2020 has been an incredibly tough year, as the Covid-19 pandemic brought the world to a standstill. The difficult operating environment makes this year’s winners in The Banker’s Bank of the Year Awards even more deserving of the Bracken trophy. Not only have they successfully managed the pressures of running their operations remotely, but have also taken care of their customers and staff, responding rapidly to their needs and stepping up support in these demanding times.

Our judges were impressed with the role banks played in delivering much needed government funding, as well as providing specific measures themselves.

What is clear from the hundreds of entries we received this year is that the investment which banks have been making in their digital transformation efforts have truly paid off and will continue to reap rewards in the years to come, in terms of lowering the cost to serve, improving customer experience and driving the financial inclusion agenda.

Global and Asia-Pacific

Woori Bank

In a region renowned for digital innovation, winning the award for Bank of the Year in Asia is no mean feat. To then take that success and win the overall global award demonstrates an institution that is at the forefront of international banking, from its digital capacity to its customer services. And, in this most remarkable of years, its response to the coronavirus pandemic. Woori Bank has demonstrated its capability in all of these spaces, and is a well-deserving winner of The Banker’s Bank of the Year global accolade. 

The South Korean banking sector has not had an easy time in recent years, as many financial institutions came under criticism for the sale of financial products which subsequently saw large losses. However, it is how an institution responds to a crisis that is the real test of character, and Woori Bank demonstrated that it was willing to learn from these mistakes and move forward. 

The bank’s employees agreed that institutional checks and balances should be set higher than those required by law in order to maintain the highest of standards. A zero-base innovation system was also introduced, which examined business systems across all divisions of the bank from beginning to end, and introduced multiple improvements to its operations. The bank’s stated aim is not to be the most profitable or fastest growing bank, but rather the most trusted by its customers. 

To strengthen its sanctions screening processes, in January 2020 Woori Bank introduced an artificial intelligence (AI)-integrated screening system. Working in combination with manual review processes, the bank looks to free up its reviewers to focus on the more technical aspects of their roles and eliminate manual processes, such as inputting data into the AI-driven screening system. 

Through implementing image recognition and text analysis software, the system has proven to be especially useful in monitoring and classifying a diverse range of shipping documents, for example. Based on the success of the system, Woori Bank filed a patent application on its new method of screening export and import shipping documents. 

As well as working to overhaul its operations, Woori Bank continued to focus on expanding its services for its customers. Recognising the changing expectations of its customers towards responsible environmental, social and governance (ESG) considerations, Woori became the first bank in South Korea to launch the Formosa Sustainability Bond with a $450m tranche. The final order book saw subscriptions from 54 institutions, valued at $1100m, which was 2.4 times oversubscribed. The facility saw $450m of floating rate notes issued with a five-year maturity, and variable interest rate of three-month Libor, plus a spread of 77 basis points. 

Funds raised from the bonds are invested into green and social projects. Specifically, they are focused on renewable energy, environmentally-friendly construction, financing socially-responsible companies, and housing finance for housing stability. 

Kwon Kwang-seok, CEO of Woori Bank, says the bank is working hard to adapt to a potentially difficult landscape in the months to come. “In preparedness of post-Covid-19, the bank is focused on transforming into a future-centric financial firm, and reinforcing digital business capabilities by actively incorporating new IT technologies, such as big data in entire internal processes, from product and service planning stage to customer marketing. In addition to the strong shock of the pandemic on the global financial market, we plan to establish a foundation for stable business management by enhancing our capabilities in risk and asset quality management,” he says. “We must also strive to prioritise ESG goals as we fulfil our environmental conservation and social responsibilities, as the world moves beyond its previous single-minded focus on economic value.”   

Western Europe

Intesa Sanpaolo

At a time when Europe’s banks are being hit hard by a range of unfavourable market forces, the prospects for many of the region’s lenders appear to be dim. Not so for the winner of the 2020 western Europe regional award, Intesa Sanpaolo. The Italian lender has bucked the trend by posting solid growth figures, while developing its business through acquisitions and investments in digital infrastructure. Following the completion of its deal with UBI Banca in 2020, Intesa Sanpaolo has bolstered its credentials as a European heavyweight. 

