All banks have been undergoing some form of digital transformation in recent years to better operate and serve their customers.
The extent of the transformation varies from one bank to another depending on what is needed and ultimately the underlying ambition and vision of the bank.
For Santander Portugal, the vision they have for the bank they are building is very simple – to be the best digital bank with branches.
Susana Ferreira, the bank’s head of technology and operations, says the rationale behind the vision is to simply offer its customers the best of both worlds.
This means simultaneously combining a “best-in-class, fully digital experience that enables our customers to satisfy their financial needs anytime, anywhere and on their terms,” with an “ability to engage in a human interaction, whether remotely or physically at our branches, at their discretion,” she says.
We prioritize the well-being of all our customers, as not everyone is comfortable with using technology. At Santander we leave no one behind.”
Some of those situations, where customers are more comfortable speaking to someone in-person, include when customers are looking for advice on more complex, high value financial transactions, such as purchasing a mortgage or exploring investment opportunities.
“Our customers know that if they want to talk to one of our representatives, they can,” says Ferreira. “It is also important to remember that Santander is a universal bank, which means that we provide services to consumers of all ages, from 0 to 100. We prioritize the well-being of all our customers, as not everyone is comfortable with using technology. At Santander we leave no one behind.”
Having impact
There are several ways in which digital transformation can be judged. Two of the most important are the extent to which it has and is helping to grow a bank’s customer base, and customers’ digital engagement.
On both counts, Santander Portugal seems to be doing well.
“Santander in Portugal has continuously grown its active and loyal customer base in a sustainable manner over the past few years,” says Rui Constantino, chief economist at the bank, who puts this down to three key factors.
The first is the operational transformation the bank has undertaken, “with the simplification of processes and the progressive digitalization of the channels, enhancing the quality of service provided to customers,” he says.
The second is product simplification – aiming to provide financial products and services which better serve customer needs – and the third is focusing on “higher value customer segments, namely select or more affluent customers and businesses.”
The success of this approach is borne out in the numbers.
Last year, compared to the year before, the bank recorded 4% growth – equivalent to 70,000 new customers – in its active customer base, and 6% growth in its digital customers to about 1.2 million in total. Its digital customers now represent a high of 64% of its active customer base.
In addition, there were 914,000 average daily logins last year – up 17.8% on 2022 – some 9.8 million transactions in average per month, about 787,000 customers made digital payments, and 668,000 used the Santander OneApp.
Santander in Portugal has continuously grown its active and loyal customer base in a sustainable manner over the past few years
Supporting the rise in app usage is the upgrades and enhancements the bank has been making, including adding capabilities to top-up various services such as mobile phone or internet, adding a personal financial assistant, improving security, and providing some visibility to customers around their carbon footprint based on payments they have made.
The bank has similarly been enhancing its home banking platform, Netbanco, and its digital business banking channels, specifically the business app, App Santander Empresas.
Importantly, the growth momentum from last year has carried through to this year, according to Constantino. He says that in the first quarter the bank has been able to further grow its customer base, business volumes and profitability, and achieve a leading position in terms of its net promoter score.
A distinct approach
Success in digital transformation can be defined in different ways. Clearly, Santander is doing something right. But what?
“There was no secret recipe,” says Ferreira. However, she explains that there were two primary factors that were essential to its transformation.
The first was taking a pragmatic approach to determining which components to address.
“Rather than undertaking large, multi-year transformation programmes, we implemented a surgical approach that involved the careful selection of what was broken and needed to be fixed and what needed to be created to improve customer satisfaction, with a clear business case for each euro spent.”
The second was the capacity to execute by maintaining a laser-like focus and discipline on the results and timings to be achieved.
“This enabled us to achieve unparallel efficiency and profitability levels that are not only best-in-class, but also uncommon in the industry.”