Author: World Finance

Afore XXI Banorte centres customer experience with behavioural science

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Afore XXI Banorte is the largest pension fund provider in Mexico – and it plans to maintain its pole position, with a strategy focused on three targets: transforming the customer experience, technological innovation, and redesigning the investment process. In the first of three interviews with XXI Banorte executives, CEO Juan Manuel Valle Pereña explains his vision for a renewed customer experience, using machine learning to anticipate customers’ needs, and how behavioural science is helping the Afore better incentivise voluntary savings. Part two with Juan Manuel Valle Pereña dives deeper into XXI Banorte’s technological innovations, while part three with CIO Sergio Mendez Centeno discusses the Afore’s investment process.

World Finance: Juan Manuel, let’s start with your vision, your ideal customer experience.

Juan Manuel Valle Pereña: A little bit more than one year ago, when I arrived at Afore XXI Banorte, we realised that we were losing customers. And it’s not something that you usually do: you wake up in the morning and you want to change who is administering your resources for retirement! And we realised that we needed to make some changes.

So, customer experience now is our priority, and we have been working hard in achieving that priority through different means. Technology, the kind of information we provide, the kind of information we get from them. We need to understand them better: what they are thinking, what they need, how they behave, what they expect. And after doing all that, delivering exactly what they need.

World Finance: So tell me more about how exactly you are engaging your customers. How are you listening to them, understanding their needs, and how to communicate back to them?

Juan Manuel Valle Pereña: We use machine learning tools and data sciences with information that we can find in social media, information from the chats that we have with our customers, information that we get from the call centre. Using all that data we can better address their interests and their needs. So we’re able through bots to answer any question very fast.

We have been moving towards a multi- or omni-channel platform, where in every single way they can contact us, they could expect a service of excellency; either in our office, our call centre, we developed an app. And with the app they have all the information they need.

World Finance: What effect have your efforts had so far, and what’s next?

Juan Manuel Valle Pereña: The results have been positive. We have heard good feedback.

We also introduced a different way of being evaluated by our customers, the net promoter score. And in every single channel that we have, we have seen an improvement.

We have very ambitious goals for the end of the year in the net promoter score, and also in the proportion of customers that do voluntary savings.

World Finance: You explained last time we spoke about the importance of encouraging voluntary savings; how are you achieving this?

Juan Manuel Valle Pereña: We have been working with an international organisation, ideas42, and they apply behavioural sciences to everyday conducts. And they help us to identify the kind of things that we should be doing, the kind of incentives we should be using, the kind of information we should be providing to our customers.

With that information, with those tools, having a very good product – there is no better product for savings in Mexico than pension funds – we’re framing the structure so that we have the right incentives, the information that might be required, for a successful implementation.

So we have been working hard; we already have some of the tools in place. And the launch of the campaign for voluntary savings will be in July.

Recall Capital launches dynamic market trading solution in London

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Recall Capital is a dynamic trading solutions provider, promising listed companies lower volatility, increased trading volume, and a platform for new capital acquisition and internationalisation. Founder and CEO Björn Wallin has been working with SMEs in Sweden for four years, and the company is now expanding its offering through Europe. Björn explains how Recall Capital creates a mini ecosystem for each of its client companies: drawing money from the financial market, creating value within the business, and feeding that value back to the market. The ultimate benefit, he says, is that SMEs can concentrate on developing their business – rather than having to worry about financing themselves.

World Finance: How has market behaviour changed, that companies now need these kinds of services?

Björn Wallin: First of all, investors have become more realistic today than they have ever been before. They are not so blindly optimistic anymore.

As a consequence of that, I think SMEs have to take more responsibility for themselves. It’s not that they can’t count on the financial market to provide it with money or assets as they have done before: they now have to deal with this themselves. No one else is doing it, so it’s more pressure on management and the board of directors that they have to actually handle all this to get the company financed.

World Finance: Now, the New York Stock Exchange has been offering these services itself for many years; what’s been its impact there?

Björn Wallin: Basically they’re doing half of what we are doing. They have what we call the designated market maker, which is a technical solution topped up with a human touch. We’re doing roughly the same – having the same parameters, specialising in SME companies – but we’re also using this trading solution for the capital acquisition side.

So, we’re creating a mini ecosystem for every company that we have in the financial markets. We add on a tap, straight into the market. Open it up a little bit, get the money over to the company so they can use it for their operation; create value, it goes straight back into the financial market. We open up the tap again, and we get the money, close the tap, over to the company so they can create, and loop back to the financial market… so this is like an ecosystem for SMEs.

World Finance: And what effect does that have on trading volumes and volatility?

Björn Wallin: So basically there are strict relations between volumes, values, and volatility. And all algorithms out there in the market are actually trying to handle all those parameters.

What we have done is actually, we have looked at specifically SMEs. We measured 20,000 companies worldwide, just to understand how these relations are combined to each other. And when we found that out, we added other dynamic aspects as well. We’re adding on different patterns from the behaviour in the trading, the likely volatility ahead; and on top of that we also put some human touch.

The result of it is lower volatility, which is super good for all kinds of trading. So I think our trading engine is more appropriate for SME companies.

World Finance: And in this way you’ve adapted this solution specifically for SMEs – and SMEs in Europe, as well?

Björn Wallin: Yes, absolutely. We’re now going into Europe – but we can use it anywhere, because now we’re looking into the SME market globally. There’s the same pattern, the same behaviours, basically the same everywhere.

What we have to consider from country to country is some kinds of legislation, or if there are certain other adjustments we have to make. But basically we can use it anywhere.

So I would say, we’re now entering Europe. The biggest SME markets are Australia, Canada. But, let’s start in Europe.

World Finance: And what’s the ultimate benefit to those SMEs?

Björn Wallin: I think the best benefit is that the customer can actually get more focused on creating and developing their own business, and let us handle the financial issues.

I think that’s good for the company, I think that’s good for their shareholders as well. So it’s a classic win-win solution.

World Finance: Björn, thank you very much.

