Banco de la Producción S.A. – Produbanco has 40 years of successful service to the people of Ecuador behind it, starting off specializing in the corporate sector. In 2014, the bank consolidated with Banco Promerica Ecuador after Promerica Financial Corporation, or Grupo Promerica, acquired a majority percentage of its shares. Grupo Promerica is a large financial group with nine banks across Latin America. Produbanco is one of its most successful banks, having earned outstanding risk ratings and international recognition. The bank prides itself on its excellence in customer service—a standard that has set it apart over the years and one that the bank is currently meeting to the highest degree through its ongoing digital transformation.
CEO Ricardo Cuesta Delgado joined International Banker to bring us up to date on Produbanco’s admirable progress, especially in the digital-banking realm.
Mr. Cuesta, thank you for talking with us today….
What are some of the developments made by Produbanco in retail banking recently?
The bank launched a handful of products that are designed to address the specific needs of its customers. Our credit offering includes one of the most complete loyalty programs in Ecuador. Last year, Produbanco launched two credit cards featuring co-brandings with two of the most prestigious airlines: Copa and Iberia. The new Produbanco Iberia VISA and Produbanco ConnectMiles VISA offer exclusive benefits for customers who travel regularly or those who are planning to travel.
Produbanco offers a remarkably diverse suite of products, each of which has been meticulously designed to satisfy the most pressing needs of specific customer segments. We have tailored products for Millennials, environmentally conscious clients, frequent travellers, etc.
Retail banking is an area in which Produbanco continues to shine ever brighter. More recently, it has been mainly focusing on creating a single, cohesive brand experience for its customers, through which they can potentially gain access to the various benefits and products that are available. In addition to specific banking divisions, technology plays a pivotal role in Produbanco’s achieving its stated objectives.
The corporate sector is the bank’s flagship market, one in which it is the country’s undisputed leader. Indeed, it is its excellence in this sector in particular that has earned Produbanco its reputation for possessing an avid lending appetite, despite the deterioration in operating conditions that continues to plague Ecuador’s banking sector.
What does “Our essence is the Customer” mean with regards to Produbanco’s values? And what are some of the main ways in which Produbanco differentiates its customer service from its banking peers in Ecuador?
Banco de la Producción S.A. – Produbanco is focused on achieving the pillars of its long-term strategic plan: 1) Cultural transformation to assure the success of its digital transformation; 2) Data-driven organization; 3) Strategic segmentation driven by customer behaviour; 4) Decentralized growth in every segment and geography;5) Responsible asset and risk management; and 6) Commitment to sustainability and corporate social responsibility.
We intend to achieve these goals by reinforcing our customer-centred culture, enhancing inter-relationships between the different market segments and strengthening relationships with existing customers. Our institutional priority is creating memorable experiences for our customers, whether they interact with the bank´s physical or virtual channels.
Indeed, Produbanco is arguably best known for our unwavering commitment to serve our customers. The bank’s desire to provide the highest possible standards of customer service continues to remain unrivalled throughout Ecuador. The lengths to which our various teams go in order to cultivate the best, most fruitful relationships with each individual customer is admirable. All available resources are used to facilitate this mission— from many of the best banking professionals in the industry to the smart utilization of the latest technological resources.
Produbanco defines itself as a customer-centric organization. We aim to meet all of our customer needs through excellence in service. This philosophy has allowed Produbanco to acquire a clear competitive differentiation—our continued commitment to maintaining high levels of quality and satisfaction in our product and service offerings sets us apart.
We actively manage service quality standards through various mechanisms, which include:
- Service satisfaction surveys,
- Telephone and face-to-face surveys,
- Mystery shopper,
- Benchmark studies.
Produbanco received the Ekos Gold Award in 2017 and 2018 and scored highest in the Ekos Customer Satisfaction Index (IESC) within the “Large Banks” category. The IESC is a measurement tool used by the Ekos Corporation. Through random telephone surveys, various components of service are analyzed: service-level satisfaction, willingness to recommend the brand, repurchase intention, perceived value and negative customer experience.
In 2014, the bank began working on a strategic technological roadmap that is directing it towards complete digital transformation. How much of the transformation would you say is complete? And what has been the most challenging aspect of the transformation to date?
Produbanco has been undergoing profound changes in the ways it thinks about the business, its people and its clients. In 2014, the bank started working on a strategic technological roadmap that is directing it towards complete digital transformation. More importantly, a shift in the values and mindset is set to make this transformation as seamless as possible for its customers. Produbanco has started to think and act like a digital company that is fully focused on enhancing the client experience.
In 2018, the bank successfully trained key personnel in various methodologies that will enable this cultural shift. Over 100 executives have completed their Design Thinking training. Additionally, 100 executives and developers are now trained in an agile project-management tool, Scrum.
An essential part of Produbanco´s strategy is our strong focus on innovation, utilizing technological developments with the aim of providing better experiences for our customers.
