Home Banking Interview with Mr. Luís Ribeiro, Chief Commercial Officer, novobanco

Interview with Mr. Luís Ribeiro, Chief Commercial Officer, novobanco

by internationalbanker


Portugal’s fourth-largest bank, novobanco serves approximately 1.5 million commercial and retail customers through nearly 300 branches and 20 business centers throughout the country and managing billions in assets, novobanco boasts a nearly 10-percent share of the national banking market. Putting its customers first, novobanco combines modern, well-equipped physical branches with the latest digital innovations to ensure it supports its customers in realizing their dreams and desires—under the guidance of the bank’s professional, well-trained employees for more complex issues as they arise.

Born in 2014 from the resolution of one of the country’s largest banks and after a restructuring period, novobanco emerged in the early 2020s as a strong, independent, trustworthy contender in the Portuguese banking market, recognized as an innovator with a successful omnichannel customer relationship model, including branch, online and mobile access. The bank seeks to operate sustainably, having undergone a rigorous program to reduce its legacy. novobanco is confident of its ability to contribute significantly to the country’s economic growth through its valuable service to customers. The bank not only responds to but anticipates its customers’ needs by offering high-quality, innovative and ethical banking products and services shaped by satisfaction-assessment mechanisms.

International Banker was pleased to learn from Mr. Luís Ribeiro, chief commercial officer of novobanco, about the bank’s recent growth in size, popularity and profitability.

Mr. Luís Ribeiro, Chief Commercial Officer, novobanco

Mr. Ribeiro, thank you for your time today….

The published presentation covering the bank’s performance during the first half of 2023 mentioned that client acquisition grew by more than 25 percent year-over-year on the retail-banking side. To what do you attribute such an impressive growth rate? And do you anticipate maintaining similar growth rates in the future?

Novobanco has always been known for its capacity to build strong client relations, with commercial employees being the main factor in customer loyalty. Customer satisfaction has been at the forefront of everything we do.

Today we can proudly say that we are a solid domestic, client-centric bank. Our strong balance sheet, sound liquidity and strategic investments in our retail network, omnichannel relationship model and digital customer journeys have led to our increasing market share and strong client-acquisition rates.

The strength of customer relationships seems to be a priority for the bank across its retail- and corporate-banking businesses. What is novobanco’s most significant attribute or advantage that positions it as a leader in the local market in customer relationship management (CRM)? And how does the bank accurately gauge customer satisfaction?

At novobanco, we prioritize customer relationships, with our frontline staff as the cornerstone of our omnichannel banking strategy. Our commitment to customer satisfaction is unwavering, and we diligently track customer experiences across various channels, journeys and segments. By employing a comprehensive monitoring model in our customer-experience division, we engage in several strategies: conducting frequent surveys and establishing feedback channels to measure key performance indicators (KPIs) in both relationships and transactions; leveraging data analytics to understand customer preferences and trends; swiftly addressing customer concerns to nurture lasting relationships; and pinpointing the underlying causes of any dissatisfaction. This enables us to collaborate effectively with our business teams to facilitate meaningful improvements.

We conduct approximately 1,300 monthly surveys of customers visiting our branches, revealing an impressive 88-percent rate of customers who are very satisfied with our service. Moreover, among other key satisfaction metrics, feedback from account-opening surveys indicates a 90-percent “very satisfied” rate. And in personal loans, more than 98 percent of customers expressed high satisfaction with the services they received.

I can even provide some of the most common customer quotes that we usually gather around the “availability and professionalism of the frontline staff” that “build true relationships throughout the years” or mention the perceived progress of our services. For example, “Continue like this. I have been a customer for 45 years, and I see that there is innovation, and I hope that it will always improve.”

One of novobanco’s new branches in Lisbon, Portugal

The bank recently launched a new distribution model to improve customer experiences across the bank’s geographical presence, digital services and face-to-face interactions, among others. Can you provide more insight into such features?

Our revamped distribution model transcends mere physical updates to our branches. It reflects a holistic transformation strategy encompassing our branch network and digital presence. In our branches, we introduced a groundbreaking concept in the market, integrating technology with customer intimacy and community engagement. Digital innovation, meanwhile, has been pivotal in propelling novobanco’s swift and comprehensive evolution.

Currently, more than 257 branches (out of the 292 in total) operate under the new distribution model, which is built on three main concepts:

Proximity: We want our branches to be accessible and close to every neighborhood in Portugal, where it’s easy to have a conversation side by side without a desk in the way.

