Banco del Pacifico, founded in 1972, has made a significant contribution to the Ecuadorian financial sector since its beginnings. It has successfully weathered periods of economic turmoil, such as the devastating financial crisis of 1999, due to its dedication to its strategy of promoting “the growth of all segments of the economy, with products and services that meet the needs of customers” and finding “more efficient processes, at lower costs, and of direct impact”. Banco del Pacifico has taken pride in modernizing the Ecuadorian financial system by breaking through the tried-and-true concepts and practices of traditional banking and by innovatively employing the latest technologies. In the process, the bank has become a benchmark for its country and region. For example, in 1975, Banco del Pacifico installed Ecuadorian banking’s first computer system, with a network of five terminals. Then in 1979, the bank did it again, unveiling the first ATM, Bancomático, in all of South America. The bank’s quality policy says it best: “At Banco del Pacifico, we are committed to the development of the country with social responsibility, through digital innovation and a business model that generates timely and competitive supply of financial products and services of excellent quality.”
International Banker was recently joined by Banco del Pacifico’s CEO Efrain Vieira Herrera to discuss the bank’s successes, strategies and continuing innovation drive.
Mr. Vieira, thank you for talking with us today….
How would you characterise the current state of Ecuador’s banking sector? And in which particular banking businesses do you consider Banco del Pacifico to be a market leader?
The financial system expects major dynamism in the Ecuadorian economy, which will benefit banks’ development. The central government is seeking an agreement with the IMF (International Monetary Fund) to receive more resources; this scenario will favor the government’s cash flow and consequently the increasing tendency of the annual growth rates of deposits and credits that has been observed in the last few years.
On the other hand, the national financial system is strengthening its strategies to begin paving the way towards a digital transformation and adapt its processes to new consumer tendencies. Also, to cater to new ways to take care of customers who are changing the ways they like to be assisted. In 2007, Banco del Pacifico began its digital-transformation process and established the guidelines in the Strategic Plan 2018-2022.
Due to our digital transformation, we have incorporated agile methodologies and have specialized teams dedicated to the development and implementation of projects applying these methodologies. We have an Innovation and Digital Transformation area to explore new technologies and business opportunities, along with a digital-development factory dedicated to digital processes to improve our customer experience.
Ever since the establishment of our institution, we have pioneered in technological innovation and currently lead in customer service providing electronic and digital channels with solutions that allow customers to experience an unforgettable experience. We also offer a one-of-a-kind opportunity in the housing sector with our products “Mi Primera Casa Pacífico” (My First Pacifico House) and “Tu Casa Pacífico” (Your Pacifico House), which allow Ecuadorians to acquire their first home with favorable rates and periods. In the student sector, we are leaders with our student loan product called “Crédito Estudios Pacífico”, offering the best conditions in the market; in 2018, we financed 10,394 students for a total of US$41.3 million.
Do you consider 2018 to have been a successful year for the bank, and if so, why? What do you consider to be the bank’s greatest achievement during the year?
Undeniably this year has been successful. We have been able to sustain a high-level corporate culture with our collaborators involved in the bank’s development, which allowed us to attain second place in the “Great Place to Work 2018”contest, in the Financial Institutions chapter. We want to emerge; we are convinced that the bank’s success depends on its collaborators.
Besides our inversion in the transformation with a focus on the customer, we have invested in agile methodologies training for our human resources. Nevertheless, these inversions in 2018 allowed us to achieve a record figure in profit (US$100.3 million), which represents an increment of 43 percent compared with the previous year. These results are the product of efficient management of assets and liabilities and control of operational costs. Not less important is the fact of having channeled more than US$1,500 million in credit to different economic sectors.
Parallel to this issue, we have made available to the market different products and services that make life easier for our customers and users; among the main ones are Online Agile Credit for Consumption, Credit for Entrepreneurs, Credit for Studies, OnBoard BdP (opening of savings accounts and term investments) and BdP Wallet (Digital wallet for payments in establishments).
It was reported last year that for the five-year period between 2013 and 2018, Banco del Pacifico managed to increase its base of depositors, as well as the balance of total deposits, by 45 percent. To what main factors do you attribute this growth?
