By Nicholas Larsen, International Banker
With more than 44 years in the market and 1.4 million plus customers to its name today, Produbanco is one of Latin America’s most highly acclaimed and instantly recognisable banking brands. The Ecuadorian lender has enjoyed decades of stellar growth and expansion; it was given a major boost when Grupo Promerica acquired a majority stake in the bank in 2014. And thanks largely to a comprehensive strategic realignment in recent years that has seen digitalisation and sustainable banking come to the fore as its key priorities, Produbanco remains ideally positioned to continue leading the regional market for years to come.
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To highlight just how successful its digital transformation has proven over the last few years, Produbanco has yielded some unequivocally phenomenal results from the strategy. Indeed, while its share of digital sales within the local market was recorded in January 2019 at 18 percent, this portion has greatly expanded to reach a hefty 70 percent of the market’s digital sales by the end of December 2022. Indeed, the bank enjoyed an especially fruitful 2022 in this regard, with products such as accounts, programmed savings and credits all enjoying digital sales well above 56 percent of the market.
The new Produbanco Digital Account, made available to customers in February 2022, for example, provides 100 percent digital functionality such that clients can open an account immediately through the Produbanco App, its mobile-banking app, without having to visit a bank branch physically.
But it’s not only Produbanco’s new products that reflect the high standards of digital-banking excellence it has attained over the last few years. A significant component of its strategy has been revamping popular existing products. It is this combination of the “new” and the “classic” that has propelled customer adoption of the bank’s digital offerings into the stratosphere. Produbanco’s savings accounts underline this philosophy perhaps more clearly than any other, whereby clients can enjoy the bank’s new digital savings account as well as a renovated experience of the existing and hugely popular “be Produbanco” savings account. This has resulted in 88 percent of savings accounts being acquired through digital channels.
Last year also saw Produbanco launch its new “phygital” agency model, which places clients squarely at the heart of a dynamic digital ecosystem with the guidance of branch executives and banking advisors to find the best solutions for their specific needs. For example, a client can use a simple QR (quick response) code to request a meeting with a branch executive, thus avoiding waiting in line. The bank has observed that customers are increasingly demanding such convenient solutions. It continues to generate innovative products and services to not only help its clients make the most of their time but also enjoy more flexibility by becoming more autonomous in managing their financial products via digital channels whilst still having the ability to seek guidance as and when needed. What’s more, they can enjoy the bank’s Wi-Fi service in the branch lounge prior to the meeting, thus having access to comfortable spaces that make them feel welcome.
Innovation lies at the core of Produbanco’s digital-transformation strategy, with the relentless pursuit of cutting-edge solutions enabling the bank to consistently deliver products and services that not only facilitate customers’ evolving needs but also strive to elevate their overall banking experiences. Indeed, the bank set up its ProduLab innovation laboratory for this very purpose, housing a number of highly qualified multidisciplinary teams that work to develop new ideas and client experiences.
This focus on innovation also extends to the bank’s internal workforce, with employees very much part of a dynamic, culturally evolving environment. Projects are implemented in unique ways and with typically heavy use of digital channels, such that the bank’s business culture consistently remains distinct from that of traditional lenders. The bank also favours the application of “agile” methodologies that seek to recruit the voice of the customer at various stages of the design process and employ a multitude of user experience (UX) research techniques to enable the bank’s research teams to ascertain various customer tastes and preferences and ultimately develop financial solutions appropriate to their needs.
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Mr. Ricardo Cuesta Delgado, Former Chief Executive Officer of Produbanco
Much of Produbanco’s success in recent years, especially in digitalisation, stems from the relentless pursuit of excellence that marked the tenure of its outgoing chief executive officer, Ricardo Cuesta Delgado, who was largely responsible for making the bank’s digital transformation a reality. Mr. Cuesta brought his experience serving in high-ranking positions at other financial institutions, national and international, to Produbanco and led the bank into a series of transitions that equipped it to meet the challenges of the digital era head-on. Sustainability was also close to his heart, leading to initiatives that put Produbanco ahead of other financial institutions in pursuing environmental protections.
Mr. Ruben Eguiguren, Chief Executive Officer of Produbanco
This year, Mr. Cuesta retired from his post, and Ruben Eguiguren assumed his position. The bank held an event on Thursday, February 9, during which Mr. Eguiguren was presented as the new head. The bank’s staff was pleased to welcome their new CEO, who for the previous 10 years had served as vice president of the bank’s corporate segment, hence the reason for the Board of Directors of Grupo Promerica appointing him to be Mr. Cuesta’s successor. The staff of Produbanco have wished Ricardo Cuesta Delgado every success in his future endeavours and extended their sincere gratitude for his many years of service at the helm of their bank.
Certainly, Ricardo Cuesta Delgado left an ineradicable mark on Produbanco that will benefit its customers for years to come, providing an excellent platform for Ruben Eguiguren to begin his career as the bank’s new chief executive.
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Digitalisation represents only half of the Produbanco success story in recent times. As laudable as its digital lending journey has been, its promotion of sustainability throughout the bank and beyond has been just as impressive, enabling it to blaze a trail for other Ecuadorian and Latin American lenders seeking to boost their own sustainability credentials. And that shining example is particularly set through its environmental work, which from the outset reflects Produbanco’s firm view of banking as a key multiplier for sustainable development and an agent of change in promoting the construction of a more responsible society in harmony with the planet.
