The Venezuelan economy is not without its fair share of problems, although the country is still home to a number of budding economic opportunities and enterprising business names. Widespread economic reforms look to offer the country the stimulus it needs and certain sectors are performing ahead of expectations, not least financial services, which has emerged as a major economic constituent and an example in how best to promote growth.
Despite being only 10 years since its establishment, Banco Nacional de Crédito (BNC) has become one of the country’s most stable and successful institutions, and in many ways represents a much broader progression in Venezuelan financial services. On its foundation in 2003 the bank had only three offices in Caracas, San Cristóbal and Valencia. However, skip forward to the present and at the end of 2013 the bank is the seventh largest of Venezuela’s commercial and universal private banks, as defined by the Venezuela banking regulator, SUDEBAN.
Offering a comprehensive range of products and services to its clients through a broad network of 162 branches and over 400 automated teller machines in over 50 cities and in 21 states, the bank is testament to the strength of Venezuela’s financial services sector. The success attained in the last decade and in a highly competitive market, is due to the bank’s extensive expertise, combined with a pursuit of constant innovation, attention to modern risk management guidelines, excellent service, and institutional policies aimed at generating growth.
What’s more, as a socially responsible institution, the bank fulfils an important social function by offering its support to the most vulnerable sectors of the social structure. BNC contributes to projects aimed at strengthening education, values, religion and family, improving the quality of life of children, adolescents and senior citizens, as well as serving as a fund raising vehicle through its branch network, to address serious health concerns.
Experienced management team
The bank’s senior management is renowned for its successful track record in the banking industry, and is represented by a strong and experienced board of directors and a cohesive group of shareholders. These foundations have contributed to the building of a successful business model based on close proximity with clients and the promotion of a commitment to the highest quality in delivering banking services. This is a commitment that can be seen in the results of 2014’s first quarter, which was one of the banks’ brightest in terms of growth and expansion. During the first quarter, BNC’s assets grew 17.54 percent, far beating the performance of Venezuela’s banking system at 11.21 percent and propelled by the expansion of the Gross Credit Portfolio, which increased 17.14 percent compared to the end of 2013 – higher than the 9.45 percent growth recorded by the national system. Client deposits also increased 19 percent; almost double that of the system’s 11.01 percent.
The combination of BNC’s financial solidity and responsible philosophy should be seen as an example for others in the industry in how best to achieve explosive growth in a market still experiencing growing pains (see Fig. 1). The bank’s growth during the first quarter of 2014 has been one of the most significant, healthy and reliable of any in the sector, and the bank’s non-performing loan index stood at 0.06 percent as of the end of March 2014,the lowest such index in the Venezuelan banking system. In addition, the ratio of non-performing loans in its portfolio has allowed BNC to attain the highest coverage of non-accrual loans in the country, at 2,724.97 percent.
Since its establishment, BNC has pursued a strategic goal to become a modern bank with nationwide coverage, and, in a bid to fulfil this goal, the bank has implemented an aggressive expansion plan. Its growing physical presence throughout the national territory has allowed it to increase its assets under management and enhance its participation in the market through its banking relationship officers, taking timely decisions to directly service its clients, and reach a market share of three percent as of March.
However, the institution’s progress is far from limited to traditional banking channels, and growth has also been achieved by way of unusual, modern channels of service: electronic banking and web platforms, along with the design of new products and automated services. The bank is the country’s seventh largest in terms of operating automated teller machines and has a number of commercial points of sale, a call centre renowned for its speed and excellent service, and an easy-to-use web platform with the highest security standards.
The bank has also experienced significant development on the international front in a country with strict foreign exchange controls and one that is highly dependent on imports. Its Curaçao branch, for example, has allowed BNC to participate in international business when supporting its clients in their foreign trade transactions, performing hard currency processes in accordance with current legislation, and in directing payments through the Regional Settlements System (“Sistema de Compensación Regional” – SUCRE) and ALADI agreements. For these purposes, the bank relies on a significant number of alliances and correspondent banks located in a number of major economic and financial centres worldwide.
Pushing the boundaries
After a decade of successful expansion, BNC has identified technological innovation as the route to solidifying its position in the market, optimising processes and raising awareness among the general public along the way. In addition to developing its own software, the bank has incurred significant expenses in technology and systems in order to bolster protection and security, as well as transactions, data and processing. In the Venezuelan market, technology has emerged as a crucial differentiator for those in the financial services industry, in particular among those looking to extend their reach into new markets.
For the custody of data related to clients and transactions, greater capacity and flexibility in data processing – and to assure the continuity of operations under crisis – BNC has built an information storage and processing site to replicate the bank’s Data Processing Center. These facilities adhere to the strictest anti-seismic standard, and data centres best practices according to the Telecommunications Industry Association (TIA) and provide redundant backup of transactions and protection from natural disasters, failures in the main systems and/or other potential challenges.
Throughout the course of the bank’s modernisation process and the development of alternative service channels, BNC has added several other options to its website, allowing the bank to broaden its range of available products and services, such as self-managed real time loan applications and traditional banking products and services. The website has also been optimised for use with tablets and smartphones, therein placing products and services within reach of customers regardless of their location, while maintaining tight controls throughout.
Taking into account the transformation of recent years, technological or otherwise, and the increasingly prevalent role of web applications and social networks in the lives of consumers, BNC has sought to make its presence known in this community. By maintaining an active presence on social media, BNC hopes to foster closer ties with clients through tools that might not necessarily constitute a key part of the traditional banking business, but are relevant, nonetheless, in current social dynamics.
By joining Twitter with the account @bnc_corporativo, the bank has been able to form close ties with the public and reinforce its ambition to offer personalised, efficient and timely services. The platform also allows BNC to not only promote its products and services, but announce the opening of new branches, special business hours, events and relevant information, security measures to avoid theft and fraud, as well as interacting directly with its clients and users addressing concerns or complaints.
Elsewhere, with the recent launch of its YouTube BNC Corporativo, the bank is promoting an information channel that includes tutorials to address frequently asked questions from clients relating to banking processes and transactions, as well as advertisements.
After a decade of pulsating growth, BNC is betting on technological innovation and expansion to consolidate its reputation in the market and bring more customers on board. Entering into its 11th year now, BNC’s goal moving forwards is to optimise its existing operations and accommodate for an ever-changing financial marketplace by building solid, safe and trustworthy relationships throughout.