The significant results obtained in commercial management and financial figures were due to the ongoing innovation of our processes, which are centered in our customers’ needs, while offering them the best experience through quality and attention to detail.
We have invested in new tech that adds value to each one of our products and services. As a result of all of these efforts, we launched new digital products and services such as Savings Account Opening and Digital Investments, with great market acceptance. When talking about our Savings Account Opening, since its launch in May 2018, we have opened more than 26,000 accounts. On the other hand, we made available to our clients new functionalities in electronic and digital channels that have strengthened their self-management capacities.
As I understand, you were the first bank locally to launch the Cash Management tool for customers. Can you briefly explain what this tool is, and what benefits it has generated for your customers?
Indeed, we were the pioneers in providing our customers with a Cash Managementtool. We began in 1984 catering to individuals and businesses, even when there was no internet (using modems and diskettes); this tool has evolved with time and the help of technology. Currently, we offer an online system using the internet. With the mindset that people’s time is most valuable, with this tool they can manage payments and charges from their workplaces, get to know their cash flows online and their collection status, which will allow them to take financial action quickly.
The bank’s Entrepreneurial Loan sounds like a uniquely interesting product. What are some of the main features of this loan, and would you say it has proved popular among your customers?
Indeed, our Entrepreneurial Loan is very interesting; it allows the entrepreneur in the SME (small and medium-sized enterprise) and micro-enterprise sectors to access loans that will enable them to invest in fixed assets or working capital to improve their entrepreneurship. For micro companies, we finance from US$2,500 to US$30,000; and for SME (Small and Medium Businesses), from US$2,500 to US$300,000, with terms from six months to seven years, with the best market rates and with the coverage of the National Guarantee Fund of the CFN (Corporación Financiera Nacional); this coverage is 80 percent, and the remaining 20 percent is at clean risk. This loan was made available in October 2017; and until December 2018, US$53.4 million had been loaned/granted.
What is the most innovative digital banking product or service that Banco del Pacifico currently offers? And what differentiates this offering from others on the local market?
Banco del Pacifico developed the app Onboard BdP; it offers any person the possibility to contract a savings account or make a term investment from a mobile device in three intuitive and straightforward steps. This process is entirely digital E2E (end to end). Unlike other institutions, in which the user has to wait for the approval of the account opening, the BdP Savings Account can be used immediately and does not require an initial deposit, which makes it very competitive. Anyone with a smartphone can acquire these services using the Onboard BdP mobile app.
You are considered to be the only omnichannel pioneer in Ecuador. Can you briefly explain what this means?
It means to offer a satisfactory and coherent digital experience in different channels and devices regardless of the location; this is a key factor in omnichannel strategies, not an easy process to achieve. In 2017, the bank implemented the first digital-banking platform, becoming a pioneer in Ecuador. This platform supports the management and administration of services that are used by different channels, which has allowed us greater agility and efficiency when implementing new services in our channels. For example, to develop Onboard BdP, we reused many functions of the omnichannel platform, which allowed us to put the app into production in four months, something that usually takes eight to twelve months.
As I understand, customers can open savings accounts at Banco del Pacifico from the convenience of their mobile phones. Can you briefly explain the process involved with this feature?
Effectively with Onboard BdP, you can open a savings account from the comfort of your home or any other place, but you need a mobile device. Opening the account is easy and intuitive; it is done in three steps:
- Digitalize ID card.
- The customer takes a picture and provides current location, address and geolocation data.
- The customer adds profession and work information, and the process ends with an electronic agreement of the contract.
The bank is among the most innovative and forward-thinking in the region. For example, you were among the first banks in Ecuador to install a computer system for banking, and you also introduced Bancomatático, the first ATM in South America. Do you still consider the bank to be ahead of the competition in terms of innovation? And do you have any recent examples that support this view?
We keep innovating. We are the only financial institution in Ecuador that exchanges and pays checks using “intelligent” ATMs (automated teller machines). With this service, we decongest our teller stations and encourage customers and financial users to self-manage, by letting them make deposits, withdrawals, service payments and check changes at the Bancomático XPlus (smart automatic teller machines).
We were the first bank to establish, in 2017, an Innovation Center and a Digital Development Factory, which facilitates the digitalization of critical processes, making available to our clients digital products and services.
