Brian Porter is the president and chief executive officer of Scotiabank. With more than 40 years of experience in banking, he has established himself as one of the most respected executives in the global arena. Under his responsibility is a brand synonymous with value and trust with more than 2,000 offices in 50 countries.
Scotiabank, with around 99,000 employees, is the Canadian bank with the largest international presence and offers services to nearly 25 million customers in 50 countries in North, Central and South America, the Caribbean, Europe, the Middle East and Asia Pacific.
Porter agreed to an interview for elDinero newspaper, in which he tells how that third-largest financial institution in the world seeks to continue supporting global development. His vision regarding the Dominican economy is optimistic, recognizing the challenges it has in the global environment.
What is your opinion on the economic landscape in emerging markets and specifically in Latin America?
In short term there are several factors that add uncertainty and downside risk to the global economy, such as trade-war risks, and tightening global financial conditions. Countries with unstable fundamentals have been hit hard, whereas in the other hand Peru, Chile, Mexico and Colombia have generally fared well. There are a number of favourable factors that can attract global investors and, over time, earn the trust of investors even in turbulent times: institutionalized and credible macro-policy processes, robust pools of domestic savings which provide stable funding,
– Improved legal frameworks, the ability to finance locally, with a sustainable balance of payments.
What factors could you point out in the long term?
In long term, if you choose your markets carefully there is a real value proposition. We specifically look for: favorable demographics, prospects for additional financial market deepening, and strengthening fundamentals and institutions. We have carefully chosen markets and countries, selecting those that have the fundamentals to survive turbulence, and we are excited about where the Bank is going and growing.
Why did Scotiabank acquire Banco del Progreso?
The acquisition of Banco Dominicano del Progreso supports the Bank’s strategic decision to focus its Caribbean operations on core markets, with a US$330 million investment. The Dominican Republic has a growing economy with great opportunities in terms of providing access to banking services and an environment that supports development and investment: Scotiabank is proudly part of this economic and social structure and remains committed to its presence in this country, with an increased focus con growing its banking customer base to continue achieving greater scale.
This transaction increases Scotiabank’s presence in Dominican Republic to approximately 10% market share in total loans, making it the third largest private bank in the country & 4th including local government bank.
How is the integration process going? When does the Progreso brand disappear?
The integration process goes well. We are assuming those best practices of both banks aligned with our institutional strategy. The work teams execute the plans, evidencing an incredible capacity for mutual collaboration, commitment, quality and dedication on the part of our collaborators, who make us proud every day. Together we are strengthening Scotiabank for the benefit of our customers. At the end of the integration phase, only the Scotiabank brand will remain, which will continue to serve customers who have contracted products through Banco del Progreso, strengthening its presence with the support of more than 187 years of global experience.
What is your expectation with this acquisition?
We are writing a new chapter. We are preparing for a digital future.
What benefits will this acquisition bring to customers?
This union brings invaluable opportunities for our clients and allows access to better products and greater benefits; such as a better service experience through effective physical and digital channels.
We know that Scotiabank is investing in a new HUB in the Dominican Republic. Can you tell us more about this project and the new employment opportunities it will represent?
We are currently investing US $ 80 million in a new and modern Operations Center that we are building in the Zona Franca Las Americas Industrial Park, which will provide services to the region and represent more than 2,000 jobs. Our commitment to continue growing allows Scotiabank to consolidate its purpose of improving things. Develop better quality, innovation and efficiency standards.
What are the bank’s medium-term plans in the country? What other investments do you have in the portfolio?
In the next 5 years, we see the Bank growing strongly in Dominican Republic, reaching a market share between 10% – 12%, and a return on asset and equity aligned with the market, and, as a result, we want to be consolidated as the 3rd largest private bank in the country
What differentiates Scotiabank in the Dominican financial market?
Scotiabank Dominican Republic’s differentiators are our best-in-class technology and talent: Our technological expertise comes from the Bank’s local and global investment. The Bank promotes a high performance culture while hiring and retaining the best talent, strongly supporting diversity and inclusion, and leveraging its international network to train the future leaders of the organization.
We see a bank increasingly digitalized. Today, 48% of transactions are carried out outside the branches (web, mobile phones, contact center) and we want to reach 80% in the next 5 years. The branch network is switching from transactional services to a more advisory role.
How does Scotiabank protect its customers against cybersecurity?
The volume and sophistication of information security and cyberthreats is growing, and Scotiabank continues to invest significantly in expertise and technology. Rapid adoption of new digital technologies requires all actors in the financial system to manage these new risks. Unlike other countries, the Dominican Republic has not been a victim of cyber-attacks at a national or sectoral level. Nonetheless, the government has taken several preventive measures, such as the formulation of a National Cybersecurity Strategy and the creation of a Cybersecurity center for the banking system.
