans being issued in two months than in all of the previous years. According to the bank itself, the app has been crucial in attracting new business, with almost 10 percent of its total clients having come onboard within these two years. The micro-loans app, meanwhile, has seen more than $12 million across 16,000 operations being issued in less than a year. And the bank also identifies its BdP Wallet—Ecuador’s first digital wallet—as proving particularly popular, allowing customers to pay through a variety of popular channels, including contactless, NFC (near-field communication) or using a code.
This year, Banco del Pacífico has continued to implement bold enhancements to its suite of digital products and services. Perhaps most exciting of all has been the recent addition of keyboard functionality to its main banking app, BdP. Called Teclado BdP, the feature is an entirely new concept in Ecuador, while only five other banks in the LatAm region as a whole have adopted it. Already an award-winning feature in 2020, Teclado BdP benefits customers by putting “the bank in your keyboard”, meaning that because people use their smartphone keyboards very frequently, they now have access to keyboard shortcuts for what they use the most, including checking their balances, recharging their phone balances, transferring money both within the bank and outside, and withdrawing cash from ATMs without needing a card.
Of course, a transformation as ambitious as this one does not succeed without meeting and overcoming significant hurdles. One of the most challenging aspects has been the culture clash in the methodologies applied to the new software developments, which have differed markedly from the ones that were previously operational within the bank. Questions over whether to use open-source tools, for instance, have reportedly been met with a range of responses. Nonetheless, such challenges continue to be addressed effectively, often through garnering the support for a particular solution from the bank’s president or chief executive officer and/or by being able to deliver the product in less time, with the same quality or better and with the use of a strong, productive team.
From a human-resources perspective, meanwhile, the introduction of a flurry of new internal and external training programmes recently has meant that employees can confidently remain abreast of the bank’s rapidly evolving digital landscape. The bank has an internal goal of ensuring that more than 50 percent of its employees are trained in the new methodologies being adopted, such as Scrum, the agile process that aims to organise work into manageable deliverables within a specific time period, and Kanban, which uses a visualisation board for managing software-development work. The bank has also created a platform designed for people to contribute their own ideas for certain aspects of the transformation. These ideas are then evaluated by a committee before moving on to the research and validation phase. Externally, the bank has created open communities such as “the agile community” to connect people from both inside and outside of the bank, particularly for the purpose of sharing experiences and ideas.
Looking to the future, moreover, it doesn’t appear as though Banco Del Pacífico will be slowing down its pace of development. Indeed, it plans to keep rolling out digital advancements that will ultimately continue to break new ground as far as the customer experience is concerned. With customers’ needs and behaviours set to continue changing indefinitely, especially in light of the constantly developing and evolving environment in which the industry now finds itself, the completion of the digital transformation, too, will remain indefinite. As long as there are customer journeys to fulfil, the process will not end.
Ultimately, with the digital transformation being a key strategic purpose for Banco del Pacífico, it has allocated the necessary resources, capabilities and efforts to fulfil its objective of providing a superior experience to its customers. With much-valued backing from its president, along with a high-class team at its disposal, the bank’s desire to fundamentally transform not only its own approach to banking—but also how banks can seriously boost the customer experience both in Ecuador and well beyond—reflects a financial institution that is restlessly committed to changing the face of banking in the region. And with new functionalities being launched approximately every two to three weeks—a rate that leaves its competitors firmly in the rear-view mirror—there is little evidence to suggest that it will be taking its foot off the gas any time soon.