Björn Wallin: Thank you.

Baiduri Bank CEO: Digitisation must pair with personalised, human service

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Brunei’s wealth depends on its oil and gas sector, representing more than 60 percent of the country’s GDP. Decades of diversification efforts have yielded small progress, although in recent months the country has seen significant FDI windfalls from China, with investments now totalling over $4bn. Baiduri Bank is one of the leading banking groups in Brunei, and its CEO, Pierre Imhof, discusses the country’s continuing work to diversify its economy, how Baiduri Bank is participating in those efforts, and digitisation in Brunei’s financial services.

World Finance: Pierre, how urgent is Brunei’s need to diversify its economy?

Pierre Imhof: Oh, definitely it’s very urgent. As you rightly said, for many years the country was relying on the oil and gas income. Definitely it is something which is very important to the country. But it’s time now to move forward.

For example, there are bodies like DARE, Darussalam Enterprise, which is helping SMEs and the private sector to develop and diversify. There is another body, the Brunei economy development board, the role of which is to attract foreign direct investment, and as you mentioned earlier, you see more and more investments from abroad. Especially from China.

It’s good for Brunei that oil and gas prices have increased in the last few months, but I think there is now an awareness by everyone in Brunei that diversification is a must.

World Finance: How is Baiduri Bank participating in these efforts?

Pierre Imhof: We are working to develop products which are designed to help small companies to finance their working capital, to finance their acquisition of premises. But we have also other products which are not strictly related to financing.

For example, we have corporate credit cards – now you know even companies are doing a lot of payments online, so it’s important. For smaller companies which do not have always the means to have a full website, we have developed an app, MerchantSuite, to allow these companies to let their clients pay online.

We have mobile applications, we have internet banking of course; so, a lot of services going beyond pure financing.

World Finance: And on the retail side, how are you helping customers take control of their finances?

Pierre Imhof: It’s very important that for our retail clients we give them not only the expected services from a bank; but also advice, to make sure that our clients are well aware of what they can do and what they should do.

So for clients who have excess liquidity, who have some money to place: to advise them where to go, what to do, depending on their risk appetites. And we make sure that when we talk to our clients that they will not be in a situation of over-indebtedness.

But we go beyond that. We also have what we call a free financial assessment, where we provide to our clients some additional information or additional advice for them to know how to plan their retirement, how to finance the acquisition of a home. So, we are giving a lot of very personalised advice to our clients.

World Finance: And how is Brunei’s financial sector evolving along with the global trends in financial services?

Pierre Imhof: There is a real digital revolution all around the world. Now it affects the financial environment – all banks. And we are working in an environment in Brunei which is techno-savvy. So definitely the country is moving forward to good modernisation of the banking environment.

World Finance: And how is Baiduri Bank positioning itself in this context?

Pierre Imhof: Baiduri Bank wants to offer to its clients what they expect in terms of digital banking.

Definitely when it concerns banking transactions, it is very important that it is easy, fast, and simple. In that respect with the digitalisation that is what we want to achieve.

But we also want our clients to have access to more personalised and human advice: an account officer, a relationship officer, with whom they may talk, from whom they may get advice, either on the phone or physically in our branch network.

Digitalisation is great, but it has to go together with a personalised banking service.

World Finance: Pierre, thank you very much.

Pierre Imhof: You’re welcome, thank you.

Wema Bank launches ALAT to kickstart its digital transformation

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ALAT is Nigeria’s first fully digital bank, built from the ground up to provide a branchless customer experience. It’s the child of Wema Bank, which has been aggressively expanding its digital services in recent years. Ademola Adebise and Moruf Oseni from Wema Bank discuss ALAT’s success, its products and incentives, and the further digitisation strategy that is in the bank’s future.

World Finance: ALAT is Nigeria’s first fully digital bank, built from the ground up to provide a branchless customer experience. It’s the child of Wema Bank, which has been aggressively expanding its digital services in recent years. Ademola Adebise and Moruf Oseni from Wema Bank join me now.

How successful has ALAT been, and what’s the potential for a fully digital bank in Africa?

Ademola Adebise: It’s been an exciting journey for us. In the last nine months we’ve on-boarded about 200,000 customers, with a deposit balance of about NGN 1.3bn. And on a monthly basis we do transactional volumes of about NGN 15bn.

In the next three years our target basically is to on-board 2.5 million customers, with a deposit balance of NGN 100bn.

And in terms of Africa; Africa has a very youthful demography. And if you look at 2016 and 2017, the growth of sales in mobile phones was about 47 percent. Internet penetration is just about 29 percent, which shows that there’s an opportunity for a fully digital bank to thrive.

World Finance: What’s Wema Bank’s digitisation strategy?

Ademola Adebise: Our strategy is premised on leveraging existing and emerging technologies to provide compelling products and services for our customers. The focus is really meeting our customers’ lifestyle needs.

Our service vision is around simplicity, reliability, and convenience. We believe that with ALAT, a lot of things will happen: we’ll begin to look at strategic insights, data analytics, agile and best in class technologies to provide a world class service.

World Finance: Moruf, what do you currently offer digitally, and what other products are in the pipeline?

Moruf Oseni: First of all we have full account opening in five minutes or less, without getting into any branch. You can fund from any bank account and any bank card, internationally and locally.

We also allow free cards, which can be delivered to anywhere in the country. There’s also something called in-app debit card activation. We have instant loans, group and individual savings with 10 percent interest rates. We have a 24 hour contact centre. So we have a whole gamut of things we’ve digitised in the first phase.

Now, going forward, there are quite a number of things we want to introduce, based on customer feedback. The first is our personal financial planner. We have artificial intelligence and virtual assistance. We’re coming out with something we call iconographic gamification. We’re going to also have something we call ALAT Plus, which will speak to our current account and our corporate account. And we’ll also do international remittances.

Our plan at the end of the day is not only to digitise our customer journeys; the idea is to digitise the operations of the bank end to end; from trade services to operations to treasury. We intend to digitise the bank across the board, and we intend to be the one-stop digital bank in Nigeria.

