BANKs OF THE YEAR awards
Peru’s Interbank thinks outside the box
Interbank took its track record for innovation to a new level when Peru’s government implemented one of the longest and harshest lockdowns in the region in an effort to confront the COVID-19 pandemic.
The bank responded with programs, that at the end of June, resulted in 31.4% of its portfolio of retail and commercial loans being rescheduled. At the same time, it managed to grow deposits by 25% while loans increased by 19. At the same time, non-performing loans declined slightly to 2.4%.
This is only part of the story. It added products for retail and corporate customers, and worked with the government to expand its e-wallet so that millions of Peruvians outside the financial system could receive the state’s stimulus payments. A full 74% of customers now interact digitally with the bank.
Its creativity and capacity to think outside the box earned it our Bank of the Year award for Peru.
“We believe that the best way to have an impact in the society is through creativity and offering innovative products that allow customers to achieve their goals and aspirations,” said CEO Luis Felipe Castellanos.
Interbank’s in-house innovation laboratory, Labentana, has been launching new products for years. The pandemic created new needs and as a result the bank created a new tool, called “business account,” which allows micro-entrepreneurs and small-business owners to open accounts and start using them immediately.
“This is something new in the Peruvian market and it grew exponentially during the pandemic, when these companies needed an account to have access to government programs or receive digital payments,” said Castellanos.
It also revamped its “piggy bank” program that allows customers to earmark savings for specific purposes. People can designate cash for a trip or a special purpose. The bank added a window for health care with the pandemic in mind. Money set aside in a piggy bank brings a slightly better interest rate and customers do not immediately see the amount they have in each category to avoid temptation.
“A tradition in Peru is for people to save money in the envelopes that they then hide in a drawer. The envelopes would be named –my trip, kid education – and taken out when needed. We are doing this in a safer way for them,” said Castellanos.
Tunki, Interbank’s e-wallet, had been gaining ground, but it took off during the pandemic when Peruvians began lining up at banks to receive stimulus payments. The bank moved into high gear, working with the government to make Tunki accessible to any Peruvian who wanted to receive the payment electronically. It is the only e-wallet used for payments.
Castellanos said the pandemic, while devastating on many levels, could help Peru boost overall financial inclusion. Peru has the lowest level of financial inclusion in South America, according to the World Bank’s Global Findex Database, but the country’s response to the pandemic is changing that.
“The changes in attitude toward digital adoption will allow for greater financial inclusion,” he said.