“Europe’s banks must prepare to face new competition, whether from the US, China or big tech,” says Carlo Messina, chief executive of Intesa Sanpaolo. “This will require solid capital, high efficiency and sustainable profitability. During the pandemic, through the integration of UBI Banca we created an Italian champion that can successfully compete at the European level. We crafted the combination to benefit the people, customers, shareholders and communities of both UBI and Intesa Sanpaolo.”

In the realm of technology, Intesa Sanpaolo signed a memorandum of understanding with Google, as well as Italy’s main telecommunications provider, TIM, in May 2020 to support the provision of Google’s cloud services through TIM’s data centres. The arrangement will see the development of two Google Cloud Regions, in Turin and Milan, designed to facilitate the digital transformation and expansion of the bank’s business. Among other benefits, the cloud regions will include a centre for artificial intelligence. The Google Cloud services will also be made available to other Italian companies looking to benefit from their offerings. In turn, this will help to digitise the country’s wider economy at a time when progress in this domain has become an essential component of economic growth. 

Meanwhile, the bank has emerged at the forefront of efforts to stimulate the green economy in Italy, by providing loans at reduced interest rates subject to environmental, social and governance performance indicators being met. “The green economy is a unique opportunity that can accelerate growth and create jobs. Italy could become a leader of the sustainable economy, just as it became a leader in global exports. We will do our part by providing €50bn to finance the European Green Deal,” says Mr Messina. 

Central and Eastern Europe

Raiffeisen Bank International 

When it comes to banking in central and eastern Europe, it’s difficult to look past Raiffeisen Bank International (RBI). The Austrian-headquartered financial giant presides over a business with a footprint across 13 markets in the region. And, in recent years, it is a business that has prospered as a result of an effective growth strategy, centred on digital transformation and a deep knowledge of regional markets accumulated over many years. 

In 2019, for instance, RBI posted a consolidated profit of €1.23bn marking the third consecutive year its consolidated profits exceeded the €1bn mark. Notably, this was achieved in a prevailing regional environment of lower interest rates and falling net interest margins.

“We support our corporate customers in their local and cross-border activities, offering tailored products based on our in-depth local and international industry expertise. Our success in retail banking is based on our long-term standing in and commitment to the region, resulting in excellent trust-figures in all countries we’re active in,” says RBI’s chief executive Johann Strobl. 

RBI’s loan growth across 2019 expanded by an impressive 13%, while adjusted net interest income and net fee and commission income were up by 8%. Its Tier 1 capital ratio also increased to 15.4% from 14.9% in 2018, while its non-performing loan ratio fell to 2.1% from 2.6% over the same period. 

That RBI is now enduring the fallout from the Covid-19 pandemic from a position of strength casts its medium-term outlook in a favourable light. Though the pandemic has hit the lender’s fortunes hard in 2020, with profitability suffering in particular, it is likely to benefit from an expected uptick in economic activity across the region in 2021. 

Indeed, the bank’s long-standing commitment to digital transformation is likely to pay off handsomely in the coming years. “RBI’s strategy is clearly focused on digitisation, innovation and customer orientation across all business segments, and the coronavirus crisis has proved us right. Many of our customers who were not digitally savvy before started using our digital services during the crisis and are very satisfied with them,” says Mr Strobl.  

Americas

Santander

Santander continues to be a leading name across Latin America. Its presence is noteworthy beyond the two markets for which it received The Banker’s country awards this year, namely Brazil and Argentina. Santander’s activity and approach to innovation should be commended elsewhere too. 

In Chile, Santander secured the highest number of digital clients among all private sector banks; while in Mexico, it became the first bank to appoint a woman as the chair of its board of directors – a milestone that should not go unnoticed in a country, and a region, that struggles with a wide gender gap. 

Santander’s success is often based on its ability to leverage on the ingenuity of the local workforce and introduce new products and services across other geographies – be it an innovative approach to physical branches or the creation of basic accounts that promote the use of digital products and improve financial inclusion.

“We have been deploying capital in North and South America – where we see our highest return-on-equity and profitable growth potential – in countries with young populations and low banking penetration,” notes Santander Group’s CEO José Antonio Álvarez. 

