Author: Ricardo Campos, CEO, ActivoBank
February 17, 2021
The COVID-19 pandemic arrived at a time when the Portuguese economic system was nonetheless recovering from the final financial disaster, creating appreciable instability in a few of the most delicate sectors of the economic system. Travel, transportation, eating places, inns, and wholesale and retail commerce have been all badly hit, affecting round 20 % of the work power and contracting GDP by four %.
The full financial impression of the pandemic will solely be felt in the coming years, almost definitely exacerbating current socio-economic inequalities. Young individuals and people with much less safe jobs will in all probability bear the brunt demographically whereas, in enterprise phrases, smaller corporations might be extra severely impacted than their bigger friends. There might be vital regional variations too. But there might be positives that come from this disaster. The pandemic has accelerated the digitisation of workplaces, forcing corporations comparable to ours to maneuver most of its staff to distant working.
Companies throughout the economic system are having to reinvent their enterprise fashions, and e-commerce and distant companies are rising sooner than ever earlier than. The Portuguese banking sector is in a stronger position than it was in earlier crises. Higher capital necessities and larger liquidity than in 2010–13 imply that the sector is extra resilient than it was then.
Also related is the indisputable fact that the present disaster isn’t immediately – to the monetary sector. As a end result, banks right now have been in a position to transfer shortly to assist the group with particular measures comparable to mortgage moratoriums for people and companies.
ActivoBank additionally waived bank card curiosity for three months. By serving to to mitigate the unfavourable results of the pandemic for clients and their staff, the banks are retaining the economic system as wholesome as doable, in order that corporations keep operational, jobs are retained and the monetary system retains flowing.
More than only a digital financial institution
ActivoBank is a digital financial institution for people, however not like most digital banks, it has a really extensive providing. In addition to primary banking amenities comparable to present accounts and bank cards, ActivoBank provides private and residential loans, insurance coverage insurance policies, financial savings accounts, funding merchandise, inventory buying and selling, funding funds and ETFs.
Furthermore, it has 16 branches positioned in main purchasing malls, giving it a footprint and a visibility not out there to digital-only banks. ActivoBank is dedicated to sustaining its bodily branches as we imagine they proceed to play an vital position in our relationship with our clients. Branch workers are nice at serving to even our most technologically conservative clients get extra snug with our digital instruments and study to understand their advantages. Launched in 2010, Activobank is owned by Millennium bcp, the largest non-public Portuguese banking group. At the finish of 2019 it had over 300,000 clients (nearly 100,000 of whom have been acquired in 2019), over €2bn in belongings and a constructive internet results of roughly €10m.
Carving a novel position
ActivoBank recognises the competitors from fintech on one facet and incumbent banks on the different and carves its distinctive position by differentiating itself from each. Fintechs began as mono-product attackers however they are transferring to turn out to be extra like banks as they add services to their portfolios. Incumbent banks, in the meantime, have elevated the tempo of their digital transformation to reply higher to the fintechs. ActivoBank has the better of each worlds, in a position to supply services to cater for most of our clients’ monetary wants.
We are a fintech by nature, an attacker in value and supply. But we additionally boast the width of supply, safety and belief of an incumbent financial institution as a result of we belong to the largest non-public monetary group in Portugal.
Its ‘phygital’ mannequin offers the visibility and reassurance of a bodily presence with the good thing about digital expertise and innovation. Digital banks and fintechs don’t at all times must compete. By working collectively and sharing data we will create even higher companies and merchandise for our clients. Our partnership with TransferWise is a case in level.
Instead of making an attempt to imitate what TransferWise has carried out so effectively – creating the functionality to make seamless transfers round the globe in nearly any foreign money – we partnered with them and included their capabilities into our app and website. In the course of we helped enhance their service, making it even simpler for clients to switch funds overseas by enabling them to take action immediately from their ActivoBank accounts.
I strongly imagine that is the approach in which smaller digital banks and fintechs can get collectively and work on nice options that may make them stronger and extra aggressive.
Adapting to succeed
During the pandemic, many department and name centre workers continued travelling to their administrative center whereas over half our staff shifted to distant working. To accommodate the wants of our workers, in addition to to answer a rise in demand for the name centre, we cut up our name centre group into six, with every group working in totally different places. It was vital for ActivoBank to indicate its clients that they will belief it to be at all times out there, on-line and offline. It wasn’t simply name centre utilization that went up. We noticed an increase in the variety of accounts opened by way of digital channels too, unsurprising provided that we have been the first financial institution to permit clients to open an account remotely.
ActivoBank has at all times relied on a technique of fixed digital transformation. It began as Banco7, the first telephone financial institution in Portugal, again in the 1990s. Then it was the first financial institution with a transactional web site in 2000, and in 2010 it launched the first transactional cell banking app in Portugal. In 2019, we went again to the drafting board, redesigning the app and launching a brand new model higher suited to the wants of our shoppers. Not solely can we problem ourselves, however we are additionally challenged by our clients, who need to work together with us in the quickest and most handy approach doable. As such, our IT groups are continuously enhancing our structure and infrastructure in order that we will reply to these challenges.
Most of the digital developments begin with a suggestion or a grievance from a buyer and are examined by our clients themselves. One of the weapons in our armoury is a state-of-the-art lab the place we invite clients and non-customers to check our ideas and concepts. With the help of a gaze-tracking system, we are in a position to analyse how customers work together with prototypes of our cell app and internet platform, giving us invaluable insights into the person expertise. As we develop these digital interfaces, we perceive that offering assist and assist is essential for the expertise. Not solely can we make investments in increasing our contact centre capabilities via chat and co-browsing, mixing the digital interface with human assist, however we additionally present digital assist via state-of-the-art bots.
A rising market
Almost 65 % of our shoppers use cell banking already and traits point out that this quantity will enhance. People are logging into the app extra incessantly too, every single day in comparison with a handful of occasions monthly. A giant draw for these each day customers are the inventory buying and selling companies and funding merchandise that ActivoBank provides, instruments that reward frequent engagement. Growing our buyer base is prime in order that we attain a big share of the market. Ever vital, nonetheless, is growing the variety of clients that use us as their essential financial institution. Fortunately, this determine is rising quick. We are additionally projecting a robust enhance in our share of pockets, as our clients use extra of our merchandise. Our development is projected to maneuver from a largely transactional buyer, one who makes funds and transfers, to a primary financial institution buyer who depends on us for their mortgage, private mortgage, investments and insurance coverage merchandise. We are rising in the order of 30–50 % in most areas, and we count on to proceed on that trajectory for the subsequent couple of years.
The pandemic can have lasting penalties for the approach we reside and work. Most banks have sped up the technique of enabling distant working, and the digitisation of society has gone into the next gear. E-commerce has grown incrementally, as have most different digital and distant companies. Digital banks comparable to ActivoBank are in pole position to benefit from this shift in society, serving to clients to entry their banking wherever and each time they want it.
Issues of belief and safety are extra vital than ever, as an increasing number of companies transfer on-line. Banks comparable to ActivoBank which have invested closely in this space, in phrases of each programs and workers coaching, might be finest positioned to capitalise on this motion. We have a number of groups that management and monitor our digital platforms, comparable to IT, authorized and compliance, all guaranteeing that security and privateness procedures are carried out in line with the suggestions and obligation of the European and nationwide regulatory our bodies.
The approach we responded throughout the pandemic can have helped bolster belief too – clients knew that they might depend on us via this tough interval. Going ahead, shoppers can count on the identical dedication as they’ve since day one: simplicity, transparency, innovation and belief.