The Ecuadorian private banking system has been undergoing a variety of changes. Since 2013 local authorities have strived to overhaul the sector and make it more profitable, transparent and sustainable. The Ecuador National Assembly is in the process of reviewing proposals that would institute a new monetary and financial code for the sector, that will pose many more challenges for banks – but can potentially make the industry much more resilient.
“During 2013, Ecuadorian private banks faced major challenges that forced the institutions to readdress the dynamic of continuous improvement to optimise efficiency, profitability and overall financial options that would allow them to achieve customer loyalty and attract new markets,” explains Luis Javier López, Executive President of Banco Capital. “Thus, Banco Capital has found itself constantly searching for mechanisms to generate steady growth over time, minimise risks and create new lines of business that it can offer its customers as a part of its comprehensive banking services.”
The growth in the productive credit, added to the national exchange of the Ecuadorian Production Matrix makes private banking an important player in the economy. It is important to stress how much the sector has grown and how much it supports small and medium businesses in Ecuador today; a market that has long offered many challenges for conventional banking and funding enterprises.
Efficiency and profitability
“Here at Banco Capital there is a vision to grow and redirect credit to new customer segments, such as small and medium enterprises,” says López. “By offering new lines of financing for working capital, automation of transactions and other services we can enable these businesses to be more efficient in their processes and focus on their core business of production, leaving in expert hands the financial and transactional management.”
In response to all the challenges and opportunities being faced by the investment banking industry in Ecuador, Banco Capital has been assessing some of its core strategies. “The strategic vision of the bank is to foster continued growth with efficiency and profitability,” says López. “This will be achieved by improving its competitive position and with long-term focus, so that value for its shareholders, customers and employees is generated, while contributing to the socio-economic development of the country.”
However, in order for the bank to achieve this vision, it will be required to improve its processes, according to López. So, a pivotal pillar of the bank’s recent development has included the creation of new products that meet the current needs of customers. The bank has also been developing an ambitious digital platform, which it hopes will help make interactions with clients more efficient for both sides.
“The technological platform of Banco Capital, T24, has been provided by one of the leading companies in the banking software industry, Temenos, present in 125 countries worldwide, ensuring a high level of efficiency in our processes,” explains López. “The bank has made significant investments to keep this platform updated as it strengthens the functional and technical structure, pushing us to the forefront in this field and ensuring that that the processing and security of our customers’ information is fast and secure.” This technology platform consolidates information systems, hence, its accessibility in terms of user profiles are reliable, accurate and complete. “There are strategic partnerships with other institutions to offer our customers other service channels, whose platforms are integrated within the security protocols of our system,” adds López.
Another one of the ambitious projects the bank has in the short term is to be able to issue its own credit card, with which it will offer its customers a more effective and flexible financing option. “The card will aggregate values that differ from the financial market and expand the bank’s range of products,” says López. “They are designed for easy handling and do not saturate the clients’ options, but allow easy and profitable financial management.”
Strategic planning
Strategic alliances between Banco Capital and other reputable institutions have been of utmost important to facilitate the access of services to customers; a long-term a goal that will help provide better services to customers that don’t require access to a physical office to conduct transactions, but create more options to meet clients’ requirements. “Options like Servipagos network has enabled Banco Capital to maintain adequate coverage for their customers while providing personalised attention through their advisers for business operations and investment,” explains the López. “Furthermore, the Bank has an efficient and secure electronic banking that meets the security requirements for transactions safely and quickly.”
The implementation of services such as electronic statements and SMS confirmations of transactions for both physical and electronic channels, have enabled customers to benefit from technological tools to provide safety and speedy information. Banco Capital is one of the only banking institutions in Ecuador to offer this vast array of services across its markets.
“The banks strives to constantly update it’s technological systems and software to ensure continuity and speed of service, making significant investments in its technology platform and strengthen its core banking that results in quality customer service,” says López. “Similarly, transaction monitoring and protection of information and communications mean the bank can offer its customers security in transactions and diagnosis of internal and external vulnerabilities; a service provided by an internationally recognised company, sparing no effort to have a modern and efficient banking system.”
Personalised service
Over the years Banco Capital has invested a significant amount of time and money in developing its human capital. By training its employees and developing their skills, the bank can ensure that their contribution will help achieve objectives and allow market differentiation. “Day by day the institutional values of loyalty are strengthened,” says López of his team. “Teamwork, honesty and transparency are vital to guarantee a strong structure where employees are constantly motivated and challenged. Developing the skills and abilities of each individual is not only great for the bank, but also personal development.”
During the past year, the bank maintained a risk rating of AA(-), assigned by the Socieded Calificadora de Riesgo, an entity authorised by the Superintendence of Banking and Insurance of Ecuador, which, “for a financial institution, is synonymous with good risk management and client security,” according to López.
“Emphasising proper management and standards of financial prudence – while facing new challenges that allow us to enter new niche markets and create new business lines – is vital to ensure the bank has sustained growth over time,” he says
“Comprehensive risk management of the institution is one of the fundamental pillars that allow Banco Capital to mitigate credit risk, liquidity, market and operational and reputational risks, with a proper balance between deposits and loans, trying always to decentralise the risk by diversifying our operations and stand,” says López.
It is, however, the personalised services offered by the bank that López believes has led to success over the years and will continue to do so in the future. “With more than 20 years of experience in the field of investment, Banco Capital has carved out an important segment of private banking with expert management consultants and personalised attention to investment clients. The bank has strengthened customer loyalty and is always looking to expand the business to have more satisfied customers without sacrificing quality of service.”
