The chairman of the World Savings and Retail Banking Institute shares his views on the role its members are playing in promoting sustainable and inclusive finance, as well as the economic and social well-being of their communities.
Q: What are the main challenges facing savings banks today?
A: The challenges of retail banks and savings banks continue to be relevant in a complex environment marked by rising inflation, market uncertainty, geopolitical tensions and social inequality. This context may have an impact on credit quality, especially in the face of a slower-than-expected recovery.
At the same time, we highlight the need to transition to a decarbonised economic model in which the banking sector has the role of guiding financing and investment flows towards the most sustainable companies, without impacting economic and financial stability or social imbalances.
I hope that the negative impact will give way to other transformational changes: the acceleration of the digitisation process and new consumer habits, the reconfiguration of international financial relations and the redesign of global supply chains, as well as the awareness that neither was inflation dead nor were interest rates pegged to the bottom forever.
Q: How can these banks best respond to such challenges?
A: The two basic principles that we want to make permanent are: to be rooted in the local communities in which we operate, and to act responsibly towards the global society as a whole and towards the people that comprise it.
For this reason, our members advance with the clear intention of promoting equality, and the economic and social well-being of their communities; promoting sustainable and inclusive finance with the help of digital tools; and maintaining trust and the highest quality in personalised service.
Q: How has the retail savings bank model changed in recent years?
A: The World Savings and Retail Banking Institute (WSBI) has associates in 65 countries around the world where there are different legal models and structures because of the different legislation and history of the banking sector in each jurisdiction. However, its entities share the same business approach characterised by the three ‘R’s: retail, committed to families and small and medium-sized enterprises; responsible, with a clear social commitment; and regional or rooted in the territory and devoted to the community.
In any case, there has been an adaptation to the new demands for digital services and a more demanding regulatory environment in all of these countries, which gives increasing importance to measuring the risks associated with sustainability and cyber security.
Q: What role have savings banks played during the Covid-19 pandemic?
A: WSBI entities have launched numerous initiatives to help society, focusing on the most vulnerable groups. Specifically, measures have been activated to provide liquidity and financing so that companies can overcome the difficulties arising from the critical situation: mortgage moratoriums for vulnerable people; the deferral of rent payments; the advance payment of pensions; and the collection of unemployment benefits. In addition, there have been developments of social and humanitarian actions to deal with Covid-19 that reach every corner of society, thanks to the capillarity of our branch network.
Q: What more can they do to increase financial inclusion?
A: One of the statutory objectives of this association is to promote a culture of savings and encourage financial inclusion. To this end, the entities have deployed measures linked to the promotion of financial culture, support for the most vulnerable and the fight against inequality. WSBI members are developing multiple financial education programmes and promoting philanthropic actions, whose priority is to help those most in need through a wide range of social and educational programmes. These WSBI credit entities have undertaken social welfare contributions of about €2.8bn annually.
WSBI members are developing multiple financial education programmes and promoting philanthropic actions
Q: What was the conclusion of the WSBI’s six-year Scale2Save programme?
A: During the six years of partnership with the Mastercard Foundation, Scale2Save partner banks in six African markets provided more than one million customers — low-income women, farmers, young people and the elderly — with an account where they can save money and make payments. It also offers the opportunity to actively engage in a wider range of services, to set money aside in a secure manner, to cater for unforeseen emergencies and shocks, and to invest in their small businesses and in the future of their children.
These results are particularly exciting, given that a large portion of the programme happened during the midst of the Covid-19 pandemic. The programme’s final impact assessment confirmed that savings are key for vulnerable people to build resilience: most programme customers who faced shocks, usually health-related and loss of income, were much better prepared to face these challenges thanks to their savings.
Q: What is the role of the physical branch in the digital era?
A: Our entities are characterised by their direct contact with the community, in which personalised attention is crucial. This attention can be carried out in different ways and must always be adapted to the client’s preferences, so that is why an omni-channel approach is the key. Physical offices are a vital component on which trust stands and are a direct service channel that allows us to complete the global support that we want to give our clients throughout their different stages and financial needs in life.
Q: What were the highlights for you during the July 7–8 congress in Paris?
A: First and foremost was the number and quality of the participants. We had almost 300 registered members and banking leaders from around the globe — something that exceeded our expectations, given the war in Ukraine, the pandemic and travel restrictions that were still in place. This great audience interacted a lot with our speakers and panellists and produced one of the most dynamic events I have ever experienced.
And of course, the messages this congress sent to the banking community worldwide are of paramount importance. We are aware of the multiple challenges ahead, but we are responsible, innovative and optimistic, ready to play a significant role in transforming the global financial system into a more human-driven and sustainable one.
Q: The congress approved the Paris 2022 Declaration, which calls on policy-makers to harmonise sustainable finance taxonomies. What is the importance of such a statement from the WSBI membership?
A: What we wanted to achieve with the Paris Declaration was a set of robust recommendations rather than a ‘wishful thinking’ document. We believe that our members have a key role to play in pursuing the implementation of these proposals. We need to harmonise different taxonomies, as the current model is anything but sustainable. We have to develop new principles that would drive a fair transition.
At the same time, we should always think globally, but act regionally, since our strength is being part of our local communities. I believe that our WSBI members are the most appropriate partners for such a global effort.
Q: What will the WSBI be focused on over the next few years?
A: Supporting and empowering people in need is engraved in our DNA, so we will continue to do so in 2023, with increased determination and concrete actions. We need important global stakeholders with social responsibility. Empowering local communities is vital for moving towards a fairer financial system and we will devote all of our energy to bring this a step closer.
We acknowledge the difficulties, but we know that our model is the one to follow. In this respect, we will further enhance our cross-regional and cross-continental thematic workflow, aiming to establish the WSBI as a transversal, cross-regional platform, serving as a strong link between our members and relevant international and regional stakeholders.
The World Savings and Retail Banking Institute (WSBI) is composed of 88 national associations, with more than 6,000 individual retail and savings banks from all over the world. On a consolidated basis, it had 1,7 billion customers, $16tn in assets and $11,4tn in deposits at the end of 2021. It also had almost 220,000 branches and 2.1 million employees.