“Portugality”: We use traditional Portuguese materials to decorate our branches, such as oak wood, cork lamps and typical Portuguese tiles. These are Portuguese materials linked to Portuguese culture, but it is a contemporary culture and therefore not applied in the traditional way. Each branch also features regional accents, further linking it to its local community, such as typical regional shapes and tailored imagery.

Convenience: We ensure that each interaction with the bank is as brief or extensive as necessary. Deposits should be swift, avoiding unnecessary queues. Conversely, for discussions about significant life events, such as retirement planning or home purchasing, ample time is required for detailed, face-to-face conversations with specialists.

The network’s revamp also focuses on incorporating ESG (environmental, social and governance) principles, such as:

  • Minimizing paper usage by adopting tablet-based form completion, using electronic signatures and reducing the number of printers;
  • Powering all branches with green energy and cutting down on paper-based advertising to lower water usage and reduce tree cutting;
  • Choosing local and national materials and contractors for our operations.

The bank has launched two distinct branch types: the full-service branch and the master branch. What are the key differences between them? And what was the reasoning behind creating such a division between the branch types?

All branches are structured to foster innovative interactions between staff and customers. This includes comfortable seating in waiting areas, offering coffee and water, and providing informal meeting rooms. At a novobanco branch, clients can choose to sit either in front of or beside our staff. Additionally, every branch is equipped with video-conferencing facilities, enabling specialists to meet and advise customers regardless of their geographic locations.

They feature a unique service choreography encompassing welcoming and guiding customers upon arrival, selecting service areas based on the privacy and nature of the interactions, and dynamic movements of employees who are not confined to fixed desks.

Employees’ comfort has also been a top priority, and back-office spaces have been designed to allow staff to fully concentrate on their work or contact customers remotely without acoustic nuisances.

We know customers want the convenience of self-service, so we now have more than 231 VTMs (virtual teller machines)—41 more than in December 2022—that offer advanced transaction-management solutions; the VTM stands out as a tool for branch efficiency and customer satisfaction.

All our branches showcase identical innovations and banking services. They distinguished from each other by their location, with master branches situated in district capitals, typically on main avenues and prominent city areas; and size since masters are larger than full-service branches. The primary difference lies in their community engagement. Master branches feature areas dedicated to community involvement, including an auditorium and a space for digital experimentation.

Our goal is for our branches to serve as dynamic local catalysts, fostering social interactions through events and exhibitions showcasing local artists, entrepreneurs and others.

The bank also seems to have invested considerable sums into a new omnichannel model for customers. What are some of the main attributes of this new model from a customer-experience perspective? And are you observing greater levels of customer satisfaction with this new model vis-à-vis the bank’s previous model?

Novobanco has been implementing an omnichannel strategy to seamlessly integrate various banking channels and touchpoints and provide customers with a cohesive and personalized banking experience, setting us apart from our competitors. We have developed seamless cross-channel integrations, ensuring that customers can transition effortlessly between physical branches, online banking, mobile applications and even customer support without interruptions. This integration allows customers to start transactions on one channel and complete them on another, providing unmatched convenience.

We also leverage our omnichannel capabilities to gather data from various customer interactions that can be translated into highly personalized banking experiences, tailoring product recommendations and services based on individual customer preferences and behaviors.

Customers have real-time access to their account information, transactions and services across all channels. Whether using our mobile app, website or visiting a physical branch, they can make informed decisions promptly. Customers can also conduct transactions, seek assistance or access information 24/7, making banking more accessible and convenient.

Regardless of the channels customers choose, they can expect consistent and uniform experiences. novobanco’s omnichannel approach ensures that the look, feel and functionality of services remain consistent, fostering a sense of reliability and trust.

Satisfaction shows in our increasingly digital client base: 64 percent of our customers are active on our digital channels (with digital customers increasing by 7 percent versus June 2022). The annual growth of active mobile customers reached 13 percent. In the first half of 2023, more than 70 percent of the individual clients’ segment’s operations were carried out in self-service mode; this figure increased to 84 percent and 94 percent in the small businesses’ and medium-large companies’ segments, respectively. This underpinned the increase in the share of digital sales of life and non-life insurance (plus 92 percent year-to-date; 7 percent of segment sales; plus three percentage points year-over-year); personal loans (plus 42 percent year-to-date; 18 percent of segment sales; plus five percentage points year-over-year); and credit cards (plus 46 percent year-to-date; 3 percent of sales).