Ademola Adebise: In addition to the features that Moruf already stated, we also intend to ensure that we improve on customer engagement, to ensure that we know exactly what they really want.

We continue to build on our partnerships, so that we can meet the needs of our customers. And lastly, we build the back-office systems, to make sure that we can meet the growing demands of our customers.

World Finance: And how are you incentivising customers to go digital?

Moruf Oseni: We’re passing on a lot of cost benefits to gravitate them towards the platform. Also we’re educating them on the advantage of having a digital bank, instead of a traditional bank: you can sit in the comfort of your home and do everything you want to do.

Also with a digital bank we’re mapping into their lifestyle. So, basically the idea is to meet them at their every point of convenience; whatever they need, we’ll be there. That’s the idea.

World Finance: And finally, what’s Wema Bank’s vision for banking in Nigeria?

Ademola Adebise: We believe that banking is changing; moving from the brick-and-mortar to digital. The landscape is changing pretty fast, and for us, we want to be the leading digital bank in Africa, providing very innovative financial services to our customers.

We believe that providing this in a very easy, convenient, and reliable way – and of course, more cost-effective – we will be able to create shareholder value for our stakeholders in the bank.

World Finance: Ademola, Moruf, thank you very much.

Ademola Adebise: Thank you.

Moruf Oseni: Thank you.

Thanks for watching. Click through for more interviews with the world’s most innovative banks, and please subscribe for the latest international business insights from worldfinance.com

Portugal launches new investment fund path to golden visa

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For high net worth individuals, a golden visa is a gateway to freedom. It’s not about relocating – but about creating future opportunities for their families. They may want an improved quality of life, access to better education, or a safe haven from political instability. Since 2012, Portugal has been offering just this portal to independence. Tiago Camara and David Machado from ptgoldenvisa.com explain how the programme works, and how the new investment fund route makes it simpler than ever to acquire a golden visa.

Tiago Camara: The Portuguese Golden Visa programme allows investors to freely live, work, and study in the whole Schenghen area; and after six years they can even apply for a Portuguese passport.

It’s a straightforward programme with no grey areas; if one invests a minimum of €350,000 in a Portuguese investment fund or in a real estate product, they will get their residence permit card in Portugal.

Investors can also add family members to their applications as dependents, and there’s no need for relocation. Just a minimum stay of seven days – they are already complying with the rules of the programme.

One of the main routes for applicants has been investing in real estate. Investors can expect return on their investments, in the main cities, of around 10-12 percent every year. Tourism is increasing 50 percent on the last three years, allowing investors to place their properties on the short rental market, renting these properties to tourists, and generating per year around five to 10 percent rental income.

The launch of programmes like Golden Visa and Non-Habitual residents generated a huge demand for real estate products in our country. The Portuguese are also investing in real estate instead of having their money in the banks. At the moment, supply cannot keep up with demand, which provides a great capital appreciation on properties.

World Finance: With demand outstripping supply, there’s an urgent need for more real estate products in Portugal. To address this, the Portuguese government created the new investment fund path to the golden visa this year.

David Machado: From 2018, you are able to invest €350,000 in a Golden Visa qualified investment fund, which is fully regulated by the Portuguese Stock Exchange Market, and audited by third party companies. This option comes free of taxes and is focused on the bottom line investment, creating a very fast and interesting solution with high returns.

PTGoldenVisa is working on a basis of a close collaboration to implement the first fund in Portugal qualified for Golden Visa. It’s sustained in two major criteria, which we fully share 100 percent of the strategy vision: first, invest in real estate easy to resell; and second, invest in real estate easy to rent out. This investment fund is managed with a safe approach to market, without leverage.

The goal here is to invest in real estate opportunities already identified; such as developing private villas with swimming pools close to tourism spots, refurbish buildings in the major city centre avenues, or convert hotels into tourism apartments to be able to be sold on a piece-by-piece basis.

The term of the investment is planned for seven years, custom designed to optimise the Golden Visa requirements, and is expected to generate over six percent return per year. This uses a very conservative approach, considering that the market has been growing double digits per year.

As an exit strategy, it’s an investor right, granted by the regulator, to exit the fund any time you want. Additionally you can always resell the fund units to other investors, or simply convert the units into real estate assets supported by the fund.

Tiago Camara: PT Golden Visa offers a long-term relationship solution which fulfils all the needs of our clients during the investment period. We will continue to enlarge the scope of our integrated services, since that’s what differentiates our company from most of the service providers, and makes it special.

Golden Visa residence permit programme has a huge impact on the Portuguese economy. This is the reason why all political parties and the government are constantly supporting this programme. So far, €3.5bn were injected in Portugal through the Golden Visa programme; and 95 percent of this amount was investment in real estate.

Forty percent of all real estate transactions last year were made by foreign investors. The majority of them with the objective of getting the residence permit card.

The Golden Visa residence permit is our golden egg, and our politicians know it. We are very confident that the programme will keep on being supported by our government; and we are here to support all investors.

Jordan Islamic Bank invests in solar power as part of social responsibility

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Jordan Islamic Bank is the country’s largest Islamic finance provider. In December 2017, its CEO – his excellency Mr Musa Shihadeh – signed an agreement to establish a solar power station, to provide renewable energy to its branches. It’s a concrete example of the bank’s commitment to social responsibility and sustainability. Musa Shihadeh explains the ambition behind the solar plant, and how Jordan Islamic Bank supports local businesses in their sustainability efforts – all with the drive to serve the economy of Jordan and make banking simple, fair and transparent for the Jordanian people.

World Finance: Tell me more about this solar plant; what do you hope to achieve?

Musa Shihadeh: Jordan is a non-producing oil country, and we import it. Three hundred days are sunny days in Jordan – therefore we made that plant.

This plant will cover 85 percent of our needs for electricity without oil, from the sunshine. And this will cover one third of our branches in the Amman area. That helps us by saving over the five years almost 50 percent of our costs of energy. Saving the government of Jordan foreign currency for importing oil, help the economy, and create a clean product for the climate and the country.

