Spanish
Past event
REPORT
On Wednesday, January 25, ESADE hosted a talk by Victor Matarranz, managing director of strategy and presidency at the Santander group, who discussed many interesting issues and offered an insight into how an outstanding, global bank like Santander deals with the challenges posed by an industry characterised by the emergence of new digital consumers and new players creating flexible, new business models.
These consumers and players all pose a variety of great challenges for traditional big companies. This scenario obliges traditional entities to restructure themselves in order to cope. But how do they face these challenges? How does the Santander group deal with change in this new scenario?
Victor outlined the four main factors to be taken into account when tackling these new challenges:
- Shift in customer expectations. When dealing with their bank (on a frequent basis due to mobile banking), customers now expect the same user experience provided by companies created in the digital age.
- The onset of new technologies enabling more and better services at a lower cost per transaction. This is an opportunity, but also a threat because it encourages new hi-tech competitors to enter the industry, mainly fintechs that compete with banks in certain business areas and affect the current revenue structure.
- The changing and increasingly tough regulations on capital, security, transparency, etc, that govern well established banks contrast sharply with the few obligations imposed on new competitors which focus mainly on business areas in which customer experience is negative.
- Last but not least, the challenge posed by today’s low interest rates, high volatility and low global growth at the macro level.
In view of these threats, Victor Matarranz stressed the importance of highlighting the bank’s strengths and using them to make the bank stand out.
When tackling the challenge that digitalisation poses to a global company, it is important to bear in mind the diversity and cultural sensitivities of each market in which global entities operate (the Santander group is the leader of most of the 11 markets in which it operates).
Taking into account the differences in each market and their local peculiarities, Victor emphasized the importance of each country being autonomous and their ability to spearhead all the implementation power underpinned by the transversality of their core business to broaden the reach of the best practices pinpointed. ''This allows us to get to know our customers and ensure local leadership, whilst exploiting the benefits of being a group'', said Victor Matarranz.
''Thanks to all this,'' he added, ''the Santander group is trusted by its customers to guide them throughout their lives in the most intense business relationship of their lives.''
He also reminded the audience that banking is based on the changes in time, ''when you are young and need most money is precisely when you have the least money.'' In this respect, banks provide financial services that help bridge the gap between customers’ personal projects and their own purchasing power.
As a result, Victor declared, ''a well-rounded relationship with a customer is very valuable'' but not possible if the financial relationship with a customer is carved up and only a small part of their life is visible. This may explain why, despite the significant number of fintechs, only a few have a significant impact on the industry.
Víctor appreciates the advantage of knowing customers well and winning their trust, and knows that the group’s future evolution will depend on its ability to transform itself into a platform for financial services offering excellent customer service, a platform that customers can interact with as they like and find financial solutions throughout their life, in other words, its ability to be more than merely a bank.
To address this change, it is necessary to focus intently on corporate values and be perceived by customers as ''a straightforward, personal and fair bank'' whilst working on adjusting in-house skills in order to maintain the strength and solidity of a large bank and competing with the agility and flexibility of a start-up like ''a great ocean-going liner with speedboats to reach new places.''
With this in mind, he explained, the Santander group has developed specific units that enable the group to experiment with new ways of doing business such as Openbank in Spain, or ways of working closer and more openly with fintechs.
He also touched upon issues related to organizational culture and new talent, and the need to foster in-house in order to deal with this new phase. He emphasised the efforts his bank is making to project this change both inside and outside the group to ensure it keeps pace with today’s new scenario and continues to channel its efforts into remaining a leader in global banking.
See you there!
For further information:
guillermo.angulo@esade.edu