According to local lore, every morning that Emilio Botin, father of the current president of Banco Santander, went to mass, a beggar at the door of the Santander Cathedral asked him for money, pleading, “for the love of God.” Don Emilio never gave the beggar so much as a glance.
Then one day, Botin’s se-cretary advised the beggar to ask for money in the name of the Santísima Virgin– to whom the banker was deeply devoted. The next day the beggar reached out his hand and asked for money “for the love of God,” and, he added “for the Santísima Virgin.” Hearing this, Don Emilio pulled a peseta out of his pocket and said to him: “With backing like that, yes.”
The anecdote points to a fundamental concept in the world of finance, the axis around which so much else revolves: backing
“Banking must be understood as the access of citizens to financial services,” says Javier Hidalgo, assistant ge-neral director of the America Division of Banco Santander. “But it’s not possible to bring people (fully) into the banking system if they are part of the informal economy, or if they have income below levels that justify entering the process of becoming a bank client.”
For Hidalgo, there’s no better backing for a customer than being on a payroll, although “we understand that in banking there has to be another step,” he says. “Perhaps it’s better to use the term financial inclusion, which means access to financial services without this necessarily leading to becoming a bank client,” the executive explains.
How does one get access to financial services without being a client?
Hidalgo offers three examples of access programs that Santander has launched in Latin America. “You can have a consumer credit loan without a bank account. This is already happening in Brazil and Colombia,” he notes. Another option is to receive income, from government support programs for example, on a debit card. Recipients can use the card to make payments, or to withdraw cash, without being a bank client. And finally, the bank offers service networks for non-clients.
“Service points—not banking strictly speaking– that carry all the security of the financial system,” he says.
Despite the prevalence of the informal economy in so many Latin American countries, Banco Santander’s 2012 figures show loans of $192 billion dollars and business volume of $445 billion, based on a clientele of about 9 million.
The data also shows the bank’s bet on organic growth is paying off: Latin America, which makes up 19 percent of the Group’s assets, brings in 52 percent of the profits.
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