Digital Transformation and Sustainability at Produbanco

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By Ricardo Cuesta Delgado, CEO, Banco de la Producción S.A. – Produbanco

 

As part of our long-term strategic plan for 2019-2023, we are directing most of our priorities and efforts towards successfully implementing a comprehensive digital transformation. From the outset, this will mainly involve placing a strong focus on innovation—and doing so by utilising technological development as and when required, with the ultimate aim of consistently enhancing the overall banking experience for our customers.

Digital transformation

The plan consists of key strategic pillars on which we aim to keep building as the digital transformation progresses. Among the most important pillars is fostering cultural change within Produbanco, which will be critical in ensuring the success of our transformation. By leveraging on a broad cultural shift to consolidate growth and diversification, Produbanco can continue ascending as a digital-banking leader in Latin America, one that can offer our customers memorable banking experiences whilst always operating within rigorous risk management and remaining firmly committed to sustainability and corporate social responsibility (CSR).

And the evidence of our success so far is clear, with activity across our digital channels achieving stellar growth. By the end of March 2021, some 64.3 percent of our customers were registered and ready to transact via our digital channels (web and mobile app), each with a username and password enabled. The proportion of such “digital users” within our customer base has grown solidly for the last three years, thanks mainly to our segmented campaigns and advanced analytics that have allowed us to establish a variety of customer-support routes, each with its own level of digital sophistication.

As such, our mobile applications have registered phenomenal growth in monetary transactions, particularly our main mobile app and Produbanco be App, which experienced an increase of 171 percent between March 2020 and March 2021. Our online-banking usage has not exactly been sluggish either, with 60-percent growth registered during the same period. It’s no surprise, then, that we have experienced a major influx of users to our digital channels, with more than 63 percent of our active individual clients now registered for online banking.

What’s more, a hefty 47 percent of access to our banking services now comes via our mobile app, a number which we anticipate will continue to rise this year, especially given that it offers the widest selection of transactions in the Ecuadorian market. Our clients can use the mobile app for all their banking needs without depending on other channels. Indeed, in addition to the most common transactions, our mobile application allows us to sell products digitally, such as digital savings accounts, consumer loans and pre-approved credit cards. As such, the app has become a pivotal channel to enable us to cross-sell our offerings, and it should thus come as no surprise that 31 percent of our clients have made transactions through the app in the last 90 days, a number that ranks as the highest in the country.

But it is primarily through the unrivalled strength of our customer relationships that Produbanco is able to offer a remarkably diverse suite of digital products, each of which has been meticulously designed to satisfy the most pressing needs of specific customer groups. We have tailored our products to best serve specific segments of our customer base, such as Millennials, environmentally conscious clients, frequent travellers and many more. 

For example, we recently launched two new digital accounts aimed at children and young adults to familiarise them with the dynamics of the financial system from an early age as well as to promote sound savings habits and responsible money management. The Mini Account is aimed at children up to 12 years of age, with the appropriate authorisation and accompaniment of an adult tutor, and provides access for the child to fulfil financial missions and receive rewards. Children can also create savings goals in a deliberately fun environment, complete with enjoyable animations. And the Cuenta Ideal (Ideal Account) is aimed exclusively at teenagers aged 13 to 18, who through Produbanco’s mobile app can manage their money, make transactions, request money, pay for purchases in establishments with debit cards, recharge their smartphones, withdraw money from ATMs (automated teller machines) and create savings goals. Such accounts are opened in a completely digital manner by the children’s parents or guardians.

Among our most well-received digital products from the customers’ perspective is our PayPhone App, which facilitates an online payment methodology, thus allowing the sending and receiving of payments from anywhere. It has been created to work as a digital alternative to other payment methods such as transfers, checks and international shipments; it functions as a digital point of sale (POS) that is being regularly used by entrepreneurs, commercial chains, professionals, e-commerce businesses, programmers, freelancers, co-workers and individuals who need to send and/or receive money.

Some of the most in-demand features of PayPhone include:

• Person-to-person payments, which enable our users to make payments and collections instantly using the money that is loaded into their balances or from their credit or debit cards to anyone;
• Payment-to-businesses, allowing a business to create multiple branches and users or to implement a payment button on its website as well as create a store through the app through which customers can search for it by name or business QR (quick response) code and make direct payments;
• A payment button, the implementation of which is simple and secure and is adapted to different web pages. By entering their mobile numbers in the payment button, users can choose their preferred payment methods from their mobile devices and authorise the payments, either using passwords or biometrics solutions such as fingerprint or facial recognition.
• Mass payment links, whereby users can generate personalised links through the integration of an application programming interface (API), which ultimately allows more direct control over transactions and thus provides considerable ease in the setting of maximum-usage dates or limiting consumption to a single event. For instance, a school setting allows the generation of a link for each student and thus enables more direct control over registration and tuition payments.