Even during this year’s Covid-19 crisis, the Americas contributed the most to the group’s profitability, accounting for 61% of underlying profit in the first nine months of 2020. Nearly 30% of attributable underlying profit came from Brazil alone. 

Looking ahead, the greatest source of growth – and contribution to local communities – will continue to derive from reaching the many Latin Americans that are still excluded from financial services, adds Mr Álvarez. 

“There are around 300 million unbanked and underbanked consumers in Latin America. By using digital solutions we can offer them access to financial services for the first time; our goal is to financially empower 10 million people in the coming years,” he says. 

“While the pandemic has impacted growth, in many of the region’s largest markets interest rates are at historic low levels, which is creating demand [for credit] as customers borrow to invest – particularly in Brazil and Mexico. This creates a significant structural growth opportunity for the region and we remain very well placed to support our customers and help them prosper.”  

Middle East

Emirates NBD

When Emirates NBD was formed in 2007 from the merger of National Bank of Dubai and Emirates Bank International, it wanted to be a regional champion. With a transformational acquisition under its belt and making impressive strides in digital banking, that is just what it is starting to look like.

The $2.7bn acquisition of DenizBank, Turkey’s ninth largest bank by Tier 1 capital and eighth largest by assets, in 2019 diversifies its business beyond the UAE in a meaningful way. It brings a presence not just in Turkey, where DenizBank has more than 740 branches, but also in Austria, Germany, Russia and Bahrain. 

Back in the Gulf, the deal has propelled Emirates NBD into third place among GCC banks ranked by assets. Last year, it became the second most profitable bank in the region. DenizBank had a strong first six months in 2020, which has helped Emirates NBD to enjoy strong year-on-year growth, in spite of current economic difficulties.

In its domestic market, savvy use of technology is bearing fruit. Its Liv digital lifestyle bank is the fastest growing bank in the UAE. New products and services include digital account opening via the mobile banking app. This lets customers open an account instantly by scanning their passport and Emirates identification. Alexa-powered voice banking now provides customers with access to account information in real time.

A state-of-the-art trade finance platform, smartTRADE, was launched last year, and a new single sign-in corporate platform, businessONLINE, is under development.

The bank’s subsidiary, Emirates NBD Capital or EmCap, continues to be a market leader in emerging market investment banking across its chosen products. It has been ranked first for GCC and UAE public offerings each year since 2016. The platform currently operates across the Middle East, Asia and Africa and has recently won a number of debt capital market mandates from Russia.

“Our long-term focus on digital banking has distinguished our efforts and enabled us to stay resilient and responsive to our customers’ needs,” says Shayne Nelson, group CEO of Emirates NBD. “As we look ahead, we aim to continue to support our stakeholders and contribute to the national effort towards a sustained economic recovery.”  

Africa

Ecobank

Ecobank is active in 33 African countries and claims a larger African footprint than any other bank in the world. Its goal is to deliver financial integration, economic development and financial inclusion across the continent, and it is going about it in an astute and diligent way.

The group is pursuing this objective via two important means – leveraging its digital platforms and building strategic partnerships. In the past 18 months it has entered into alliances with several mobile network operators, ‘big tech’ firms and fintechs. 

For example, an agreement with Airtel Africa allows users of Airtel Money to make online deposits and withdrawals, merchant payments, transfers and to access loan and savings products using the Ecobank system in select countries. Ecobank business customers can make bulk payments, such as payroll, directly into the mobile wallets of Airtel Money users.

Ecobank is now payment start-up PalmPay’s issuing bank for virtual Visa cards. PalmPay is a sister company of Transsion Holdings, Africa’s top-selling phone manufacturer. A deal with China’s Alipay lets its users make instant transfers with RapidTransfer, Ecobank’s remittance solution. The target here is the hundreds of thousands of diaspora Chinese in Africa.

Ecobank has also partnered with Google to provide educational webinars to its small and medium-sized enterprise (SME) customers. The idea is to help them raise their digital engagement and, with it, increase business growth. The solutions that they will be offered are Google My Business, a free promotion tool and paid-for Google Ads.

