We are excited about what One Cooperative Bank (One CB) can become. The Philippine cooperative sector has been waiting for this for years. We're excited to see how it will leapfrog into the future, but a culmination of dogged determination to put in place the necessary elements for serving co-op members better, and now a very important part of the putative vision to "let all coop flowers bloom."
The process of consolidating Metro South Cooperative Bank, Consolidated Cooperative Bank, and Bataan Cooperative Bank into a single entity, known as One Cooperative Bank, was initiated in 2013. Despite prolonged deliberations spanning several years, the three banks were unable to finalize the merger until 2020. Ultimately, the Bangko Sentral ng Pilipinas (BSP) granted its approval for the consolidation in June 2022. Subsequently, One CB commenced its operations on February 27, 2023.
We're studying best practices from many places. To absorb what is useful, and discard what is not. Then the rabbit hole brought us to Peru!
Banco de Crédito del Perú
Banco de Crédito del Perú (BCP) is the largest bank in Peru and has been in operation for over a century. In recent years, BCP has undergone a digital transformation that has helped it become the best bank in Peru.
BCP's digital transformation was focused on two goals: improving the customer experience and making its operations more efficient. BCP mapped out and implemented a digital transformation using new techniques and approaches, technology modernization, data and advanced analytics, and digital tools that are changing the way people work throughout the bank and the way customers interact with BCP.
BCP was founded on April 27, 1889, by a group of Peruvian businessmen led by Francisco Quirós and Manuel Candamo. It began operations as a credit institution with the primary goal of promoting economic development in Peru.
One of the most significant outcomes of BCP's digital transformation was the creation of Yape, a digital-payment mobile app that has improved financial inclusion in Peru. BCP built and launched Yape, which has been downloaded by more than 11 million users to date. More than two million users have opened their first bank accounts on the app, making it the third most-used app in Peru, behind only WhatsApp and Facebook. BCP has plans to turn Yape into a super app by expanding it to other daily activities.
BCP is the largest bank in Peru, with over 1,400 branches and 10,000 ATMs nationwide.
BCP also learned that it needs to not only bring new tech talent for growth but also upskill its current talent on new ways of working and latest technologies to deliver product and services faster in line with the technology vision. Additionally, BCP underestimated the cybersecurity capabilities it needed when it started its transformation journey. As it absorbed the magnitude of the risks, BCP shifted its focus to develop cyber risk capabilities and mitigate new risks in the digital age.
BCP was the first bank in Peru to offer a credit card, in 1960. It was the first bank in Peru to offer online banking, in 1998.
As it began to digitize journeys, BCP saw that new capabilities alone were not enough; it needed to re-engineer its culture. BCP created the concept of Samay, a Quechua word for soul, which refers to the new culture leaders hoped to create. Today, some 4000 employees—almost everyone outside of the salesforce—works in agile teams, making BCP feel more like a startup than a bank with more than a century of history.
BCP's digital transformation has helped it see market opportunities and customers in new ways. By focusing on improving the customer experience and making its operations more efficient, BCP has become the best bank in Peru. With Yape, BCP has improved financial inclusion in Peru, and it has plans to turn Yape into a super app by expanding it to other daily activities.
Bonus: Open Banking and Embedded Finance
Open Banking involves utilizing application programming interfaces (APIs) to simplify the exchange of customer banking information with third parties, often comprising tech startups or digital financial service providers.
Although this serves as the fundamental concept of Open Banking, there exist various iterations of this approach within the Asia-Pacific (APAC) region.
Embedded finance pertains to the incorporation of financial products within non-financial customer experiences, journeys, or platforms, all while sidestepping the necessity for a banking interface or physical visits to a bank branch.
This concept itself is not groundbreaking. Over the years, non-banking entities have provided financial services via private-label credit cards in retail outlets, supermarkets, and airlines. Other prevalent examples encompass financing for purchases at appliance stores and auto loans facilitated by dealerships. These arrangements function as conduits, enabling the banks that underpin them to connect with end consumers.
What lends intrigue to the next wave of embedded finance is its amalgamation of financial products into digital interfaces that users interact with daily.
The array of possibilities is vast: encompassing customer loyalty apps, digital wallets, accounting software, and shopping cart platforms, among other prospects.