How can banks face future threats of cyberattacks?
Going forward, it is only through collaboration and sharing of best practices and information with peers that banks will be able to identify, contain and remediate cyber-attacks. We continue to invest in new technologies to strengthen authentication and authorization processes, enhanced security monitoring of third parties who provide services to the Bank, and additional staff to increase capacity to deal with increasing threat levels.
How do you see the application of new technologies in the Dominican financial market and how are users being integrated to be more receptive to these changes?
We are deploying new technologies such as new mobile app, intelligent atm’s, mobile wallet and the enhance cash management functionality to drive more customer activity through digital channels. Teams are focused on reinventing the customer experience including mobile-first experiences, driving digital adoption, omni-channel communications, digital marketing and sales. Our branches remain critically important, but their role is changing.
As our customers use more digital channels for day-to-day transactions and servicing, branch employees will consistently engage customers in higher value interactions and advice.
What are the plans to support SMEs more now that Scotiabank is bigger?
Micro, small and medium-sized companies are of great importance for our countries because they help boost economic growth, employment generation and the development of the regions where they are established. They require the necessary resources to be able to develop fully.
We have the mission of offering our clients financial solutions that contribute to improving the growth and profitability of their businesses. We are aware of the challenges presented by micro, small and medium entrepreneurs during the early stages of their business, so we offer them the flexibility they need to support them in their development.
What do your financial solutions offer?
Our solutions have properties, conditions and terms related to the characteristics and risks of each client. Companies in the cap of promotion can find in Scotiabank loan solutions adjusted to the current cycle of their company. It is like a tailored suit, leveraging on the current strengths of the company and anticipating potential risks that impact its continued growth and development.
Where is the export sector in the business plans of your financial institution?
We could say that the foundations of Scotiabank are linked to the export sector, since our beginnings in Halifax, Canada, we have promoted this segment, which has allowed us to develop excellent capabilities in international trade and commerce. Having products and services aimed at customers linked to the export business gives us a comparative advantage over our local competitors, so we have become allies of all those companies that seek to increase their productive capacity in the export sector, serving as an entity International trade facilitator.
How do you see your future relationships with the export sector?
It is of high interest for Scotiabank to continue strengthening our relations with this segment not only because of its great growth prospects due to the intrinsic nature of its operations as generators of solid currencies, but also to continue promoting the social and economic progress of the countries where we have presence. I particularly think that our global presence places us in a differentiating place to serve this market segment.
What is your opinion regarding the economic context in which the Dominican Republic operates?
Dominican Republic continues to lead the economic growth of the region as a result of its well diversified economy, despite a recent slowdown during 2019 from 7% to 5.5%.
What is the importance of focusing on the countries of the Pacific Alliance?
Within our strategic footprint, we have a particular focus on Canada, the U.S., and the countries that make up the Pacific Alliance trading block, which are: Mexico, Peru, Chile and Colombia. 85% of the Bank’s earnings come from these 6 countries. Our PAC markets have positive business environments and outlooks. The economic, social and cultural transformation taking place across these regions are significant and are presenting businesses, such as Scotiabank, with enormous growth opportunities.
What plans do you have in this region?
We will continue to invest in our operations across the Pacific Alliance and we remain confident that our international footprint is a strategic differentiator for the Bank. We must highlight the statistics: strong GDP (3.2% on average); positive demographic trends-PAC markets have a combined population of over 230 million. They have young populations, with a median age of 29 years old, providing favorable demographics for growth in banking services; good economic growth, low consumer indebtedness and stable banking systems, high transparency and human development rankings; diversified trade-manufacturing is the largest source of exports for the PAC region at 64%, followed by food items (11%), metals (10%) and fuels (9%).
What about the new acquisitions in LATAM?
Over the last 4 years, the Bank has exited 19 countries and redeployed approximately $ 4 billion of capital into acquisitions which have increased the Bank’s scale and market share in key markets. Our sharper geographic focus allows us to drive sustainable earnings growth in these key markets, improve earnings quality and the customer experience while reducing risk. Since 2005, we have successfully integrated more than 30 businesses, worth approximately $ 10 billion, that are driving strong returns for our shareholders. The common element to these transactions has been strategically important geographies and business – most notably the Personal and Commercial business in key Pacific Alliance Markets, and our Wealth & Asset Management business in Canada.
Could you give an example of results with these acquisitions?
A good example is our acquisition of BBVA Chile, which doubled our market share in the country, and made us the 3rd largest private bank, up from number 5 at the beginning of the year. Since the transaction closed, we continue finding considerable synergies and creating real value for our customers in Chile and our shareholders.