The group demonstrated its ability to access the international capital market, when it raised $500m with its inaugural eurobond, listed in London. Last year it saw its Tier 1 capital shrink by 7.2%; however, it increased its assets by 5.1% and its net profits by 13.4%. 

“We operate a ‘one bank’ model, through which we manufacture centrally and distribute locally,” explains Ade Ayeyemi, group CEO of Ecobank. “We are able to provide our digital platforms and ecosystem across our wide Africa footprint. This enables genuinely scalable and borderless solutions which deliver convenience and affordability to our retail, SME, corporate and public sector customers.”

Lockdowns have accelerated digitalisation across the continent, which should improve financial inclusion, Mr Ayeyemi added.  

Financial inclusion

Access Bank Ghana

Despite great strides being made toward financial inclusion, it is estimated that in 2017 only 37% of women in sub-Saharan Africa had access to formal financial services, compared with 48% of men, according to the most recent data from the World Bank.

Access Bank Ghana, with funding support from Mastercard and Oxford Policy Management, aims to bridge the gender gap in access to financial services with its Live B3ta group savings account. The account targets unbanked communities largely made up of women and youth in rural areas.

Ghana’s low-income rural population is particularly vulnerable to natural disasters and crime. Due to income seasonality, many are unable to access formal loans to cover large expenses, such as school and hospital fees. A lack of trust in the formal banking sector, fear of losing their savings to bank charges and financial illiteracy is widespread.

Live B3ta is designed to increase financial resilience within vulnerable communities by promoting a behavioural shift towards savings, micro-insurance and credit. It is a group savings account embedded with micro-insurance products and integrated with mobile money, which allows customers to do their banking remotely and make transactions without fees.

“The account has been able to provide a secure and safe way for the beneficiaries to keep their money and avoid the risk of losing their savings through theft and disasters. They have also benefited from financial literacy, capacity building and entrepreneurial training to help them grow their micro and small businesses to sustain their families,” says Olumide Olatunji, managing director, Access Bank Ghana.

To build trust, Access Bank partnered with local non-governmental organisations and recruited field agents within the targeted communities. The bank is in the process of rolling out an agency banking model to increase its outreach and provide a physical presence. More than 168 community groups have signed up to Live B3ta, with women making up 72% of the customer base. Access Bank’s target is to increase take-up of the account to 1200 community groups by 2021.

“With a key objective of reaching underserved and unbanked communities across the country, we are proud that Live B3ta is giving more people within this demographic access to financial services,” says Mr Olatunji.

Banking in the community

HSBC

The global workplace is rapidly changing. The spread of Covid-19 continues to disrupt lives and livelihoods, while the ever-increasing role of automation means that many of the jobs of today will disappear in the future.

To support opportunities provided by social innovators that help people become more employable and financially literate, HSBC partnered with Ashoka, a global network for social entrepreneurs, to launch the HSBC Future Skills Challenge.

Twelve initiatives were selected from more than 200 submissions received from across the world, with many of the entries coming from innovators aged under 35 and 45% were from women.

The winning social entrepreneurs developed long-term and sustainable solutions to tackle specific local problems. These included Coalfield Development, a not-for-profit organisation based in the US state of West Virginia, which provides sustainable jobs by supporting the economic transition of former US coal-mining communities. In South Africa, Use-It is increasing employment in the green economy by diverting waste from landfill to create useful products; while Comunidad4Uno helps low income and unbanked workers in Mexico gain access to financial services through its digital platform.

HSBC provided funding of up to $25,000 to each of the winning initiatives, alongside additional mentoring and a six-week business strategy course run by Ashoka. “At the end of the course, we offered each winner the opportunity to be matched with a mentor, from either HSBC or Ashoka, to work with over the course of three months to provide support on a specific focus area related to their business,” says Alison Coates, global head of future skills, sustainability, HSBC.

Since the conclusion of the challenge, more than 10,000 people worldwide are expected to have benefited. The winning entrepreneurs also had the opportunity to meet and collaborate virtually, creating a global network of social innovators empowering their communities to meet the challenges of the future.

“We are currently in the process of looking at whether we can run a challenge again and what it might look like. We were really encouraged by the success of the inaugural challenge, so we hope we can build on this success in 2021,” says Ms Coates.