One of the bank’s most ambitious corporate social responsibility initiatives is the financial-education program that began under its strategic plan in 2010, in which you provide basic tools to children between 11 and 13 years of age. How satisfied are you with the success of this program to date? And do you have any notable results or achievements from the program that you’d like to highlight?
As a bank, we feel committed to society; financial education contributes to an economically prosperous future for our community. The educational program “Aprendo con mi Banco Banco” (I learn with my bank) program is aimed at school-age children, as well as children who participate in programs developed or sponsored by foundations and non-profit organizations. Since 2014, we have decided to expand this program nationally and also to teach it to the young people in their last schooling years.
Since 2010, the bank has trained more than 29,400 students from 352 educational centers in the main cities of the country. The program seeks to promote financial education in children and to fortify their values by generating consciousness at a young age about the importance of saving money and the good management of natural resources. The program uses games with a dynamic and pedagogic methodology; the workshops are taught by collaborators of our institution and an actress who represents a charismatic and lovable character to the children.
We recently launched a YouTube program, “Mi Banco Banco TV” (My bank on TV), on which children explain to other children financial themes and short stories are developed to strengthen further financial knowledge.
Also, we have another program, “Mi Banco Banco me enseña” (My bank teaches me), which is aimed towards clients and users with the same objective of strengthening the financial education of our citizens. This program is executed through workshops and radio programs, among others. Our managers, assistant managers and collaborators participate in the development of the program to sow skills in personal finance that allow people to make sound financial decisions.
We also have a website www.educacionfinanciera.com.ec, where users can make financial consultations, listen to our radio program and use our credit and savings simulators.
The bank is also involved in providing support for social-housing programmes in Ecuador. Are you satisfied with the progress being made with such programmes?
We are pleased with the support we offer to Ecuadorians who aspire to have their first houses. Since October 2017, we have offered housing loans of public interest; since March of this year, we have improved our offer by offering it under two modalities: With “Mi Primera Casa Pacífico” (My First Home Pacifico), we financed amounts from US$14 thousand to US$27 thousand, and Tu Casa Pacífico (Your Pacifico House) from US$27 thousand to US$70 thousand; to date, we offer an improved 4.5-percent market rate. Until December 2018, we had delivered 1,812 credits for US$102 million.
Given the digital transformation that the banking industry is currently undergoing, as well as the ongoing digitisation within Banco del Pacifico, how are the bank’s recruitment and hiring decisions changing? Do you find that more technology-related talents are being required?
This era of digitalization is changing the current functions of the financial sector for others, where not only technical knowledge is essential but also user experience (UX) designers, data scientists, information architects, among others. Transformation and innovation demand a higher number of developers to implement prototypes of digital products and services.
Our selection and hiring process for these new roles demand that our Human Development area acquire knowledge of the technical requirements and the profiles that are required to be adjusted to the unique needs of the industry. The search of the candidates with these characteristics is performed through digital channels and other niches such as agile communities, hackathon events, social networks, triggering the search for selection not only locally but also throughout the national territory, as well as searching inside the organization.
The timely hiring of these new talents has implied the review of the whole process of attracting, selecting and hiring talent to improve the timing of incorporation of personnel, reviews of salary bands adjusted to new skills, the flexibility of work schedules and training to complement their profiles.
What do you consider to be Banco del Pacifico’s biggest challenge in 2019? And how do you intend to overcome it?
New consumer habits, more demanding customers and new technological tendencies motivate us to strengthen further our organization’s health to keep innovating and to transform us digitally with the objective to achieve service excellence by putting our customers always at the core.
We have a strategic plan in which the guidelines are fully established to achieve strategic objectives:
- An agile way of working will be implemented, which will accelerate the launch of innovative products and services.
- The most critical journeys will be transformed for the customers, to offer them digitally from end to end.
- Clients will have at their disposal a high range of services and transactions, thus reducing physical interactions.
- The bank and customers will interact digitally in a practical way, in all their needs, which will allow increasing digital sales.
- Organizational health will continue to be strengthened in five priority areas: Management, Culture and Work Climate, Accountability, External Orientation and Innovation.
It sounds as if Banco del Pacifico has worked out a strategy that is guaranteed to bring success. Thank you very much for your time today, Mr. Vieira.