International Finance
Banking and Finance Magazine

Dominican Banking enters digital era

IFM_ Dominican Banking
The Dominican Republic banking industry recorded 5.1 million Internet banking users in 2022, an increase of 3.4 million in absolute terms and 302% in relation to 2015

The Dominican Republic multiple banking has made significant strides in innovation and technology by integrating digital tools and decentralising its services through alternate channels in the past two decades. Banco Popular Dominicano, the first private capital bank in the Dominican Republic continues to be at the forefront of digital transformation, with cutting-edge technology that simplifies customers’ lives, increases process effectiveness, and broadens the scope of its promise of value to society.

The Dominican Republic banking industry recorded 5.1 million Internet banking users in 2022, an increase of 3.4 million in absolute terms and 302% in relation to 2015, according to the Multiple Bank Association of the Dominican Republic. The widespread use of smartphones has also completely changed the banking sector. Banks in the Dominican Republic recognised an opportunity to use mobile applications to put banking services in the hands of their customers as practically everyone now has access to a smartphone. Banks are now able to access a larger consumer base and increase financial inclusion thanks to this change.

Banco Popular Dominicano has made progress in enhancing the effectiveness of its operations and solidifying its leadership at the forefront of the Dominican Republic financial services industry’s digital and technological transformation. The bank has also sped up the innovation process to increase its capacity for transactions and support future growth.

Digital banking

Banco Popular Dominicano is the most sustainable and digital bank of 2022, and its mobile application, the ‘Popular App,’ is the finest in its industry. In order to expand financial inclusion across the population, the bank began building a contemporary ecosystem of applications in 2022. These applications would enable it to target market segments with high potential for banking, such as remittance recipients, SMEs, and the youth market. More than 45 million transactions were completed last year using the ‘Popular App,’ which is currently used by 59% of the bank’s customers, an increase of 33% from 2021.

It is also noted that around 71% of transactions in the Dominican Republic are made using Internet banking and the ‘Popular App.’ Digital channels are used to complete 86.9% of all transactions at Banco Popular. With the addition of 70 new machines, its network of ATMs—which processes more than 70 million transactions annually—is becoming more modern. These machines allow for commercial deposits, accept more coins and bills than before and provide corporate clients, in particular, better ease and speed. The bank has started the staggered rollout of a new ‘Popular Empresas App’ for these customers, which will have a more modern and intelligent approval and product management flow, more sophisticated capability for digital cheque deposits, and a simpler and more user-friendly interface.

On the other hand, Banco Popular Dominicano introduced the well-liked ‘+Control’ function on its Internet banking website to continue encouraging responsible financial management by the clients themselves. Among other features, it enables customers to establish consumption restrictions on their credit cards based on the number of hours and days they use the card, where they shop, what they buy, how much they consume, and whether they do it online or in person.

The commercial management model of Banco Popular’s branches underwent a critical project that was successfully completed with the goal of improving service and customer experience, increasing sales, and reducing operational workload. This project raised customer satisfaction by 60 points, decreased branch wait times by more than 50%, and enhanced business officers’ productivity by 33%. At the end of 2022, Banco Popular had more than 1.3 million digital clients.

The new era of banking

The use of new technology has been reflected in the services provided by Financial Intermediation Entities, giving access to goods and services in a fully digital manner by 2022, according to the Superintendence of Banks of the Dominican Republic. Branch utilisation has decreased from 41.5% in 2021 to 35% in 2022 as a result of the development of digital services in various banks. Also, mobile applications let banks offer goods and services while also fostering stronger relationships with their customers. There has been an increase in the use of mobile applications and online banking as a result of these advancements, which are already being felt throughout the banking industry. It has also been noted that filing claims through these online channels is simple. The Financial Intermediation Entities have enhanced the rights of customers using online channels.

As part of its sustainable strategy, in 2022, Banco Popular Dominicano increased the coverage of energy consumption with renewable energy. In addition to the installed capacity of 22,300 solar panels around the nation, the bank contracted clean energy for the Torre Popular complex. This helps to lower the annual emission of 9,258 tonnes of CO2 into the environment by covering an average of 80% of all the energy used in the 56 photovoltaic branches and all the buildings that make up the Torre Popular complex.

As an organisation that had received international certification as being carbon neutral, the National Council for Climate Change and Clean Development Mechanism (CNCCMDL) commended the bank for maintaining carbon neutrality in its operations in 2022. This honour was presented as part of the 2022 Dominican Republic-hosted Climate Week for Latin America and the Caribbean. The bank’s environmental sustainability initiatives, known as ‘Hazte Eco,’ have also received recognition on a global scale. In Spain, the Corresponsables Foundation recognised them, and in London, the International Business Awards (IBA) gave them a Silver Stevie for ‘Corporate Social Responsibility Programme of the Year in Mexico, the Caribbean, Central America, and South America.’

