Augmenting the strength of its employees, utilising the best technology and focusing strongly on private banking has allowed Banco Capital to rise to modern challenges
Amid the lingering international crisis in 2011, Ecuador, under a low GDP to debt ratio environment, was only the second country in South America to boast a high GDP growth rate, at 7.8 percent. This figure surpassed Peru (at seven percent) and Chile (6.3 percent) and was just below Argentina with nine percent. This growth was supported mainly by strong government investment and the revenue generated by high oil prices.
The financial industry in Ecuador showed significant dynamism, ranking as the third-fastest-growing sector in the non-oil activities of the Ecuadorian economy, a situation that is explained by a sound and prudent policy in the handling of both liquidity and solvency.
In this context, Banco Capital, in 2011, achieved important growth in all its business lines.
In December 2011 Banco Capital showed a 39 percent growth in its checking and savings accounts, as well as 32 percent growth in its time deposits, compared to December 2010. A comparative analysis with the average growth of the Ecuadorian financial system shows that Banco Capital is growing at a rate of speed greater than the system.
Overall, it grew at a rate of 24 percent above the average growth rate of the deposits in the system, and 12 percent on loans. The results show that the savings deposits growth rate of Banco Capital in 2011 was 74 percent, versus just 18 percent for the whole system; checking accounts grew by 163 percent (compared to eight percent in the system) and time deposits increased 30 percent versus 22 percent in the system.
Developing human talent
The impressive achievements made by Banco Capital were accomplished mainly by two factors: the strengthening of human talent with the reinforcement of the managerial staff, as well as significant investments in technology, with a clear objective of raising standards in customer service.
One of the great dilemmas of the financial business is the art of managing the tradeoff between building trust and seeking innovative processes. Trust is tied to the coherent and consistent management of risk taking by the bank against the money of depositors. Innovative processes give customers good financial returns, quality in services, access to new technologies and new opportunities to manage theirs assets.
Faced with this dilemma, Banco Capital’s philosophy is based on balancing three pillars. These pillars are human talent, technology and customer understanding. Based on this philosophy, the bank’s priority is to have a first-class team of professionals that are the key to the institution’s success. For this reason the bank entered into a process of specialised human talent management, aimed at strengthening its employee’s social skills and individual attitudes.
To achieve this goal the bank has hired senior professionals in the area of human talent, who are currently implementing strategies and tactics with modern management tools, allowing for a satisfactory development of each of its employees in their respective field of work within the organisation.
Core drivers of the system
Regarding the bank’s investments in technology, it should be noted that Banco Capital has a standing policy of maintaining its core banking system with the latest updates. Banco Capital’s core banking system is the T24 from the Swiss company Temenos: one of the most important banking core systems used worldwide, adopted by over 1,500 financial institutions in 125 countries. This platform is the backbone that will keep the bank at the forefront of business and technology development.
Banco Capital is also strengthening the bank’s online system by introducing new transactional services which will complement the value offer to the customers. Also this year, the bank will be introducing new lending technologies through expert models with automated workflows in order to optimise the timing and quality of the services provided to the clients.
For the bank, understanding the customer goes beyond analysing numbers and filling databases; it means generating long-term relationships based on identifying customer drivers and building actions focusing on the small details that make the difference on a day-to-day basis for its customers.
Becoming the nation’s best
Looking at Banco Capital’s business lines on the assets side, it plays an important role in the Ecuadorian automotive financing sector. The bank is among the top three underwriters of this product nationally. For the 2010-2011 period, Banco Capital was the fourth-fastest-growing Ecuadorian financial institution in regards to assets growth, with a 13.3 percent growth rate.
On the liability side, the bank’s strategy is to offer its customers options that give them financial security and personal service. To achieve this strategy, Banco Capital has a distinct segment of private banking. This segment maintains an effective service model, where the customer does not need to approach the bank to be able to conduct business with it. The bank’s value proposition includes several incentives that make the customer look at Banco Capital as the best bank in Ecuador for their investments.
Furthermore, the private banking segment constitutes over 80 percent of total deposits to the bank through a network of 10 offices nationwide. In the period 2010-2011, Banco Capital was the fourth-fastest-growing Ecuadorian financial institution in regards to liabilities with a 17.7 percent growth rate. These results reflect a cautious management line that protects the resources of its clients, and are reflected in the bank’s good risk rating, strong capital base, and adequate liquidity and solvency rates.
It is therefore no coincidence that in May 2010, in a special edition of Ekos magazine which ranked the Ecuadorian financial system, it was named as the highest-performing small bank in the country in terms of profitability, efficiency and low arrears.
The future of global banking
The Bank’s trajectory, motivation and structure allows it to compete in the private banking sector in a nontraditional way, breaking paradigms and opening niches to emerging or potential customers. The bank has a unique opportunity to present itself as an alternative, following the new trends in banking, emphasising its business model that is centered around service, understanding that success is to compete through differentiation, not price.
The bank’s strategy for the coming years is to maintain a steady growth focused on understanding customers’ needs, introducing specialised product lines and comprehensive services. Banco Capital’s main objective is to grow to three times its size in three years in the main lines of its balance sheet, with a vision to establish itself as a leading bank in the Ecuadorian financial market.
The bank is moving to a flexible business structure, modern and efficient, where technology and innovation enable it to provide easy and transparent products, and thus becoming an attractive choice to the market. Always looking to improve the quality of services and convenience for its customers, Banco Capital seeks the expansion of its network coverage nationwide by securing strategic alliances with third parties.
Banco Capital is a bank that has decided to relish the change in today’s volatile banking sector, knowing its own strengths and recognising opportunities. It is embracing a new banking model that works with communities, respecting both people and their environment.
The bank’s slogan is ‘impulso’, meaning ‘drive’. Drive to grow together with its customers both internal and external; drive to create a sustainable banking institution with social responsibility; drive to make sure its ideas do not remain static but move over time. It’s a path of knowledge, successes and opportunities and must be encouraged to develop strong relationships between banks and their customers.