World Finance: You’re also working with local businesses to help them improve their sustainability; tell me more.

Musa Shihadeh: Yeah, we do help people to have sustainability of their business. We train SMEs, individuals, corporates; explaining to them how we can help, how can they benefit to further their business, and continue making profit and helping the economy as well.

World Finance: Another key aspect of your social responsibility programme is working to promote financial inclusion – what work are you doing?

Musa Shihadeh: Financial inclusion has been important. We try our financial inclusion by reaching women, young people, and other people who need to have banking activities. How we do it – we try to train and help, and explain, and make seminars and explanations of our services. How can they get it easily, transparently, fast, and through technology.

We have phone banking, internet banking. They can do their business through it, and we can reach them wherever they are in the country, as well as connect them with international institutions all over the world.

World Finance: What other innovations are you bringing to market?

Musa Shihadeh: We bring whatever people need to satisfy their need and services and activities. For example, products for paying fees by loans for students. Paying hospital invoices, paid over the years. Paying their bills through eFAWATEERcom, which is the electronic government for that.

That’s what we invent and give for our customers, to satisfy their needs.

Our slogan is ‘our customer is our partner,’ and with this slogan – and with the easy access to our products – helps customers to further their business and get good returns for them and for our bank as well.

World Finance: This has helped you record good financial growth?

Musa Shihadeh: Sure. In assets, deposits and investments we are growing yearly. We have almost 15 percent return on shareholders’ equity, while the average banking sector has 10 percent.

This furthers our business as a bank, and further satisfies our customers, depositors, as well as shareholders in their shares.

World Finance: What do you hope to achieve with Jordan Islamic Bank? For the country and its people.

Musa Shihadeh: Our ambition is to serve the economy of the country; help the country as part of the system.

And for our people, that we connect them internationally. And that furthers the business for our customers, and satisfies them in fairness and transparent transactions and activities.

World Finance: Musa Shihadeh, thank you very much.

Musa Shihadeh: Thank you.

Kuwait International Bank targets digital innovation for retail growth

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Kuwait International Bank has been providing financial services to the country for over 40 years. In 2007 it responded to growing demand for Sharia compliant services and transformed into a full-fledged Islamic bank. How will it transform next? Mohammad Said El Saka is the bank’s deputy and acting CEO, and at the top of his agenda is digital innovation. He explains the Kuwait International Bank’s vision and strategy, and the successful year it delivered for the bank – both internally, as well as for its customers and shareholders.

World Finance: Tell me about your vision and strategy for the bank.

Mohammad Said El Saka: The main vision is to be the Islamic bank of choice in Kuwait, and we have defined three pillars to work on. One is the digitalisation, focusing on retail. The second one is to go advisors for the corporate, mid-to-large size. And the third one is one stop real estate shop.

The bank has been established back in 1973 as a specialised real estate bank, not only focusing on real estate finance, but also specialising in both property management as well as real estate appraisals. So we wanted to capitalise on this as well.

In order to achieve these three pillars, we’ve been working on five core competencies. One is digital innovation, two is service and product innovation, the third one is control efficiency, fourth one is risk management excellence, and the last one is strategic pricing.

World Finance: So how successful was this strategy in 2017?

Mohammad Said El Saka: It was very successful actually, in terms of reflecting very good results on the bottom line. We have growth on all the financial dimensions: total assets, financing receivables, operating income, and customer acquisition.

We’ve recorded almost $4bn as deposit balances end of 2017. And here is a very successful story about the strategy implementation, because we have relaunched the full suite of our deposits.

We had a product called Arzaq, it was relaunched back in early 2015, and it has recorded continuous growth for the last 12 quarters.

We’ve also launched a new long-term deposit called Al-Boushra, it’s three years that distributes on a semi-annual basis. We have re-introduced our savings accounts, changed the payment terms to be on a quarterly basis rather than on an annual basis, which actually recording one of the highest if not the highest profit returns in Kuwait.

We have also launched a similar account, but for corporates, as well as the last product is a flexible deposit end of 2017, with a magnificent impact on the market.

World Finance: Sounds like a positive year for the bank and your customers; how about your shareholders?

Mohammad Said El Saka: There was also a good reflection on the shareholders, because we have been listed in MSCI Morgan Stanley Capital Index for the small caps back in June 2017, and were also shortlisted in FTSE Russell Capital Equity index. Also cash dividends payout is one of the highest as well.

World Finance: Give me some examples of the digital innovations you’re bringing to market.

Mohammad Said El Saka: Two main products we launched in 2017. One is for the omni channel and mobile application, and the second one is the first iteration of its kind; it’s visual IVR. So we’re simply following the life of the customer, not only to have a normal routine contact centre, but it became a visual one. So it’s like, one of its kind in omni-channel product that’s launched in 2017, and we have a lot to go actually in 2018 as well.

World Finance: And all of this success has been recognised with a number of accolades over the year.

Mohammad Said El Saka: Yes; first of all we had the honour to receive the World Finance awards as the best Islamic bank in Kuwait, and best Islamic Bank in GCC, and also best customer acquisition, which reflects our deposits.

In addition, the Union of Arab Banks has recognised us as the best vision in banking strategy. Bankers Middle East has also recognised us as Best Change Management in Kuwait, and these two awards reflecting the strategic implementation and the change management that we have.

Capital Finance International as well, the fastest growing Islamic banking in 2017 MENA, and the best Sharia compliant bank. Forbes has also recognised us as one of the top 50 listed companies in Kuwait.

So it was a very successful year, and we wanted to extend our appreciation to our customers, depositors, shareholders, employees, and special thanks to the regulatory authorities, especially Central Bank of Kuwait for their guidance, supervision, instruction, and continuous support.

World Finance: Mohamed, thank you very much.

Mohammad Said El Saka: Thank you sir.