The new novobanco mobile-banking app seems to be proving popular with customers. What are some unique or popular features of the novobanco App? According to novobanco’s website, the app for private customers “will surprise you, because it evolves as it interacts with those who use it”. How does it evolve?

The novobanco App aims to revolutionize the concept of smartphone banking. Two main ideas drive this ambition:

  • Proactive personalization: By leveraging data science, the app proactively responds to customer preferences, needs and behaviors, enhancing each individual’s daily life and banking relationship. This approach converts insights into high-quality, customized experiences that simplify user interactions, eliminating the need for extensive app-setting adjustments. The app is designed to “learn” from each user’s daily interactions, adapting to varying levels of digital and banking literacy and providing innovative, personalized experiences.
  • Open-banking integration: The app’s open-banking capabilities allow users to access a broad range of new features. Users can view real-time balances and transactions across all their accounts, regardless of the bank. This information is presented in a consolidated view for easier financial management. Each transaction is categorized instantly, and account activities are automatically organized. This functionality powers features such as expense tracking, budgeting, a financial calendar, personalized financial advice, setting savings goals and more.

Designed to be intuitive and user-friendly, the novobanco App offers a range of services, from savings and money transfers to payments, budget management and subscribing to credit or insurance products.

With digitalization in banking evolving rapidly, how important is it for the bank to ensure that its workforce remains up to speed on the latest digital-banking trends and technologies? And how is this facilitated within the bank (for example, through regular training courses)?

In the swiftly evolving digital-banking landscape, our workforce must remain adept and informed about the latest digital trends and technologies. Recognizing that top-tier technology alone doesn’t secure a competitive edge, we focus on speed, agility and exemplary design to exceed customer expectations.

Our digital-transformation department is at the heart of our strategy, comprising more than 20 agile multidisciplinary teams. These teams are pivotal in mobilizing our entire organization toward digital adeptness. We’re committed to cultivating a talented pool of professionals proficient in digital skills. This is bolstered by forging strategic partnerships with technology startups and fintechs (financial-technology firms) with fresh perspectives and expertise in team dynamics.

To ensure our workforce is consistently updated and skilled, the digital-transformation team conducts regular training programs. These range from formal educational sessions to bespoke demonstrations tailored for our commercial teams and informative presentations accessible to all staff. This approach ensures that every member of our team, regardless of his or her role, is aligned with the latest in digital-banking innovations and practices.

One of novobanco’s signature initiatives is paper-consumption reduction due to implementing its phygital (physical plus digital) program in 2019, fostering a “paperless” culture by reinforcing dematerialization processes (for example, through digital signatures). Are you satisfied with the results of this initiative? Do you have any statistics that demonstrate its success?

This was one of our main transformative programs. We cannot provide a full omnichannel experience without the phygital revolution. We made intensive efforts in this program, and it’s paid off. To this day, there is a 91-percent usage rate, representing more than 46 tons of paper reduced and 56 million liters of water saved. But the most significant number is the more than 34,000 hours of commercial activity saved—the equivalent of almost four years! The efficiency gained with this dematerialization frees up time to concentrate on commercial activities with more added value for customers and employees.

Do you believe retail banking in Portugal will become more competitive over the next few years? If so, is novobanco ideally prepared to maintain or even improve its market share during this time?

Novobanco undertook a turnaround journey, leading to the strong, independent and domestic bank it is today. We have demonstrated our resilience, adaptability and commitment to a sustainable, long-term model. Even in an adverse economic landscape with tight supervision, we reduced net non-performing loans (12.3 percent in 2017 to 0.7 percent in September 2023) through rigorous risk management and divestment of non-core assets, enhanced operational efficiency (recurring cost-to-income ratio of 44 percent in 2022) and achieved our key financial targets in 2022, including expanding the loan book and benefiting from favorable interest-rate conditions.

This means that we are well positioned for the challenges ahead, and our strong balance sheet allows us to confidently tell our clients and the entire Portuguese economy that we are prepared to support them in the trying times ahead, as they supported us in the past.

Our team’s expertise, enhanced by new talents, demonstrates our competitive readiness. Acknowledged by the market with a five-notch rating upgrade by Moody’s Investors Service to Ba3 with a positive outlook, our recovery is driven by a robust restructuring plan, strategic partnerships and customer focus. These efforts mark us as a success story in the European financial sector.

Mr. Ribeiro, I wish you and novobanco every success as you support your clients and the wider economy. Thank you again for speaking with me.


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