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HomeLatest NewsSantander digitizes retail banking to reach 200 million customers

Santander digitizes retail banking to reach 200 million customers

Date: February 23, 2024 Time: 12:07:02

Banco Santander held its Investor Day on February 28, the first with Héctor Grisi as the new CEO. In the meeting that the entity held with large investors, the first brushstrokes were already given about what it wanted the bank to be in the future: a set of global businesses whose products are then sold adapted to the banking culture of each country. An objective that had already been put into practice through Pagos, with PagoNxt (led by Javier San Félix) and Global Cards (led by Matías Sánchez), Corporate & Investment Banking, managed by José M. Linares and Wealth Management & Insurance, Directed by Víctor Matarranz. Now it incorporates two new ones: Consumption, headed by José Luis de Mora, and Retail, led by Daniel Barriuso

Precisely during his intervention, Grisi insisted on the need to advance in global businesses to increase the profitability of local banks, which would allow Banco Santander, in the words of the Mexican banker, to meet the objective of becoming the most profitable bank in each local market. But without leaving anything to improvisation, since Banco Santander already applies it in CIB, its investment banking arm, and in the area of ​​asset management and private banking. And this will allow us to achieve the profitability objectives set at the Investor Day with a ROTE (return on tangible equity) of between 15-17 for the period 2023-2025.

From the entity they explain that the key will be the use of technology. In fact, it is not something exclusive to the entity chaired by Ana Botín, but it is true that the bank is putting a lot of focus on it with the hiring of workers with a technological profile. Thus, bank sources explain that this new, more technological approach will allow them to advance in cost optimization, increase the digital customer base and 100% digital experiences through products and services linked to new technologies that local units will put the sale. This is important, because with costs growing at the rate of inflation and with an efficiency goal of 42%, the technological processes will be fundamental to meet it, without the bank having to opt for other ways to reduce costs.

More technological retail

Regarding the retail area, Banco Santander focuses on creating a retail business unit, which, after all, is the bank’s main business, which means giving priority to the bank’s core business. In other words, it will reduce the importance of countries, which may be in a different moment from an economic point of view, and will allow the market to offer a more complete vision of the evolution of the income statement of each of the areas. And all aimed at achieving more than 200 million clients at the group level, from the 163 it currently has, in just over two years.

In this sense, a more technological profile has been chosen to direct it, such as Barriuso, who until now was ‘transformation director’ of Banco Santander. The manager will be in charge of simplifying products, automating processes and developing shared technology. Here the model that the entity will apply will be 80% global and 20% local, since it will depend on the commercial strategy that the bank wants to develop in each country, the price mix, the regulation or the objectives of the entity. As for the risks, at a time of economic slowdown due to the rise in interest rates by central banks, they will depend on each country.

However, the group will adapt the way it reports financial results to the new model starting in January 2024, when it will be fully implemented, given that the five global businesses will become the group’s main segments. To facilitate comparisons and year-on-year analysis, the bank has indicated that it will publish information adapted to the new segments before the announcement. Likewise, the group will continue to offer detailed information on countries and regions.

This is fundamental, since analysts consider that there are countries where the country risk may be different or may be influenced by the exchange rate. Despite this structure, which was already known, analysts will wait until the beginning of the year to evaluate it, since they consider that it may cause confusion.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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