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✨ TheNTWK Quote ✨ by Luis Miguel Zapata

#47 TheNTWKTalk “Bancolombia Ecosystems”, by Luis Miguel Zapata, VicePresident of Digital Ecosystems at Bancolombia, in conversation with our CEO and Co-Founder, Marina Planas, and of course with our NTWKers!

TheNTWKTalk Summary

Luis Miguel Zapata is the Vice President at Ecosystems Bancolombia. This is currently the leading financial institution in Colombia and 150 years old, having operations in Guatemala, El Salvador, Panamá, Miami, … They have close to 25-30M customers and around 60% of their transactions happen through mobile apps.

According to Zapata, the value proposition or the purpose of the company is a great value for the entire society. That is why he describes it as “an ecosystem and not an egosystem”, which would mean creating and growing with others. Bancolombia creates value propositions around banking as a platform, integrating third parties to offer their products and services through their channels. Presently they are about to launch banking as a service.

Zapata has been through several departments in the brand, therefore has an integrated point of view of the company. During our latest TheNTWKTalks, he offered his expertise in several topics around the industry.

🎙How would you describe an ecosystem?

As we see it, an ecosystem is a comprehensive experience in which you could solve your needs in one channel, in one integrated experience. It could be a mobile app, a website, a physical experience, … But if you see digital transformation, it’s erasing the boundaries between frontiers.

We understand that the more digital, the fewer frontiers are within industries. Open banking is enabling us, financial institutions, to go beyond a financial vertical. So we’re creating business models around integrated experiences.

People don’t dream about mortgages or car loans. They dream about their home, their car, and being able to study. So how do you become an invisible bank that pre-approves mortgages, car loans, …? Two years ago we launched our housing marketplace and now we have become the third marketplace in Colombia around housing. Because we have traffic. We have close to 15M users in our apps. And that traffic is the one that we leverage to build ecosystems around mobility and around housing and day-to-day life.

🎙 A bank is a traditional structure. How has your journey been from starting this initiative based on platforms and ecosystems? What has been your biggest challenge?

Creating these new kinds of conversations in a bank has been a challenge. Once you’ve proved that going beyond our frontier, our very core brings more data, and customer engagement within our app or web channel, … the more you engage, the more data you get. The more data you get, the better risk scoring you get, and then you enable the core product of the bank. It’s all about enabling the core strategy. We’re still a bank and we’re still going to be a bank in the future. But we’re enabling new products and services that bring us more data to leverage our core products. And now we’re creating ecosystems around it.

Challenge is to create a new language, a new concept within a traditional organization. And being a leader is tougher because there are expectations around you.

🎙How do enlarged companies like yours investigate the issue of what customer problems are and how they keep changing? And how do you determine which of these problems you will prioritize to solve in your ecosystem?

CX is something that I’ve been very passionate about. In my team, we have close to a hundred CX, UX. For every kind of solution or major improvement, we go to the field. We ask customers, we do focus groups. They travel to the reality of the users, the consumers. And we bring it and debate around it.

It is true that not everything that we see on the field we will launch to the market. You have to see the common reality of the problem that has to be solved. What the small holes in the market are so that you can fill them.

The QR code is something that already existed five years ago. But what changed was the commercial strategy. And now QR codes are substituting cash.

🎙 More products and services mean more complication in the user journey, and the digital design of what you offer. How do you find a balance between this complication with the need of the customer to have it simpler?

It depends on which strategy you’re developing. Orchestrating in banking as a platform, in which the UX, the UI has to be simple, seamless, or participating in other ecosystems, banking as a service. It’s a different language.

In banking as a service, you need more insight into what the fintech, start-ups, and the market need. As well as helping the customer understand how we’re solving their problem. While in banking as a platform you’ll need more UX capability in terms of making it simple.

🎙 For traditional companies, we have a great number of metrics and KPIs to assess the performance of the business. But what about measuring the health of an ecosystem?

It comes with the previous challenge. It’s about a new language. If you talk to the financial unit, our CFO, we’re going to start measuring the cost of acquisitions, LTDs, and unit economics, …

If a unit economic is healthy, let’s see what happens. And we start evolving from MVPs to integrated experiences with financial services. So those new conversations, more start-up driven, are the ones that we measure. At the same time, we use traditional metrics too to measure banking success. Because we’re still aiming to enable or enhance the banking core products.

🎙 What are the achievements that you are most proud of?

Last week we archived 100M transactions in QR codes. We’re very proud of it. To see food carts in the street selling with QR codes, to see taxis selling their services of transportation with QR codes. We even see churches asking for donations with QR codes, with what we have done. It’s a closed loop for now, but in the near future, we’re going to launch integrated QR codes with other banks through blockchain.

And also in marketplaces. What we have done with “360”. Your own 360 mobility, your own 360 with housing, and your own 360 purchases. We now have more data points about our clients, so we can enrich their profiles. What they like, where they go, and the kind of customer they are. In an invisible way, you have whatever financial product that we have on those fronts of the marketplaces.

🎙 What do you bring to the table in terms of assets?

Bancolombia is the top remembered brand in Colombia and the brand with the best reputation. First, we have a strong brand in the country and there’s trust. So that trust is the one that we’re “lending” to the sellers, the builders, and car leaders, …

Secondly, there’s digital traffic. Each month we have close to 30-35M in our mobile app and with banking, we have 7M active users in the app. So once you invite somebody, as a banking platform business, you’re going to increase your customer rate.

And third, it’s customer based. 35M users is probably about 50% of the population in Colombia. Its customer is Colombia. So that’s what we bring to the table as a banking platform. When we’re part of a third-party ecosystem, what we bring to the table is technology and financial licenses.

🎙 The younger generations tend to evaluate their banks by considering factors such as their environmental impact and how they invest. What is your take on that?

For three years in a row, Bancolombia was the most stable bank in the world. We’re number 4 right now in terms of leadership. The ESG metrics of this bank are a top priority. We’re not going to lend to any kind of activity or industry that goes against the sustainability of our planet until 2025, or 2026. And we give extra incentives to the people who buy sustainable cars or houses.

So the top priority of this bank is to be a sustainable bank and to help the sustainability of society. And this is why I think that we have a close relationship with the younger population in terms of them wanting to work with us, wanting to be our client, because they know Bancolombia helps society and is concerned about the sustainability of this planet.

🎙 Could you share one lesson learned?

Believe in young talent. Colombia is producing a lot of IT developers, scientific analytical talent, UX, UI, CX. That’s a new language. That was a new language for the bank. 5-6 years ago it was all about your mathematical skills, whether you had a financial CFA, an engineering degree, … and that's it. Now, we hire a new type of talent.

I would say that the other lesson learned is creating architectures that are very easy to integrate with others. When you have legacies as we do, it’s very difficult to integrate with third parties. And if you want to build an ecosystem, and help others to create their own too, that’s a tough challenge. And this is not solved yet for us, because of those legacies.

One thing that we helped develop as a language and as a concept in the bank is that business and technology are not separated anymore. If you go back 10 years, the gap was huge. Now, we create together, we solve together, and we foresee new strategies together. That’s natural for start-ups, for fintech. But for traditional or incumbent banks, it’s not natural.

Written by Gisela Giralt


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