FULL FINANCIAL INCLUSION

Costa Rica 2019 | FINANCE | INTERVIEW

Banco Nacional aims to ensure greater financial inclusion by creating women entrepreneurs, introducing new digital platforms and services, and partnering with other financial institutions.

Gustavo Vargas
BIOGRAPHY
Gustavo Vargas is General Manager of the National Bank of Costa Rica. He is an executive with a long banking career of more than 26 years in Banco Nacional, with experience in risk measurement and management. He has been General Director of Finance, General Director of Risks, and Deputy General Manager of Risk and Credit. He is an economist by profession, graduated from the University of Costa Rica. He has a master’s degree in business administration from INCAE Business School and has participated in numerous courses and seminars for professional updating.

What is the role or responsibility of public financial institutions in Costa Rica?

Our main role is to promote the development of the country through several pillars, most importantly financial inclusion. We believe that greater financial inclusion promotes better development. We increase financial inclusion by favoring entrepreneurship through the system of financing and education for entrepreneurs. We have a specific program for businesswomen called “Banca BN Mujer," focused on creating women entrepreneurs. This initiative helps them create and develop ideas. Our entire commercial approach is about helping entrepreneurs and construction companies as well as the tourism and energy sectors achieve sustainability goals. Similarly, the bank also promotes electric vehicles, and every other aspect that is aligned with Costa Rica's transition away from coal. That is an idea that we are promoting to bring the country to zero emissions.

What is Banco Nacional's standing in terms of public brand perception and market share?

I believe that the association is a bank that is always there to help people and companies. We want to be a socially responsible bank. We want to make life easier for people and our customers through digital platforms that allow easier access and financial inclusion. We expect to offer all services, such as credit-card transactions as well as local and international transfers, on mobile devices to ensure greater financial inclusion. Over the recent past, Costa Rica has advanced significantly in terms of financial attitude. For comparison, 25% of GDP was processed through banks 20 years ago and at present, that has increased to 70% and moving forward, we want to reach 100%. We want to bank the entire economically active population and increase velocity without holding up the money, helping the economy to move and become more dynamic. That is our role and aspiration for the coming years.

How do you face the bureaucratic challenges of public banks in order to have digital services that are in competition with those of private banks?

Fortunately, technology has evolved to the point where there are relatively inexpensive applications in the cloud that can be acquired even with the process of contracting in an economical way. For example, changing the entire core was not needed, as the current system works well. We added other capabilities or applications. Then, there are apps that are connected, which means there is no need for a great technological investment in the database. That has evolved tremendously over the years. Therefore, the bank does not see it as a barrier but rather an opportunity to have business partners. For example, we recently developed an application for the farmer community that can charge credit cards through cellphones at farmers' markets, where buying several POS devices would not have been feasible.

How are you positioning yourselves to be the financial partner of large investment groups?

We are upgrading our services platforms to accommodate international clients, for example, by offering our website and documents in different languages. We are also strengthening BICSA, our international bank, to offer banking services regionally, and expand into new markets.

How are you planning to expand your corporate banking or investment banking portfolios?

We are highly interested in certain segments, such as industry, energy, services, and construction. Our target approach is not to be the only lender for big projects but to partner up with Banco de Costa Rica and other private banks. The bank's aim is to share the risk and support the country to participate in more projects.

Why should companies handle cash management products with Banco Nacional?

Notably, we have a local platform that is integrated with all the services, for example “SINPE Móvil," local cash management, and electronic handling, etc. In comparison, a foreign bank that is not in the local square does not have those connections or connectivity. As a result, our cash management products can be much more useful for individuals and families.