Monday 13th May 2019
GBA recently welcomed Banco Galicia, our first member in Argentina. Founded in 1905, Banco de Galicia y Buenos Aires S.A. is one of the leading private banks in the country, serving 3.8 million customers, with a 10 percent market share. In this interview, Constanza Gorler, Sustainability Manager, spoke with the Global Banking Alliance for Women about trends in the Women’s Market in Argentina and the bank’s strategy for supporting women in the country.
GBA: Tell us about Banco Galicia, your market position and overall strategic vision for the organization.
BG: We are the oldest bank in Argentina, and we occupy leading positions in the market in terms of deposits, loans, etc. Our vision is to be the best universal bank in Argentina – the one preferred by customers and staff members, and the one that generates the highest profitability while promoting sustainability. We develop each new product or service in the bank with a sustainability lens to ensure that it generates value to both the customer and society.
As a universal bank, we serve more than 3.8 million customers across all segments. We support 104,207 companies that cover all economic activities: manufacturing, retailers, services, agriculture, etc. We have a significant focus on the agricultural sector, which is crucial to the economy of a country like Argentina.
Our biggest differentiator is our staff. Thanks to the commitment and enthusiasm of the more than 6,300 employees who work at Banco Galicia, we reach millions of customers through a national network of 325 branches, seeking to provide a differentiated experience with a focus on digital transformation.
GBA: We understand that just half of the women in Argentina have a bank account, and just 30 percent of Argentine women have access to credit. These figures seem quite low for the region; why is this the case, and what’s driving the lack of inclusion?
BG: Financial inclusion in Argentina is remarkably low regardless of gender. The reasons are complex: The Argentine economy has a high level of informality, with high distrust of the financial system. Data from the World Bank’s Global Findex shows that of the 52.1 percent of Argentines who do not have a bank account, 59.1 percent report not having sufficient funds, 42.8 percent say financial services are too expensive, and 29.9 percent say they do not have the necessary documentation to open an account. 25.4 percent say that they do not trust financial institutions, and 11.2 percent say that they are far from financial institutions. The most important insight is that only 2.6 percent of respondents who do not have an account report that the reason is they do not need one. This implies that if we work on solving the barriers mentioned above, half of the population in Argentina would be willing to come into the financial system.
Although access to finance is low, there is also underutilization of financial services. For example, when many people collect their salaries from the bank, they take all their money out of their accounts. We also see that only 20 percent of Argentines who have a bank account use their debit or credit cards.
That is why financial inclusion is an integral focus of our strategy. We set a financial inclusion target for 2018 at 33 percent of new individual clients.
We also consider education one of the main factors that influences progress for people and for society as a whole. Since 2007, we have been promoting a pioneering financial education program through which we have already trained students from 577 institutions throughout the country. In 2018 we trained 2,722 young people, of which 66 percent were women. Boosting financial literacy means not only improving skills that enable people to make responsible financial decisions, but also teaching people how to use a transaction account, manage money, make budgets and save.
GBA: Looking at women business owners in particular, we understand that women own about 20 percent of Argentine SMEs, and the OECD average is 32 percent. What are the drivers of the relatively low participation rate?
BG: Despite the massive increases of women in the labor market in recent decades, they still experience limitations in their professional development: They work in lower-level positions and in sectors that are less dynamic and have lower wages.
According to the latest CIPPEC report, “Obstacles and Opportunities for Women in the World of Small and Medium Enterprises,” men and women report similar motivations and challenges to starting a business, but with several differences. Male-owned companies tend to have a longer lifespan as women often start businesses due to a need for more flexibility and to a lesser extent for reasons of profitability and income. When selecting a sector, both emphasize the importance of their interests and skills, and meeting people in the area. However, men consider future income to a greater extent, whereas for women, lower barriers to entry are more important. In terms of funding, both use personal savings to start their businesses, but women report that they are receiving support from their partner more than men do.
Our SME segment is composed of both sole proprietorships and enterprises. Of our portfolio of 251,968 sole proprietorships, 41 percent is owned by women and 59 percent by men. We decided to try to more deeply understand this dynamic among legal enterprises, and at the moment we are updating our systems to be able to disaggregate this data.
GBA: Can you tell us more about these initiatives to sex-disaggregate data?
BG: Based on a definition of women-owned companies of greater than 50 percent ownership, we are developing a new system that automates and digitizes the process of auditing company statutes. Within this new system, we will include sex and shareholder participation, and we will also incorporate an indicator that shows if the company is considered to be woman owned. We will be the first financial institution in Argentina to have this type of system.
