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Digital transformation: Change in internal culture is the main challenge in banking

Since a little over four years ago, banking in Peru is going through a process of digital transformation, seeking to bring financial services closer to customers, taking advantage of available technologies.

In this sense, El Comercio together with Telefónica and Wayra organized the second edition of the CEO Summit Open Innovation forum with the purpose of exchanging experiences on the innovation process in the Peruvian financial system.

According to the main executives of the banks, one of the main challenges in the process of digital transformation is the change of culture within the organization, because the very turn of the financial business is linked to the application of a lot of regulation and protocols, which makes unfriendly innovation.

Alliances with fintech

Thus, the cultural problem ranges from resistance to change to risk creating another culture parallel to the existing one. For example, the Inter-American Finance Bank (Banbif) has opted to consider the alliance with financial technology firms (fintech) in its digital transformation. Juan Carlos Garcia, general manager of the entity, said that in his experience there was a bit of “arrogance” within the entity, due to the belief that fintech do not know as much as they are bankers. Also, because fintechs, unlike banks, are not subject to strict regulations.

“Cultural resistance also pointed to the lack of confidence and credibility” said García.

A no less different experience was experienced in Citibank, says María Eugenia González, general manager of the entity. According to the executive, although Citibank in the world is one of the companies that has been working on innovation for more than 10 years, compliance with regulations and protocols made innovation in the organization more complex.

Parallel cultures

Even when the institution is convinced the digital transformation is necessary to survive in the long term it is insufficient. According to Walter Bayly, general manager of the Credicorp holding, which controls Banco de Credito (BCP), Mibanco, Prima AFP and Pacífico Seguros, in the case of BCP, the entity created its innovation center as anchor for the transformation process . But he had to spend a lot of time to avoid generating two cultures, a product that the innovation center had other rules, budget and way of dressing their workers, such as shoes and jeans, while the rest of the entity had other Rules and dress was more formal.

Bayly said that the entity had to use tools to find an answer to this challenge:

“How spaces are generated in culture so that the organization can move forward in this process of transformation and this has to be well worked. We must recognize that there are tools that allow working in culture so that this is not an obstacle” he said.

But there are more challenges to face regarding the organizational culture in the process of digital transformation. According to Eduardo Torres Llosa, general manager of BBVA Continental, “creating a culture of entrepreneurship that allows progress with the transformation process is not easy. According to the executive to face resistance to change, people must be encouraged to feel empowered so that they can think about innovating.

Workers and decisions

“Before the process, the workers of the fourth or third line did not feel that they could make a decision or that what they said was done to them. Now, we are working on empowering them to work for projects, “said Torres Llosa, general manager of the entity.

The meeting was attended by the general managers of six of the country’s main financial institutions: Credicorp, BBVA Continental, Citibank, Interbank, Banco Pichincha and Banbif. Vinka Samohod, Vice President of Digital Transformation of Telefónica, was in charge of moderating two panels with the representatives of said entities.

Also published on Medium.

Published inStartups

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