Standard Insurance CEO: ‘Products of tomorrow may look like toys today’

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Standard Insurance is one of the leading non-life insurers in the Philippines, and the country’s largest car insurer. The Philippines is ranked fifth in the long-term climate risk index, so it really is at the sharp end of risk management. John B Echauz, Standard Insurance’s president and CEO, explains the challenges that insurance companies are facing today, the ways his company is adapting, and the innovative products it’s bringing to market in order to be ahead of the curve of customer expectations and disruptive competitors.

World Finance: John, what are the big challenges you face as a general insurance provider today?

John B Echauz: All major insurers are going through the same thing. Number one: competition. It’s not going away any time soon. Prices are coming down, rates are coming down, margins are getting compressed.

Number two: catastrophic events. Climate change is here to stay. The return period of a bad typhoon used to be centuries, then decades, now maybe years.

Third would be disruption. Customers want new things. Is our team prepared to provide them these things, or will they be provided by new companies that are not even on our radar screens today?

Number four of course: the business cycle. Things aren’t always good; when will it turn bad again? When is the turbulence going to hit?

These four things are our reality. We deal with them every year. So the question is: what must we do to adapt? How do we take our tools, take our people, take our know-how, to convert these into opportunities?

World Finance: Answer that question for me: how has Standard Insurance adapted to overcome or mitigate these challenges?

John B Echauz: The first order of the day is to take care of our customers very well, today. That’s very important. With no customers today, there is no future to speak of.

Number two I would say is to keep our operating systems contemporary and modern. They must be ready all the time to meet the needs of customers today, and tomorrow.

Number three: we take number one and two, and try to do it outside the Philippines. Our group chairman is an avid fisherman, and he knows what it means to look for new fishing grounds. We’re always up for a new adventure.

Number four: we take bits of everything we’ve learned, and how do we make these into new commercial enterprises? The products of tomorrow may look like toys today, so we need to make sure that all those things we can convert into something that is viable for the future.

And number five I would say is, follow our instincts. As businesspeople, as entrepreneurs: they should lead us to very good things.

World Finance: The toys of today that may be the products of the future: what innovative products are you bringing to market?

John B Echauz: We’ll talk about three things that we kind of like.

The first one is our technical centre. It’s a seven hectare facility to take on vehicles that should be total losses. But in this case, no: we can fix them, and minimise our costs. So if you have a total loss vehicle, it would otherwise be scrapped, we can restore them here. Interestingly we take the vehicles that don’t get resold and we can chop them up and sell the parts online.

Number two is we have an insurance policy that’s bundled with a term life insurance policy. Back home, many people have car insurance, but many people don’t have life insurance. Term life… no one really wants to sell it anymore, but it’s a good product, it’s affordable. So what we do is we bundle the two – motor and term-life – and then it makes it easier for our customers to have life insurance cover.

Number three is for climate change. So, every car generates about two tonnes of carbon dioxide. We have a service: pay us an extra $20 and we will plant enough trees to offset your carbon footprint. That’s about one hectare.

It’s important for us that we try these things. Some of them work, some of them don’t work. But we have to try. We want to make sure that we don’t miss any major trend.

World Finance: Is this helping you grow? And how are you keeping your variable costs low?

John B Echauz: So far so good. But, we look at our total cost per policy, which means its variable cost and fixed cost.

The first thing to keep variable costs and fixed costs low is to keep our people happy. We have to make sure that each associate feels loved, invested in, engaged. Then everything is possible. Sales go up, waste goes down; and each one is able to contribute to create programmes that will make our company better, and keep variable costs low.

World Finance: And what else does the future hold for Standard Insurance?

John B Echauz: We don’t know what the future will bring for us, but what I find is that the better we are to our people and to our partners and to our customers, the opportunities come.

Having a nice conversation with someone, whether the person is in Manilla, or in a province, or here in London; it leads to many, many new things.

The things we can predict, I would say, on the best day will be just 30 percent. The 70 percent are the things we can’t predict. Of those, half can be considered threats, but half can be considered very good opportunities. So that’s how we roll.

World Finance: John, thank you very much.

John B Echauz: Thank you very much.

Irkutsk Oil Company expands gas project into polymer production

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Irkutsk Oil Company was the first oil producer established in eastern Siberia. In 2010 it embarked on an innovative gas project; the first of its kind in Russia. It began with reinjection of natural and associated gas to improve its recovery rates and reduce emissions. Today the project is moving into gas process and polymer production; and in the future, explains chief financial officer Yuriy Rubin, may turn to electricity generation to power crypto-currency mining companies. He discusses the progress the business has made, and its competitive advantages selling polyethylene to China.

World Finance: Talk me through your existing gas facilities.

Yuriy Rubin: Our gas properties are not connected to any gas infrastructure. There is no gas infrastructure in the Irkutsk region, and that’s why we came to the solution that instead of selling – or trying to sell – gas into gas pipelines (which as I said doesn’t exist) we’d rather process it into various components, and market them separately.

It started with a gas cycling process, the first of its kind in Russia, to recycle gas, reinject it back into formation, to maintain zero pressure and simultaneously strip off condensate – the most heavy and valuable product that can be recovered from the gas.

This condensate is recovered and added to oil production to increase its quality.

World Finance: And you have extensive upgrades planned through to 2022?

Yuriy Rubin: Last year we installed a 3.6 million cubic metres per day gas processing facility, which allows us to recover LPG – liquefied petroleum gas, a common name for a propane-butane mix – which already started reaching the market. And when we increase capacity will be exported.

Next stage would be installing three additional gas processing units, which would allow us to separate ethane. We have very high content of ethane at our gas properties. Up to 13 percent of ethane. And that was the reason why we decided to consider a polymer plant.

Irkutsk polymer plant will have a capacity of 650,000 tonnes of polyethylene. There is a very big demand in this part of Asia – especially in China – for this product.

World Finance: You’ll be a new player coming into some busy markets; what’s your competitive advantage?

Yuriy Rubin: Our biggest competitive advantage is our proximity to the Chinese market, which is still the number one location in this part of the world.

