Wednesday 18th November 2015
Our most recent member in Latin America, Banco Popular has a 65 percent share of the market in Puerto Rico; ranks No. 1 in the country in most products including SME banking; and has been recognized by the United States Small Business Administration for several years for its promotion of small business loans. Mariel Arraiza, Senior VP, Marketing Director, at Banco Popular, spoke with the Global Banking Alliance for Women about the bank’s decision to join the Alliance, its hopes for the planned Women’s Market program and the role the bank plays in supporting women.
GBA: When you started looking at the Women’s Market, what did you find in terms of women’s role in the economy both as business owners and as employees? How does this compare to men’s roles?
Mariel: We found that the labor force in Puerto Rico is mainly comprised of women, and women are graduating from high school and college at higher rates than men. Women are also making most of the household decisions about where to bank. So there’s really a lot of potential to cater to women and meet their specific needs. Our main concern at this time is making sure we go about targeting women in a way that doesn’t make men feel left out or alienated. We’re going about this in a number of ways:
The first is Start-Up Popular, which is a program for entrepreneurs that targets start-ups regardless of whether they’re owned by women or men. However, we are developing seminars and conferences specifically for women. We also supported Ellevate, which is a network of professional women, and we are supporting Grameen Bank, which provides microlending to women, hosting their operations in one of our premises for the last two years.
We want to make sure we had a different approach by creating a segment strategy around diversity that targets a number of traditionally under-served segments—not just women customers, but also LGBT customers, older, younger and disabled customers.
We also have a financial education program called Finanzas en Tus Manos that has been recognized as one of the best CSR programs by the American Banker Association. Within that program, we have been targeting women by offering training that meets their specific needs around supporting their families, business development and financial management. We have been very active in supporting women overall, but our efforts are somewhat segregated and have not yet been consolidated into a specific program for women. That is what we’re hoping to do following the launch of our diversity program.
Before we do anything else, though, we want to make sure the vision and the business case for serving women are effectively communicated throughout the bank.
GBA: Can you describe how you see the business case for the Women’s Market and what you’ve learned from the data?
Mariel: What we’ve learned from the data on the retail segment is that we have more women than men in our customer base. Women also tend to have more savings products than men and also have significantly less outstanding debt than men. Interestingly, when we look at payroll credits, we have also noticed that on average women get 80 percent of the amount that men get direct deposited into their accounts.
On the SME side, a recent Scarborough survey (a division of Nielsen) showed that a higher percentage of women (58%) than men want to open a business in Puerto Rico. I believe this is because women are very driven – they are the ones in charge of the household, and since the economic situation here is so difficult, they have to find ways to take care of their families and add additional income.
GBA: Where do you see opportunities in the Women’s Market?
Mariel: I think there’s a great opportunity in terms of education. We know that their financial know-how is lower than men’s. I think we have an opportunity to teach and coach them on this and on business development and managing finances to maximize return.
GBA: How would you describe the current state of financial services for women in Puerto Rico? Are there any differences in access, quality or customer experience from that of men?
Mariel: There’s still a lot of unconscious bias. Sometimes women complain about how the banks have not developed an approach for women or that they feel they are treated differently. We’re creating a women’s leadership program inside the bank that is very comprehensive dealing with unconscious bias training, salary equality etc. This will be combined with an internal communications campaign about our Women’s Market Program so that everyone understands what the program is about.
We have another program called “Echar Pa’lante,” which operates in universities in Puerto Rico to encourage an entrepreneurial mind-set. We have a lot of university students who are being educated to graduate and get a job working for established companies, but the job and economic climate here has been difficult. This program aims to change the mentality so many of these students will graduate, start their own businesses and become job creators themselves. Of course, it will take time to change the mentality, but we’ve been working on this for several years now, and great things are coming out of it. Our Start-Up Popular program is the next logical step to Echar Pa’lante – it will offer the funding participants in this program need, along with a mentoring and networking system.
GBA: How are you mitigating the risk of lending to start-ups?
Mariel: Initially, we are only allocating US$2 million for the program, so our risk will have a cap. We are looking very closely at the proposals and are only selecting entrepreneurs that have done their due diligence and have a strong plan, with proof of concept and a marketing strategy.
In addition, we are creating a process to help develop promising ideas, and when those are ready for funding, we will be there. However, the funding piece is only part of it – sometimes entrepreneurs just need coaching, and sometimes they only need US$2,000 to buy a new computer or equipment.
GBA: In terms of your segmentation strategy, why are you focusing on start-ups rather than existing businesses?
Mariel: We are also going to be supporting existing businesses and existing customers, but we wanted to create a strong message about the change we’re trying to create with Echar Pa’lante. We’re cultivating this entrepreneurial mentality, and we want to make sure we’re supporting it. Financing start-ups was the next logical step on that path. Once we launch the program, establish a baseline and KPIs, and see how it’s going, though, we will likely expand the program to support more segments.
GBA: With a 65% share of the banking market in Puerto Rico, why have a Women’s Market program?
Mariel: It makes sense in terms of business potential. I think that’s where there’s the most opportunity for market growth. More women are getting high school and college degrees, and more women are working. We need to accompany them in this process and make sure they feel confident and secure that they have the tools they need to monitor their finances. Once we fill that gap, we’re going to see a lot of growth in terms of accounts, credit and businesses.
GBA: Considering that a large percentage of your workforce is female, what kind of policies do you have in place to ensure staff buy-in?
Mariel: Our workforce is 68 percent women, and we have consistently worked toward equality not only in promotions but in compensation and addressing unconscious bias. We are subject to US federal laws on this, and there is an annual presentation the HR group has to give showing the breakdown of salaries for men and women at each level and explaining how the discrepancies are being addressed.
GBA: How did you first hear about the GBA? Why did you decide to join?
Mariel: I heard about the GBA through Steven Puig of BHD León – you can tell he really believes in the Women’s Market. Steven is genuinely invested in this.
I decided to join the GBA because I saw the deep understanding the Alliance has of the issues and the very strong network of banks that have done wonderful things in the Women’s Market. I think this will be the best way for us to get an understanding ourselves and develop an effective, serious, professional program.