Its decision to join 40 other global banks in creating the global Net-Zero Banking Alliance, which seeks to achieve zero CO2 (carbon dioxide) emissions in the financial industry, provides a timely example of this view being put into practice to effect meaningful planetary change. It means that Produbanco is moving rapidly to lower carbon emissions resulting from the activities found in its loan and investment portfolios, as well as facilitating its clients’ investments in renewable energy, energy efficiency and climate-smart agricultural investments. It also means that each signatory bank must set emissions-reduction targets for both 2030 and 2050, with Produbanco required to open itself to frequent reviews by the Intergovernmental Panel on Climate Change (IPCC), an entity that monitors compliance with the Paris Accords.
Conservation also plays a central role in Produbanco’s overall sustainability efforts—most notably through its work with Conservation International Ecuador (CI Ecuador), through which they jointly signed an agreement with the Ministry of Environment and Water (MAAE) and the Environmental and Sustainable Investment Fund (ESIF-FIAS) to support the crucial conservation of the country’s moorlands. Called “Conserving our water sources: the moorlands of Ecuador”, the agreement represents a joint commitment to promote the conservation and sustainable use of the Andean ecosystem, which is of pivotal importance in safeguarding the country’s water resources.
And the international recognition that Produbanco has received for its unwavering commitment to sustainability is there for all to observe. For instance, it was Ecuador’s first commercial bank to obtain an international certification for carbon neutrality according to ISO 14064-3 and verified by Société Générale de Surveillance (SGS). This globally recognised certification specialises in quantifying, evaluating and defining actions to improve and reduce organisations’ carbon footprints under the strict guidelines of the CarbonNeutral Protocol.
Produbanco also received EDGE Certification last year for three of its buildings, thus reflecting the exceptionally high standards of sustainable construction the bank has put in place since 2019 to ensure the creation of more efficient buildings. The certification includes three categories: EDGE Standard, EDGE Advanced and EDGE Zero Carbon. Produbanco obtained the EDGE Advanced certification for both its Produbanco Ekopark building—which generated significant savings of 42 percent in energy, 37 percent in water consumption and 90 percent less energy incorporated in materials—and its Produbanco Iñaquito building—which produced savings of 43 percent in energy, 40 percent in water and 47 percent less energy incorporated in materials. As for Produbanco’s Guayaquil branch, the EDGE Standard certification was awarded for achieving savings of 21 percent in energy, 54 percent in water and 42 percent less energy incorporated in materials.
But as far as sustainable-banking certification is concerned, the designation of Produbanco as a B Corp deserves arguably the most adulation, particularly given the recent explosion in ESG (environmental, social and governance) criteria shaping business models today across the world. Achieving this certification requires three pillars of change: (1) inclusive governance, formally including legal frameworks and stakeholder-accountability policies; (2) impact measurement, to know and evaluate the role of companies in their industries and within their communities according to international standards; and (3) transparency with their clients and society regarding the impact they generate, what they do, and how they do it.
With only 24 companies in Ecuador having been given this prestigious certification by B Lab, a New York-based non-profit organisation that seeks to promote new economic and business models that incorporate social and environmental well-being, the B Corp Certification reflects that Produbanco can be considered a “triple impact” company across financial, social and environmental components. As such, the bank joins a prestigious global community of organisations that operate under the highest social, environmental, governance and transparency standards.
“We are the first private equity bank in the country and in Latín America to obtain this certificate, and it is great news; it’s a milestone,” according to Ricardo Cuesta Delgado, chief executive officer of Produbanco at the time, adding that being a B Corp is a sign that Produbanco is committed to sustainability and the generation of triple impact. “The process took just over two years; we voluntarily submitted to the demands of those who audit B Corporations. In this effort, the processes were audited with our customers, with our suppliers and with our employees. This helps us to maintain standards both inward and outwardly. We preach and live sustainability.”
Of course, Produbanco’s lofty sustainable-banking ambitions can’t be achieved without the crucial process of building coalitions with other lenders and key multilateral institutions across the globe. This is perhaps no more clearly exemplified than by the alliances it has formed, such as the aforementioned Net-Zero Banking Alliance as well as the Principles for Responsible Banking, which formally ratify its strategic commitment and align its sustainable business approach with the United Nations’ (UN’s) Sustainable Development Goals (SDGs) and the Paris Climate Accords, of which it is a founding signatory. The Principles bring together a sizeable 130 banks from five continents, representing more than 47 trillion dollars in assets—around one-third of the global banking sector—alongside the UN’s Environment Programme Finance Initiative (UNEP FI).
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Ultimately, the progress achieved through its dual strategic pillars of digitalisation and sustainability has ideally set Produbanco up for a hugely successful upcoming few years. Banks are becoming increasingly aware of the need to engage in responsible lending for the planet’s sake, and most lenders have embarked on one form of digital transformation or another. But with a culture of restless innovation continuing to set it apart from its banking peers and a genuine, demonstrable desire to see sustainable banking become a key springboard for a better, greener world, Produbanco will remain a shining beacon for other lenders in this new era of banking.