Second would be our proximity to other Asian countries like Thailand, Vietnam, and other countries of south-eastern Asia.

Also we have cheap labour, cheap electricity, and the most important: cheap feedstock. So, we are ready for competition.

World Finance: You’re working your way up the hydrocarbons chain; do you have plans to monetise methane?

Yuriy Rubin: Sure. We studied almost all options available in the market, including production of fertilisers. But still the best would be of course production of electricity.

For instance, last year we were approached by many companies that were interested in mining crypto-currencies. That could be in general a very good solution for any stranded gas field, when you have no other means to monetise gas assets. So we are studying this option.

It doesn’t mean we will mine bitcoins – or any other cypto-currencies – ourselves! First of all we are a large oil company; it’s not our business. But when we see a gold rush, it’s so tempting to service those people who are participating in that gold rush.

World Finance: You are as you say, a large oil company; your oil production has also increased significantly over the last five years.

Yuriy Rubin: That’s right. Last year we produced almost 8.5 million tonnes – that’s quite a significant increase. Since our inception we’ve attained about 40 percent compound growth rate of oil production.

Unfortunately for next year it will be capped by the decision of Russia to join OPEC, and we might not increase our production as much as we desire or are capable of.

Last year we acquired several exploration blocks. It’s quite important for an oil company to grow its assets. And we hope that from exploration we will be able to maintain our production at least at the level of 2017, and hopefully bigger, especially when there will be no restrictions.

World Finance: Finally, how important to the region are all of these developments that you’re driving?

Yuriy Rubin: I would say it’s extremely important. Irkutsk Oil Company employs approximately 7,000 people, and many people in the Irkutsk region – not only families, but supplemental businesses – really depend on Irkutsk Oil Company.

Also we are registered in the Irkutsk region, and we pay local taxes. Last year over 10 percent of the regional budget was funded from taxes that Irkutsk Oil Company paid.

Also, Irkutsk Oil Company makes very big contribution in the social and economical life of the region. We support many activities, charitable organisations, and cultural events. We care about environmental issues a lot, and invest significantly into all activities related to protecting fragile Siberian nature.

World Finance: Yuriy, thank you very much.

Yuriy Rubin: Thank you.

Aristoteles levels playing field for investment into renewable energies

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Aristoteles is an innovative digital platform for managing renewable energy assets. Created by asset management company Kaiserwetter, it combines real-time performance data with predictive analytics and powerful risk management software. Kaiserwetter founder and CEO Hanno Schoklitsch explains that in order to achieve the goals of the Paris climate agreement, we need to substantially increase investments in renewable energy. Enter Aristoteles, which makes the technical and financial performance of energy assets more transparent to investors, and so enabling better risk management.

Are you ready to invest in renewable energy? Take the survey.

World Finance: Why did you create Aristoteles, what do you hope to achieve with the platform?

Hanno Schoklitsch: It’s all about how we can achieve the goals that we have set out in the Paris climate agreement. We are currently facing a little bit… lack of financing. And what we would like to provide to the market is really that we can convince capital to invest in renewable energies. So this is the basis and the ideas for Aristoteles.

World Finance: What’s the issue; what are the hurdles in the way of more investment in renewable energies?

Hanno Schoklitsch: In the end it’s all about minimising investment risk, and also maximising the returns, and creating highest transparency standards. And these three things we can achieve by using the data that we are generating out of the assets, and bringing into Aristoteles.

World Finance: How does Aristoteles actually achieve that? You have all these energy assets feeding data into the platform, what happens next?

Hanno Schoklitsch: Yeah, we are gathering the data, aggregating the data from each of the different power producing assets into Aristoteles. So getting all the technical data, and making there our analysis. We have an algorithm, you know, looking at if this is working at the highest possible levels, and having the biggest energy output. But the most important thing is what we are doing with the financial view, and with the financial data. And therefore we are concentrating ourselves as well, on how we can bring transparency and the insight to the investors on the financial side.

For example, if you would like to invest in a windfarm in Africa. And you are concerned about what’s going on with your capital that you have invested there. We are taking out the technical data, bringing it into the cloud, analysing the data there with our smart data analytics. And we are also taking all the financials, the accounting. And this way, of course we can see what we have on production level, what we have on revenues, and where the cash is finally. And even then, going further on, with predictive data simulation. These are next steps, where we’re out there: how can we predict the future from the data of the past?

So in the end, in such a way we can give transparency to the investors.

World Finance: And with that greater transparency you’ve created a level playing field to invest in renewable energies.

Hanno Schoklitsch: Yeah. What we would like to achieve is to give the investors the possibility to go for renewable energies. Put the money and the capital out there to achieve the goals of the Paris climate agreement. There’s no hurdle existing anymore not to exist in renewable energies. Go for it! Let’s go for the Paris climate goals, and we will achieve a great future.

World Finance: Hanno, thank you very much.

Hanno Schoklitsch: Thanks Paul.

BBVA Bancomer’s digital success launches the bank ahead of competition

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Technology is revolutionising the banking industry. Pressures from brand new, often unregulated competitors, and from greater than ever customer expectations, are pushing banks to accelerate their digital journey. For Head of Business Development Hugo Nájera, transforming the way BBVA Bancomer works is absolutely imperative. He explains how the bank is changing the customer experience: making banking simpler, more convenient, and providing more and more products and services with just one click.

Hugo Nájera: We really want to change and lead the transformation for the banking industry. And we’re doing that indeed. But you know, the change will happen. It is happening, with or without us.

World Finance: Bancomer’s mobile banking app is rated the best in the Mexican market. Embracing technology is creating new ways to engage with and serve the bank’s customers

Hugo Nájera: We are changing the customer experience. Hitting relevance and differentiation for the customer. We are not just allowing them to see their balance or do transactions. With us they can get a consumer loan in just one click. A credit card in just one click. A certificate for a loan or mortgage in just one click. You have access to our big product and service catalogue through the mobile device in just one click.

