world finance

A digital transformation is taking place in Andorra

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Author: Ignasi Martín Morales, Chief Client Officer, MoraBanc


December 22, 2021

It was Philip Kotler, the father of modern marketing, who observed that the adoption of new technologies alone cannot transform an organization. Add a lot of new tech to an old organization and all you get is an old organization that costs a lot more to run. If it’s real transformation you want, then new technologies are just one piece of the puzzle.

MoraBanc is an old organization. Today one of the largest banking groups in the European principality of Andorra, it dates back to 1938, when its founder, Bonaventura Mora, opened the exchange bureau Comptoir Andorran de Change.

In 1952, it became a bank proper, part of a nascent banking sector that grew up in response to Andorra’s changing fortunes in the wake of the Second World War. There have been plenty of changes at MoraBanc in the nearly 70 years since it became a bank but those of the last six – heralding the organization’s transition to digital – have been arguably the most significant.

Digital transformation – a process that began six years ago when MoraBanc successfully implemented a technological platform to revolutionise client relations in Andorra, and continues today – has never been about adopting new technologies alone. It is about leveraging these new technologies to transform business models, the client experience, operational processes, organizational culture and the way teams are led. Digital transformation is about much more than technology.

People are the key
You can incorporate new technologies, from big data to artificial intelligence to cloud computing – but unless they are used effectively by people with the talent to develop them, people ready to prioritise client experience, true transformation will remain elusive.

In the turbulent world of modern finance, banks cannot afford to ignore digital transformation in its broad sense, incorporating not just technology and processes but business models, new markets and client experience. People, of course, are central to every one of these. There is no room for complacency in the competitive world of Andorran banking – those who cannot adapt will be left behind. Banks must adapt to clients’ needs, demands and expectations in an environment that is volatile, uncertain, complex and ambiguous. It is a difficult journey, but one full of opportunities for those organizations able to use the full potential of digital environments, creating differentiated value propositions and seeking alliances with new players, from fintech to proptech.

Real differential value will be found in the people who understand what digital is and are able to anticipate clients’ new needs

Banks must shift from being mere providers of traditional financial services to taking on a much more relevant role in their clients’ daily lives. They must lead a strategy focused on client engagement and loyalty through digital ecosystems far beyond financial products, in a context of ongoing personalized interaction.

There are many challenges that financial institutions have to face in order to digitally transform themselves. Agility is key and this can be achieved by implementing a digital culture internally, one led by a management team that drives this change through the acquisition of new digital skills and agile ways of working.

New technologies must be incorporated as a key strategic element – this technology must go far beyond simple business support and enable new digital business models to be defined. It can’t be done without acquiring new digital talent, bringing entrepreneurs and those passionate about the digital world into the organisational fold. This is because the real differential value will be found in the people who understand what digital is and are able to anticipate clients’ new needs and consumption habits.

The challenge of change
Banks will have to explore the frontiers of their business and redefine themselves, seeking new digital business models that generate new sources of income and increase their profitability. This is everything from the monetization of client knowledge to offering digital non-banking services to creating open technology platforms.

At the same time, banks must increase the productivity of their existing digital channels: this isn’t just about keeping costs down but rather taking advantage of the large number of digital interactions with their clients to sell more and gain better leverage on digital marketing and client intelligence tools. Alongside all this, banks can’t just leave their physical distribution network to stagnate while developing their digital infrastructure – efficiencies can and must be achieved throughout the business.

For a small country such as Andorra (population 77,543), digital transformation comes with both opportunities and challenges. According to a study on the digital maturity of the Andorran companies that MoraBanc works with, 83 percent are at a basic stage of digital transformation and their employees have a long way to go in improving their digital skills.

To boost the digital capacities of the country’s businesses and public administration agencies, in July 2021 the government of Andorra presented a wide-ranging digital transformation project that will run until 2024. Examples of adaptations to the current regulatory framework include the implementation of a law on digital assets, a law regulating e-sports and a new digital economy law intended to encourage innovation and the diversification of the country’s economy in order to attract talent and investment.

A profound transformation of the bank in the wake of regulatory and market changes has set the pace for the bank’s strategy. MoraBanc’s strategic plans have focused on digitalization, efficiency and quality of customer service and have led to the growth of client benefits and assets under management, profitability, solvency and efficiency in the Andorran banking sector over the last four years. MoraBanc opted to place key people with digital talent at the forefront of its digital transformation project. Transformational leadership at management level, driven by a clear vision of the digital path the organization must follow, was key. As was the ability of leaders to inspire their teams to put clients’ needs at the heart of the MoraBanc experience, whatever channel they engage with.

The reputation of banking is badly damaged. We need to win back clients’ trust, improving the client experience in every interaction. Each client’s experience with the brand is unique and this has always been the case, but the advent of digital banking ups the ante in terms of the options institutions are able to offer their customers. The effective use of technology has the potential to make banking significantly more convenient, as clients are able to access the products and services they need whenever and however they need them. The potential for personalized approaches is huge, providing banks are able to turn client data – their personal behavior, preferences and circumstances – into value.

A long-term vision
Achieving this transformation wasn’t just a matter of a few new hires. The success of digital transformation lies primarily with people; it required a sea change in organisational culture, building a community where people are at the center of the business and establish quality relationships based on a willingness to share a common, long-term vision. The result was MoraBanc Digital. This digital ecosystem, approved by the board of directors at the end of 2014, included the launch of a new website, iOS and Android apps and a state-of-the-art online broker. Clients were able to reach us via new routes, such as a chat function, appointment system and MoraBanc Direct, a fully virtual client branch office.

It was worth the hard work. Between 2017 and 2020, MoraBanc Digital’s usage figures increased by 112 percent in platform access growth, 80 percent in the number of monthly unique users and 154 percent in transaction volume. And it wasn’t just clients that were impressed – MoraBanc recently won World Finance magazine’s award for Best Digital Bank and Best Banking App in Andorra for the fifth consecutive year.

At MoraBanc we are committed to digital transformation, innovation and ongoing improvement in order to be the best bank for our clients, the best company for our employees and the go-to bank in the markets where we offer our services.