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Western EuropeApril 1 2007

Banesto: a guinea pig for new ideas

Banesto is 89% owned by Santander and is run as a quasi-autonomous entity. Banesto’s small size relative to its parent ensures that it can be used as “a trial bank or a laboratory” for new technology and as a business model, which (if successful) can then be implemented across the group, chairman Ana Patricia Botín, told The Banker in a past interview.
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That scenario has not changed. As a result, Banesto has the Partenon core system plus the user-friendly Alhambra portal architecture. Santander branches do not have the latter yet.

José María Suárez, the director of a Banesto branch in Madrid’s upscale Barrio de Salamanca (where six of the eight staff work in sales), showed The Banker the system. What stood out was how easy it was to see and understand the huge amount of information pertaining to a customer, unlike many customer relationship management systems.

For instance a 48-year old Estrella (star) client, one of seven customer segments, had €508,000 in assets, with nine out of 10 of his financial needs covered by the bank – the only one missing was home insurance. His behavioural patterns were apparent from his credit card spend, divided into categories from toys to restaurants and travel. The yield on this client was 1.88%.

Another client had a treasury bond coming due and the bank was going to contact him to suggest how he could re-invest the funds and at the same time convince him to have more of his direct debits channelled through the bank. With only his electricity bill going through, his attachment to the bank was not perceived as strong enough.

Among other things, Banesto staff bonuses are affected by unresolved complaints and client satisfaction measurements.

Banesto’s cost-income ratio fell 90 basis points in 2006 to 48.21%, according to The Banker, as it opened 141 branches. In 2007, it should continue falling as it opens another 156, says José María Fuster, managing director for technology and operations at Santander. That would put paid to the idea that lowering a cost/income ratio can mean a lack of investment.

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