And it is not just for loans, but for accounts, insurance, and payroll payments.

The amazing quantity of data that we can keep and process is a great opportunity to transform the customer knowledge and relevant offer for the customer. And that’s the best use we can do with the technology. That’s the way we can bring the age of opportunity for everyone.

World Finance: And building that age of opportunity is paying dividends.

Hugo Nájera: First, we have five million digital customers; our next competitor has just half of this.

Second, during 2017Q4, digital sales have been reaching 30 percent of the total volume of sales in Bancomer. And that’s a huge number in an economy like Mexico.

And third: seven out of 10 people who decide a change in their payroll payments decide for us; for Bancomer. And 50 percent are through the mobile device. So, powerful indeed.

BAC Credomatic’s social strategy: Opening relationships vs closing deals

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BAC Credomatic recently consolidated its 11 different Facebook pages into a single profile for all its customers across Central America. José Manuel Páez explains that doing so makes the brand simpler and easier for customers and staff to understand, and communicate its key values: of being a likeable, relatable business that people can turn to when financial questions arise. We have two more videos about BAC Credomatic, about the regulatory challenges of innovating across six different jurisdictions, and the benefits of agile management.

World Finance: What benefits did this consolidation bring to your customers and to the company?

José Manuel Páez: I would say the main benefit to both is around simplicity of our brand. Instead of having multiple profiles delivering multiple messages, we have a single profile with a narrative that aligns to our brand pillars.

We want to be a brand that customers like, we want to be a brand that customers relate to. And we definitely want to be the brand that they turn to when financial questions arise.

World Finance: You have 1.5 million followers – that’s a lot of people who might turn to you when financial questions arise – so how does your social media team manage such a vast audience?

José Manuel Páez: Well we have specialised teams in each country but it’s not about the followers; it’s about how well we segment these customer audiences and actually deliver relevant messages to them.

We try to understand where the customer is in their life – if it’s time to go to college, or if it’s time to actually build a house, or get a car – and get that relevant message out there, on how BAC Credomatic can help them in that moment in their life.

World Finance: So what is your strategy for converting followers to customers?

José Manuel Páez: We give a lot of thought to the posts that we make and try to connect with our customers. Obviously we’re trying to convey our competitive advantage and present the benefits of banking with us. But what we’re getting at is to be able to get that natural path from where we are getting to know each other – and that’s the brand awareness – to when we decide to work together, and create that relationship. Because at the end, that’s what we really want at BAC Credomatic: to create long term, positive relationships.

World Finance: José, thank you very much.

José Manuel Páez: Thank you.

How agile methodology helps BAC Credomatic focus on its customers

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Everybody wants to be agile. José Manuel Páez certainly does; he’s responsible for the continuous improvement of BAC Credomatic’s digital financial services across its Central American client base. He explains how agile management is changing the culture at the bank, and how agile’s ideology of continuous feedback and iterative improvement is bringing BAC Credomatic closer to its customers than ever before. We have two more videos about BAC Credomatic, on the bank’s social media strategy for building relationships, and the regulatory challenges of innovating across six different jurisdictions.

World Finance: First, what benefits has agile methodology brought to your digital development?

José Manuel Páez: Well I would say that it’s definitely brought flexibility, and it’s forced us to prioritise. So before we used to work with large projects and rigid requirements; and now we just focus on what’s important in order to deliver a minimum viable product that actually reaches the market faster.

So it has helped our teams become highly motivated and more productive.

World Finance: How is this changing the culture at BAC Credomatic?

José Manuel Páez: For one, we stop thinking about projects, and we started thinking about deliverables. So, all the metrics and structures around projects have been changed. And since we’re focusing on adding value to the customer, it has actually promoted a can-do attitude. And it has really moved us towards becoming a more customer-centric organisation.

World Finance: How is your human resource function having to adapt to this new way of working?

José Manuel Páez: Agile is about having self-managed teams, and having different roles in them. So, HR has really played an important part in defining these roles around the product owner or the scrum master; roles that didn’t exist before. So, the compensation schemes, the career progression around these roles have had to be built.

I would say that the biggest impact that we’ve experienced, and will continue to experience in the future, is that the organisation becomes flatter.

World Finance: Ultimately it is all about improving things for your customers, so how do you make sure you get their feedback, and that you’re moving in the right direction?

José Manuel Páez: This is something that we’ve tried to institutionalise in all of our markets: user testing and user research. So, we go out there and talk to the client at least twice a week. And this has been great, because you can do it either with very low fidelity prototypes – it can be a sketch or just a drawing. Or more sophisticated, clickable prototypes – and that’s depending on the stage of advancement of that deliverable.

But at the end it’s about getting that feedback, and understanding how the customer perceives our products. And being able to change or improve them before they actually reach the market.

Becoming agile definitely implies a transformation in the way we work. And right now I feel that we are closer than ever to our customers, and we’re delivering top of the line experiences. So that is definitely the future for BAC Credomatic.

BAC Credomatic: ‘Technology advances faster than the regulators’

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BAC Credomatic provides financial services across Central America. José Manuel Páez is its chief digital officer – he’s responsible for providing customers with the simple and sophisticated digital services that we all now expect as standard. But modernising systems across multiple regulatory jurisdictions has its challenges. He discusses these, how the bank has had to work around them, and the ways that different teams have embraced digital innovation. We have two more videos about BAC Credomatic, on the benefits of agile management, and the bank’s social media strategy for building relationships.

World Finance: José, give me some examples of the hurdles you’ve had to jump as part of your digital transformation.

José Manuel Páez: Many of the hurdles have been around regulation; definitely technology advances faster than the regulators can legislate. And we still haven’t seen many of these regulations in place.

For example, I would love to see a click replace an actual physical signature; but until that happens we still need to formalise many of our products face-to-face.

I would say also around the cloud; the regulation isn’t clear on quite what we can store there. So, this kind of landscape is challenging for us – especially for a bank that operates in six different countries, and our competitive advantage is all about scaling at a regional level, and not necessarily a country level.