The ‘Extrahogar Eco’ and ‘ExtraEco’ revolving loans and the ‘HipotEco’ mortgage loan for the purchase of environmentally friendly homes were added to this green finance portfolio in 2022 to further advance sustainability in Dominican society. Banco Popular also exceeded the milestone of planting more than one million trees in various parts of the country last year as part of its commitments to environmental sustainability, moving closer to fulfilling a target the bank made for 2030.

Moreover, Banco Popular works to increase financial education and inclusion as the ‘Finances with Purpose Academy,’ which has now trained more than 154,000 individuals, continues to provide more face-to-face and online courses. Additionally, the largest network in the nation, ‘Subagente Popular,’ has provided access to 2,997 linked companies enabling 550,000 customers to conduct more than 4.4 million financial transactions.

SME Service Centre for clients

Banco Popular Dominicano established the SME Service Centre for its SME clients, giving small business owners extensive support and giving their financial needs top priority. More than 400 clients signed up for the ‘Impulsa Popular’ online platform in an effort to boost SMEs and entrepreneurship, and they used the resources offered to develop their business strategies. At the same time, business owners benefited from the ‘Emprende Popular’ platform’s advantages, which included tailored products like the ‘Emprendedores Naranja’ loan, which provides financial resources as well as entrepreneurship workshops for owners of cultural and creative industries ventures.

The bank’s ‘Impulsa Forum’ and the export platform, ‘ProExporta,’ encouraged small, medium, and large-sized Dominican companies to consider export and enjoy the advantages of entering foreign trade as a mechanism to promote the development of the productive sectors and project the country in international markets. Its ‘Impulsa Popular’ web service is a trailblazing one in the nation, providing free tools to help entrepreneurs manage their businesses. More than 3,200 articles and videos on management, marketing, and sustainable leadership are available on their website.

The bank entered into a strategic relationship with Microsoft to support the digital transformation of small and medium-sized businesses (SMEs) and emerging entrepreneurs in order to strengthen its position as a digital leader. Around 1,400 SME business owners have taken advantage of training and educational possibilities through the SME Business Strengthening initiative with its partners, the Association of Industrialists of the Northern Region (AIREN), Barna Management School, and Loyola Specialised Institute of Higher Studies. Also, around 61 SMEs have acquired franchises through the ‘Impulsa Popular Franchise’ project.

Meanwhile, in order to maintain its position as the industry leader and the ‘Bank of Tourism,’ Banco Popular Dominicano has increased its dominance in terms of the total amount of loans it has provided to its hotel clients and the extensive value chain that forms part of this vital activity for the Dominican growth model.

Banco Popular accounts for over half of the Dominican banks’ total portfolio, with about $209 million in tourism financing in 2022. Banco Popular’s financial support for the travel and tourist industry is distributed among nearly 800 clients. The bank again took part in FITUR 2022, which was held in Madrid, Spain and featured the Dominican Republic as a partner nation.

The bank maintains its dedication to the sustainable growth of the region and Dominican tourism. Together with BID Invest, it negotiated a $200 million strategic finance deal with Grupo Piero for the expansion and development of tourism in its hotels in the Dominican Republic and Jamaica. This accord is expected to reinvigorate the tourism industry by investing in local suppliers, maintaining and creating jobs, and lowering carbon emissions by 60% until 2030.

On the other hand, as part of its ongoing education programme, ‘Pistas de Seguridad’ (Security Tips), Banco Popular Dominicano held three virtual seminars with educational content on cybersecurity during Cybersecurity Awareness Month that were aimed at companies, young people, and adults over 55 years old.

Additionally, each year it certifies its staff on the best and most recent cybersecurity techniques. The sophisticated Security Operations Centre (SOC), which adheres to global best practises and conducts intense monitoring and investigation to thwart threats to technical infrastructure, helps the bank strengthen the cybersecurity of its clients. The bank’s Network Operations Centre (NOC) continuously keeps an eye on its platforms and channels to guarantee the stability of the systems throughout the year.

The digital transformation of Dominican banking marks a pivotal moment in the country’s financial history. The journey so far has been marked by technological advancements, evolving customer expectations, and a responsive regulatory environment. Dominican banks are well-positioned to offer innovative and customer-centric financial services in the digital age, with the future promising even greater collaboration between traditional banking and fintech, as well as the integration of cutting-edge technologies.

The banking sector can continue to evolve, contributing to the growth and prosperity of the nation’s economy, by addressing challenges, prioritising security, and fostering digital literacy. It is crucial for all stakeholders, including banks, regulators, and clients, to work together and adapt to the changing environment as the digital transformation journey moves forward.

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