Technology plays a pivotal role in the achievement of Produbanco´s stated objectives. Our main IT projects include:
- Omni-channel banking:The renewed web transactional channel provides a unique customer digital experience—it features a responsive look and feel, and it allows navigation by all browsers and multiple devices. Our design for the transactional channel also allows for friendly usability and provides continuous information for all transactions.
- Advanced analytics and big data in use:Our priority for the next few years is to incorporate non-structured data and social media into our big-data model, thus strengthening it and broadening its capabilities. This information will complement the demographic, transactional and behavioural data already collected to allow us to enrich customer knowledge. We can then offer personalized services and promotions that improve the customer experience and enhance our bottom line.
- Mobility:We are planning to extend all of the capabilities available on the web to our mobile channels as soon as local regulations allow it.
- Social media:We are working on providing customized offers to our segmented client audiences at the right time. In this way, we can generate product and service solicitations directly from the social-media channels available.
- Acquiring/co-innovating with fintech start-ups:We have established strategic alliances with fintech start-ups to integrate innovative services to our mobile apps.
The bank has now established the solid foundations of its omni-channel project, which provides the customer with a consistent format for banking services across all consumer devices. Thus, it enables user-friendliness and usability irrespective of whether a customer wishes to access a service on a mobile phone or a desktop computer. As such, customers are given a seamless technological network on which to complete their bank transactions.
In terms of specific virtual service channels, the most crucial of Produbanco’s recent innovations has been the update of its mobile application, which allows customers to check their account and credit-card balances and transactions and to make transfers, payments for services and airtime top-ups. Useful and pertinent banking information is now at the customer’s fingertips, including the nearest locations of branches and ATMs, as well as information about the latest banking products and special offers.
The bank’s “be Produbanco” app sounds like an exciting new product. How positive has the customer feedback been so far to this app? And what do you consider to be its most appealing features?
An essential part of Produbanco´s strategy is our strong focus on innovation, based on technological developments and with the aim of providing better experiences for our customers.
Our focus on innovation, coupled with an analysis of Millennial behaviour, is reflected in our digital account “be Produbanco”. It provides digital users with a great tool for their personal finances and simultaneously gives them a different customer experience, without ever having to visit a bank branch.
The innovative app, which can be downloaded free from digital stores (App Store and Google Play), allows our customers to open an account directly on this platform, without approaching a branch. This solution helps to manage financial resources with total ease and security. The application can be accessed from any mobile device with internet connection 24 hours a day, 365 days a year.
If I’m not mistaken, the bank recently launched its first self-service branch, allowing customers to carry out transactions through interaction with advanced technological equipment. What are some of the key features of such a branch? And do you envisage that the growth of self-service branches will eventually mean the end for the bank’s traditional branches?
Produbanco launched in 2018 its new self-service branch, a different service concept that allows customers to carry out transactions through interaction with advanced technological equipment. In these branches, the interactive equipment has replaced the cashiers and advisors of a traditional bank branch. The concept helps its customers transition into the digital era. The self-service branches have a simple yet elegant design and are equipped with multifunctional ATMs.
The most innovative solution at these branches is the automated kiosks, where customers can access the bank´s website and be assisted via video-conference by an executive who will advise the customer on products and services, and respond to any requirements or complaints. Produbanco´s self-service branch is the first branch of its kind in the country and is located in Ecuador´s leading retail supermarket chain, one of Produbanco´s most relevant customers.
Has the bank’s digital transformation been influenced by what’s happening in the fintech sector? Has there been opportunity to collaborate with fintech start-ups to deliver the most innovative products and services to Produbanco customers?
We have established strategic alliances with fintech start-ups to integrate innovative services to our mobile apps.
Two years ago, we partnered with Payphone, a startup at the forefront of innovation, to launch the first mobile payment system of the country. It allows customers to make payments with credit and debit cards through a smartphone, without revealing credit and debit-card information to vendors. All you need to do to use the app is download the app and register. Now, we have fully integrated the Payphone platform inside our mobile apps to have the option to make payments directly from the app without carrying the physical debit or credit card.
As CEO of Produbanco, what do consider to have been your own biggest challenge of the bank’s digital transformation thus far?
Within our strategic plan, we direct our priorities and efforts towards the digital–transformation plan. We are focused on short-term digital enhancements for our customer base and medium– and long–term flexibility to allow for the best and most automated user experience possible.
Our growth strategy is focused on maintaining our market share in our core markets and growing our customer base in other markets. We have been able to increase our market share because of our incremental growth in cities other than Quito, Ecuador´s capital city, which is our core market.
One of the projects recently initiated to further strengthen our position in providing seamless digital banking solutions is implementing the SAS Customer Intelligence platform. This platform will enable us to align data, analytics and insights on customers and prospective clients. Creating a relevant and individualized approach is essential to engage with customers, right when it matters. SAS Marketing Automation will allow Produbanco to build meaningful campaigns in an automated, trackable and highly repeatable fashion.