World Finance: Of course, all these challenges have to be overcome, because the demand – or the expectation, really – for digital services is so high today?

José Manuel Páez: Definitely; we’ve had to work around these hurdles. In a region like ours where maybe internet penetration’s not that high, banking penetration’s not that high either. So we focus on breaking those preconceptions around security, those preconceptions around accessibility, and around ease of use, in order to really deliver top of the line experiences that create value for our customers.

World Finance: You’re working on some fascinating cognitive analytics tools to deliver that value to your customers – especially with your risk and collections teams?

José Manuel Páez: Yes, they have really embraced the digital business. They’ve experimented with alternative channels and taken into account customers’ preferences.

What they tried, and it has worked, is: maybe for some people, an SMS is just enough in order for them to get the nudge to pay their credit card. Or: for other people a chatbot might work better in order to secure a payments agreement – and that’s for the people who might not want to tell their story to an agent.

World Finance: So, what else will you be working on over the next 12 months?

José Manuel Páez: Well we’re very excited about what’s coming up this year. For one we’re working on redesigning from scratch our mobile banking app. We’ve invested thousands of hours in user research and user testing to deliver a much improved mobile banking experience for our customers.

We’re also working on redesigning a lot of our digital experiences, and aligning the online and the mobile channels in order to really secure a simpler, more convenient, and more efficient way of banking for our customers.

Eurobank Ergasias digital solutions help Greeks regain trust in banks

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As the Greek economy slowly recovers, local banks have a lot of work to do. How to reduce the high percentage of non-performing loans, and recover a significant volume of deposits? Both, of course, while maintaining profitability. Iakovos Giannaklis, General Manager of Retail Banking for Eurobank Ergasias, discusses the challenges in the Greek banking industry today. Growing strength of depositors is helping cash return into the system, he says; and a three year digitalisation programme is creating the services and efficiencies that he hopes will make Eurobank the premier digital bank in Greece.

World Finance: Iakovos, the public lost a lot of trust in the banks – how have you been working to rebuild it?

Iakovos Giannaklis: At Eurobank, our goal is to focus on customer needs, while building trusted relationships with our clients. We want our customers to choose us, knowing they’ll find top quality services, along with access to digital solutions. We try to work and serve our customers through our corporate values: dynamism, cooperation, empathy, trust and innovation. Based on them, the bank supports customers’ difficulties on servicing their loans, addressing each case with social responsibility and respect.

Another very important factor of building trust is that we never stopped financing the companies that bank with us, as this is the time that the bank’s support is needed and valued the most.

World Finance: And how have these efforts helped you re-grow your deposits?

Iakovos Giannaklis: We see that slowly the increased trust of depositors helps the partial return of deposits into the system. For Eurobank, the design and launch of new products and services mainly focuses on creating the right context and infrastructure to support the bank’s current and future development in deposits.

Numerous actions were implemented in 2017. The enhancement of locality campaigns for our customers through our best in Greece loyalty programme, that cooperates with a large number of retailers. We increased considerably the number of salary earners and pensioners – a strong indication we’re becoming the bank of first choice to more clients.

We promoted the value of saving to young people, capitalising on the heritage of Hellenic Postbank. With cooperation of a large number of companies for their transactional needs, and many other initiatives through both the physical and digital channels led us to increase our market share on deposits for the first nine months of 2017, while the cost of deposits continued to decline.

World Finance: How have you enhanced your personal banking offering to compete for valuable affluent clients?

Iakovos Giannaklis: We need to mention that Eurobank Retail Banking was the first to present the personal banking service model before all other Greek banks. In 2017, our dedicated personal banking relationship managers served more than 100,000 affluent customers.

We’ve introduced an efficient and well-defined process that meets all their wealth management and transactional needs. Our service is compiled by features like tactical economic reports, exclusive products such as special deposit account, investment and insurance products, along with special services in travel and real estate. All that through a well-defined method that helps to identify banking products that cover their client needs.

Our goal is to provide the top class customer service at this market segment.

World Finance: And how are you innovating when it comes to business banking?

Iakovos Giannaklis: Small business banking has the market expertise and gives us a sectoral approach which allows us to establish solid relationships with high value customers and attract new ones. We support innovative enterprises, capitalising on European guarantee and financing programmes, through collaboration agreements with European institutions like EIF. We help small and medium enterprises that want to expand their activity abroad, with our electronic gate to global trade and business networking, exportgate.gr; recently enhanced with its participation in trade club alliance.

We’ve introduced a distinct customer service, client business support and consulting services, through the innovative CRM tool Business Checkup, a complete methodology addressing fully customers’ needs, through customised business proposals.

A series of other strategic choices have been made, like the launch of virtual banking service for the first time in Greece. This new service allows customers who are familiar with the use of internet banking to communicate via video conference, with their dedicated business banking relationship managers, and all that from the venue of their company, performing almost all kinds of interactions with the bank.

World Finance: Finally, what’s your digitisation strategy, moving forward?

Iakovos Giannaklis: Eurobank has made the strategic choice to embrace digital technology in a dynamic manner, and become the premier digital bank in Greece. We have launched a comprehensive three year digitalisation programme, with two primary pillars. Full digitalisation of the basic bank processes, to ensure absolute efficiency and the implementation of an omni-channel experience for our customers.

In 2017, we introduced tablets in all branches cashiers, in order to facilitate the signature procedure for transactions. An e-signature service that is prepared to expand so as to include the signature of contracts.

Regarding the Eurobank mobile app, which was launched in 2016, we presented a new set of innovative features aiming to facilitate our customers’ daily lives, and were awarded with many local and international awards.

We believe that through digital banking we are able to address our customers in a more sophisticated way. We can offer a unique customer experience via customer journeys, and at the same time we can increase revenues and profitability.

We have applied lean methodology in our processes, to ensure simplicity and less complexity for customers, along with reduced operating costs.

World Finance: Iakovos, thank you.

Iakovos Giannaklis: Thank you.