BANKs OF THE YEAR awards
BAC Credomatic strives for customer-centered innovation
BAC Credomatic faced a daunting challenge in March 2020, when the pandemic struck and it had to adapt to different lockdown policies across Central America where it has operated for more than six decades.
Panama shutdown hard and fast, while in Nicaragua, where it has its largest market share, the government kept most of the economy open during the initial phase of the crisis.
While the governments approached the crises differently, BAC Credomatic responded to the pandemic in the same uniform way it has responded to other crises over the years –customer-based innovation.
“For BAC Credomatic, re-inventing itself and constantly innovating is our priority,” said CEO Rodolfo Tabash. “We refocused our service channels and offered experiences that were practical and relevant for our Central American clients.”
The bank’s response to COVID-19 pandemic, and its efforts to maintain its status as the most profitable financial institutional in Central, as well as its leadership in the regional credit card business, helped secure its place as Bank of the Year - Central America and Bank of the Year - Panama.
Tabash said the bank not only responded to the crisis with digital services but used it to speed up a transformation that was already underway.
In 2019, the bank before the first in Central America to offer mobile payments with contact-less NFC technology. It added new digital options, allowing for accounts to be opened remotely, while also beefing up existing functions of its mobile app, including local currency transfers and inter-bank payments. The number of digital users increased by 19 percent in 2019 and continued to rise throughout the pandemic, with 51 percent of customer transactions now digital.
It launched Compra-Click, which allows small- and medium-sized enterprises (SMEs) to sell products on a single platform. Compra-Click was designed for small businesses that do not have the resources to host their own site for on-line sales.
“This solution was very well received during the pandemic, and has been used by more than 8,000 businesses. Use has tripled,” said Tabash.
Tabash said that while customers are pleased with new options that allow them to do their banking from home, BAC Credomatic knows innovation has been to be constant.
“The key to success is listening to customers and constantly monitoring digital interactions, making adjustments and improving the experience to make them simpler and more accessible,” he said.
The bank has also watched the bottom line, with a solid performance in the 12 months ending in June 2020. Net profits were up 3.4 percent, loans by 4.8 percent and deposits by 17.6 percent. Non-performing loans fell to 1.56 percent, the lowest in years.
Fitch Ratings, in a report from May 2020, stated that the bank has strong franchises in every country where it operates, and “exhibited consistent and adequate performance over the cycle while reaching a solid market position throughout the region.”
Panama represents the smallest market share for BAC Credomatic in the six countries where it operates, but the bank sees this more as a positive than a negative.
While Panama accounted for 24 percent of the bank’s loans at the end of 2019, that translated into a 6.6-percent share of total loans in Panama. In contrast, while Nicaragua represents 5 percent of the bank’s loans, BAC Credomatic has a 23.1-percent market share in that country.
Panama has the fewest number of branches and a smaller workforce than other operations in Central America. Tabash said these numbers should be considered an opportunity, because they represent room for expansion.
“The Panamanian market is highly competitive, but there are opportunities to grow our brand in an integrated way. We have a lot to offer and Panama will certainly know how to take advantage of this,” he said.
BAC Credomatic Panama remains the clear leader in the credit cards in the country and Tabash said that it saw slightly increase in loans after March 2020, when the pandemic hit Panama and the country closed tightly.
It has seen a slight drop in return on equity, which was 13.2 percent in June 2020, compared to 13.6 percent a year earlier. Return on assets was 1.5 percent this June, compared to 1.7 percent a year ago.
Tabash said that the bank’s actions during the pandemic were a sign of its commitment. It was the first bank to grant a payment moratorium to clients, doing so before the country enacted a moratorium law that will extend through mid-2021. It ramped up its customer-centered approach, working with corporate and individual customers to figure out the best way to deal with the ripple effects of the crisis.
“We have adjusting our policies in a timely and proactive way in order to best accompany our clients,” said Tabash.