In addition to digital solutions that will help us on the front-end with the customers, Produbanco understands that digital transformation is also a cultural change that requires employees to continually challenge the status quo, experiment and get comfortable with failure. Therefore, Produbanco implemented SuccessFactors by SAP to automate the information related to our employees. This tool enables leaders to access updated information (objectives, performance, career plan, work history, succession plans). Thus, leaders can empower and engage their teams and develop employees with a longer-term vision for their growth within the bank.
The “Su Cambio por el Cambio Foundation” sounds like a very worthwhile project with which the bank is currently involved. Can you briefly explain the goal(s) of this project? And also, how successful do you consider it to be so far?
Produbanco is heavily involved in assisting Ecuador’s underprivileged communities. Our most important partnership pertaining to such work is with the Su Cambio por el Cambio Foundation. The Foundation has provided crucial support in the rescue, education and re-insertion of approximately 6,000 vulnerable children and adolescents. It has also assisted in materially improving the quality of life of around 400 families stretched across 18 communities within the province of Bolívar, the poorest province in Ecuador. The involvement in these communities has also included important nutritional and dietary advice and support for more than 300 children and adolescents, and the development of a structured program to care for 80 senior citizens.
If I’m not mistaken, Produbanco is also at the forefront of the global shift towards clean-energy adoption. What specifically has the bank accomplished in recent times to encourage this shift?
Since September 2016, we have been part of Global Compact, a United Nations initiative through which Produbanco has voluntarily committed to align its operations and strategies with the universal principles of human rights, labour and environmental standards and the fight against corruption—all issues closely linked to the 2030 Agenda for Sustainable Development Goals (SDGs).
Additionally, we have made publicly available our eleventh Corporate Social Responsibility (CSR) Report, based on the Global Reporting Initiative (GRI) for CSR report parameters, version G4. GRI is a non-profit organization that has set up an integrated framework for the presentation of information on sustainability, with principles and indicators that enable organizations to assess and report their performance in economic, environmental and social matters. The Corporate Social Responsibility Report presents Produbanco´s performance and achievements regarding its environmental, social and internal governance priorities. It, moreover, describes how the bank forges relations with all of its interest groups.
Produbanco is also at the forefront of the global shift towards clean-energy adoption—and we are moving away from activities that generate an abundance of carbon emissions. 2018 was the fourth year in a row in which we received a Carbon Neutral Certification. This certification is given to organizations that are intent on promoting activity that reduces and offsets carbon emissions generated by their own operations. The bank also runs several energy-awareness campaigns to ensure its employees have sufficient knowledge about their resource utilization, especially pertaining to the use of paper, water and energy. Emissions have further been offset by Produbanco via the sponsorship of 950 hectares of forest in the Zamora province, which has enabled the bank to laudably offset 100 percent of its emissions. In so doing, the bank provides a shining example of ecological efficiency and of how to go about utilizing resources carefully.
In August 2016, Produbanco launched its Green Line Program. This program was successfully developed and implemented by multidisciplinary teams that analysed the initiative and market conditions in order to create the most suitable financial structure for the Ecuadorian market, with a special focus on improving the productivity in the SME (small and medium-sized enterprise) sector. The program offers customers preferential conditions, including capital grace periods and capital and loan-repayment terms, turning it into an affordable line of credit for SMEs. This process involves a rigorous examination of the risk. The SARAS credit-rating methodology was implemented in the internal credit process. Produbanco´s SME customers have benefited from a total of $80 million in disbursements that have been allocated since the launch of this program.
To fulfil the Green Line Program, at the end of 2018, Produbanco developed the first green savings account on the market. The purpose of this new product is to attract resources destined exclusively to green line loans.
Are there plans for Produbanco to expand its geographical presence beyond Ecuador, perhaps into neighbouring Latin American countries?
Incorporated in 1978 and headquartered in Ecuador’s capital city, Quito, Produbanco has shown tremendous capacity for growth over the years, to the extent that today it can boast of an extensive network of 110 full-service branches, 66 transactional branches under its subsidiary brand Servipagos, 3,953 agents and 334 ATMs, all of which sufficiently service close to 922,000 customers.
Produbanco is also part of Grupo Promerica, an international financial-holding corporation with a visible banking presence in nine Latin American countries: Ecuador, Costa Rica, Cayman Islands, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and Panama. Promerica Financial Corporation, the Group’s holding company, is headed by a multinational team of executives with a broad knowledge of economics and banking in the region. They have turned Promerica into one of the top financial groups in the region, with over USD13 billion in assets, two million customers and 10,000 employees. The main shareholders also run Terrabank NA, a commercial bank operating in southern Florida, USA.
In November 2016, Produbanco opened its new headquarters and simultaneously introduced a new corporate image. Our new corporate image is much more powerful, and it brings us closer to our stakeholders. It also displays our customer-focused strategy—we strive to create outstanding experiences for our customers and staff. Furthermore, our new corporate image is aligned with Grupo Promerica and its various regional banks to showcase our regional presence and prowess, with a vision of growth in Ecuador and in the region.
Finally, in November 2018, Produbanco celebrated its 40th anniversary.
It sounds as if Produbanco has much to celebrate after its 40 years of exemplary customer service. Thank you for your time today.