Itaú Paraguay posted one of the highest returns on equity in 2018 among Paraguayan banks, while maintaining its top spot in deposits and profitability. At the same time, the bank pursued a far more aggressive drive into digital banking than its competitors.
“We have clients that don’t have to come to any of our branches,” says André Gailey, CEO pf Itaú Paraguay. “That’s different from the other banks.”
He believes fintechs pose the biggest challenge to his bank, not the traditional lenders in Paraguay. That means “changing the way we do business, a change in mindset,” he says.
A smart use of technology, according to Gailey, will also help Itaú tap into the 70% of Paraguay’s seven million people who don’t use banks, he says.
The bank’s digital ambitions reflect the overall strategy of its parent, Brazil’s Itaú Unibanco, which is pushing further into digital banking throughout Latin America.
This relationship allows it to adapt technological innovations developed throughout the Itaú network. “We can bring the experience in the region into Paraguay,” says Gailey.
In Uruguay, the return on equity for the Uruguayan unit of Itaú was the highest among all banks in the country last year, topping 27%. It was a sizeable leap from the 16% posted in 2017 and was powered by the bank’s profits, the biggest among private banks.
CEO Horacio Vilaró credits the performance in part to the bank’s positioning in the agriculture industry and its relationship with large corporate clients. “It was a very good year, and it will be a very good year this year,” he says.
The bank’s digital strategy also played a role in driving returns, according to Vilaró. Itaú Uruguay’s customers can perform most banking functions through a mobile platform accessible through WhatsApp.
The CEO says 75% of customer business is conducted through digital channels; the remaining 25% of clients use the telephone or visit a branch. “That’s an evolution for the market,” he says.