Sustainability

Another key strategic pillar that we have identified is making a formal commitment to sustainability and corporate social responsibility. Incorporating this pillar into our strategic plan at this stage of our development is of crucial importance, not only for the effective long-term delivery of financial solutions to our stakeholders but also for ably supporting future generations by guaranteeing a proper balance between achieving economic growth and caring for the environment and the social welfare of our communities in Ecuador.

During the last decade, we can proudly say that Produbanco has emerged as the Ecuadorian banking sector’s clear leader in sustainability. Since 2016, we are the number-one lender for sustainable-financing initiatives. And from September 2019 onwards, we have been the founding signatories of the United Nations’ Principles for Responsible Banking, which has only further consolidated our leadership and commitment to building sustainable banking. And by taking a leadership position in the country and implementing the Principles for Responsible Banking, we have been selected to participate in various webinars and workshops held by the United Nations Environment Programme Finance Initiative (UNEP FI), with our chief executive, Ricardo Cuesta, being appointed as the representative for South America on UNEP FI’s Banking Board.

In addition, Produbanco is part of the UN Collective Commitment to Climate Action (CCCA) in conjunction with 33 banks globally; as of April, we will be part of the Net-Zero Banking Alliance (NZBA), in which together with three banks of Grupo Promerica (Costa Rica, Nicaragua and Ecuador), we will take part at the regional level by consolidating our commitments to support the transition of our portfolios according to the Paris Climate Accord (Paris Agreement).

Among the most pertinent recent examples of our work is the partnership we formed last year with Conservation International Ecuador (CI Ecuador) to sign an agreement for the conservation of the country’s moorlands along with the Ministry of Environment and Water and the Sustainable Environmental Investment Fund (FIAS). The agreement promotes the “Conserving our water sources: the páramos (moorlands) of Ecuador” programme and is a joint commitment to promote the conservation and sustainable use of the Andean ecosystem, which is of massive importance for the protection and regulation of water resources in our country. This contribution is among the key objectives of Produbanco: to ensure we are leaders in sustainability issues across Ecuador.

Produbanco also obtained the Carbon Neutral world quality certification according to the ISO 14064-3 Standard, verified by SGS (Société Générale de Surveillance), becoming the first bank in Ecuador to do so. The certification represents a global quality standard in quantifying, evaluating and defining actions to reduce the carbon footprints of organisations under the strict guidelines of the CarbonNeutral Protocol. As such, we comply with the identification of the sources of emission and removal of greenhouse gases, and the certification makes it possible to determine key objectives to help reduce our carbon footprint.

To further achieve our carbon-mitigation goals, moreover, we have joined forces with Costa Rica’s Banco Promerica and Nicaragua’s Banpro—both of which are members of Grupo Promerica—in addition to 40 other banks globally to create an international alliance focused on achieving net-zero CO₂ (carbon dioxide) emissions in the financial industry by 2050. The Net-Zero Banking Alliance aims to ensure the banking industry’s carbon emissions derived from its loan and investment portfolios are aligned with this goal, and as such, banks must actively promote their clients’ investments in renewable-energy projects, energy efficiency and climate-smart agricultural investments to facilitate the transition to a low-carbon model.

We are also heavily involved in supporting our business clients in sustainable manners. To help our SME (small and medium-sized enterprise) customers, for instance, we have implemented a model that seeks to address social challenges, stimulate economic activity and accelerate the transition towards a more resilient and sustainable society. Along with the UN Ecuador Global Compact, Produbanco promotes a programme to generate alliances for the sustainable reactivation of SMEs and facilitate the implementation of collective initiatives that contribute to the achievement of the 2030 Agenda for Sustainable Development. The programme uses value propositions and tools to support SMEs on their paths towards sustainable recovery across environmental and social themes, technology and digitisation, operational issues and capacity building, and interaction and relationship with stakeholders.

∞∞∞∞∞

By placing particular emphasis on both digital transformation and sustainability, we believe Produbanco is ideally positioning itself as not only Ecuador’s bank for today but tomorrow as well. Through the comprehensive expansion and evolution of our digital channels, we are proving every day that we are ready to adapt to our customers’ rapidly changing wants and needs. And by carrying out our services in a sustainable manner and pledging to fight for the long-term health of our planet, we are ensuring that the bank of tomorrow can not only survive but thrive.