GBA: Why did the bank decide to develop a strategy for the Women’s Market, and where are you in this process?
BG: Within the bank’s diversity and inclusion strategy, the gender agenda for us was crucial – not only to ensure internal gender diversity but also to ensure an external focus on women. Trends in the financial sector also showed us the importance of this approach: The traditional, masculine bank is a thing of the past. We need to level the playing field, so we owe it to women to design financial products and services tailored to their needs. It’s not about equality, but about promoting equity. Men and women have different attitudes toward finance, and we must offer a customer value proposition specific to each segment. We also must demystify the belief that the Women’s Market is not profitable.
Our strategy is comprehensive – it does not target only one segment within the bank but goes across all of them. We are working on three pillars of our program: Generate training and networking opportunities for customers, promote external training aimed at women business owners, and design products and services adapted for the Women’s Market. At this moment we are working on market research and focus groups with our clients and on improving the quality of our data so that we can make informed decisions as we design value propositions for the different segments of women in Argentina.
GBA: In 2018 the bank was ranked the best company to work for in Argentina by Great Place to Work in the category “businesses with more than 1,000 employees.” What makes the bank such a great place to work?
BG: We start from the premise that the experience our staff has at work is also the experience that our customer will have. At Galicia we want to be a bank of experiences – the best in Argentina. We offer our teams a value proposition aimed at creating positive moments, celebrating, listening, having trainings and offering new challenges all the time.
When people ask us what new policies we have implemented to get where we are today, we highlight that we focus on co-creation and flexibility. We are increasingly opening ourselves to the community to share our good practices and learn from others who have found new paths to explore. We have done this with our ColabRH HR initiative – where we convene HR leaders from some of the major companies in the country to share and jointly create new practices around our shared work areas – as well as through MeetUps, where we create a differentiated experience for our SME clients by building their capacity and creating a community, and more. Today we are co-creating a large part of our internal processes: Our new digital training platform, for example, began with a brainstorming session with staff of different areas and skillsets.
This year we extended our flexibility policies. Today we have flexible dress and scheduling; maternity, paternity and extended adoption leave; flex days; and agile equipment. We will continue transforming to provide the best experiences and distinctive professional development. We have even transformed our spaces so that they fit with these initiatives. Plaza Galicia, one of our headquarters, is a sustainable building with open spaces, recreational areas, modern rooms and a layout that seeks to telegraph well-being. We are working to have our branches and our corporate building, Torre Galicia, also incorporate these concepts.
GBA: You have a strong commitment to diversity and inclusion and consider four priority segments: gender, generations, disabilities and people from low-income households. Why did you choose these segments in particular?
BG: We seek to be an inclusive and diverse organization that ensures business innovation and sustainability; to have an open-door policy for staff of different ages, genders, sexual orientations, religions or political orientations as well as people with disabilities and vulnerable social strata. We seek to define concrete actions and promote products and services that include this perspective. We believe that this emphasis creates stronger economies, establishes fairer societies, improves working environments, attracts and retains talent, creates reputational value, promotes innovative work environments, and generates value as an employer brand.
Regarding the four work areas (Disability, Vulnerability, Gender and Generations), we have already been working Vulnerability and Disability into the framework of the bank’s sustainability program through our Work Promotion program. The other two – Gender and Generations – were defined based on the key issues that directly impact companies in Argentina today, complementing the work our HR department does to improve our employees’ experiences, increase loyalty and attract talent.
GBA: What are the top initiatives you have taken to get more women into leadership positions?
BG: Company transformation requires new ways of doing business and new types of leadership and skills. In our internal work on gender, our main objective is to train and empower women, and develop and strengthen their participation in leadership while maintaining our flexible work policies to support families and retain female talent.
To accomplish this, we have defined four key pillars: Promote better balance at all levels of the organization, especially in top management; guarantee equal pay; develop female talent to strengthen the leadership pipeline; and continue our flexible work policies. Each of these pillars has defined goals and objectives that are part of the KPIs of the leaders assigned to the project.
We know that empowering women benefits our company as well as families, communities and economies. Embodying this belief, in December we signed and committed to the UN Women’s Empowerment Principles.
GBA: How did you find out about the Global Banking Alliance for Women? Why did you decide to join the Alliance? What are your expectations as members?
BG: We learned about GBA through an event organized by the IDB in Buenos Aires for the financial sector last year. One of the most impactful things we learned was the need to move from gender neutrality to equity.
Our main expectation is to learn about successful practices that are in place in other financial institutions. Access to these experiences, and the ability to share our own, is extremely valuable. We believe that a program with a gender focus will have a great impact on the community and will be a great help for women.