In this series, we share insights from our Citi Country Officers (CCOs) around the globe as they reflect on their experiences during COVID-19. CCOs are responsible for leading the entire Citi franchise in their country. They provide alignment and leadership to bring our global strategy to life in each of their jurisdictions.
Q: Can you share with us some of your early observations from the COVID-19 pandemic?
Manuel: Unlike the economic and financial crises faced in Mexico over the last 50 years, this crisis originated as a public health problem. It therefore involves many additional variables, making the economic and social fallout much more complex. On top of financial and operational risks, we have dealt with human resources, technological and regulatory issues – to name a few.
The COVID-19 pandemic imposed three sets of challenges for our franchise. First, maintaining essential activities for the country's economy, including the vital provision of banking and financial services. Citibanamex plays a key role in the Mexican financial system: we are proud to serve more than 24.4 million clients; our distribution network includes 1,465 branches, 9,450 ATMs and 29,344 correspondents; and between 20-25% of payments transactions at the national level go through Citibanamex. Second, being able to operate without compromising the health of our customers and clients, our employees and the communities we serve. Third, finding effective ways to help our clients, our employees and the communities we serve navigate through the pandemic and its consequences.
Fortunately, our reaction was timely and we faced the pandemic from a position of strength. We are strong not just from a financial perspective with regard to our capital, liquidity, balance sheet, and portfolio positions, but also from a technological, institutional and human perspective. I would particularly highlight the close collaboration and communication between our Global Consumer Bank, Institutional Clients Group and Citi Latin America, which allowed us to leverage best practices from other regions, and then implement protocols and guidelines that have been successful.
Citibanamex has shown an amazing resilience — operating almost as business-as-usual, without compromising the health of our people.
Rocio: Complementing Manuel's comments, the pandemic, and its social and economic effects, have revealed vulnerabilities and opportunities that are making us rethink our future. It has also reinforced that we have a strong foundation to build upon.
As Manuel clearly defined, we have undergone a real life stress test that showed us how to understand and react to a crisis. Not even in our harshest scenarios did we imagine a scenario that would have 95% of our team working from home for 6 months (and counting). Our prior work on operational resilience has enabled us to continue serving our clients while prioritizing the health and wellbeing of our colleagues -- all under a controlled environment. It is also helping us to re-imagine the future of our workplace. For example, we now know that having people on-site to perform certain activities is not necessary. Importantly, our culture and organizational values have been a strong binding force, so in re-imagining our future we are also thinking about how to preserve and reinforce those core values.
Our global network and the experience of colleagues have been invaluable in helping us navigate the crisis to date, not only allowing us to incorporate best practices to adapt our operations as mentioned by Manuel, but also to better serve our clients by leveraging our collective local and global intelligence. As the only international bank with operations in Ecuador, celebrating 60 years of uninterrupted presence this year, we have been able to act as trusted advisors to our clients and as leaders in our community.
One of our proudest examples is the work our team has done advising the Republic of Ecuador during the restructuring of its international bond debt, a landmark process that will provide the country and its people breathing room to recover from the economic crisis and pave the way for sustainable and inclusive economic growth.
Q: What were the early days of the crisis like for you, for the businesses you run and for the teams you manage?
Manuel: This has been a fast-paced period, which required us to take many important decisions quickly. The first big decision we had to make was whether to move forward or cancel our annual event, the Plenary Meeting of Advisory Boards and Institutional Investors. This event brings together our main clients, speakers, and Mexico's highest financial authorities. There were divided opinions, but we decided to cancel the event. In retrospect, I am convinced we made the right decision.
The establishment of a Crisis Management Team (CMT) and the close collaboration with the Asset Liability Committee (ALCO) have been crucial to supporting the decision process for Citibanamex's issues. We were able to quickly establish a seamless communication channel to coordinate efforts from the executive management team and other products and functions. We launched an internal survey to identify employees with high risk factors, so that we could protect them first. Along the same lines, we expanded our network of hospitals that specialize in respiratory diseases, and provided special transport support for employees who had to continue to work on site, so that they faced a lower risk of contagion.
In our branches, we implemented other measures to protect the health of our clients and colleagues. Those included staggered access, social distance signage in lines inside and outside the branches, provision of antibacterial gel, mandatory use of facial coverings for all team members, strengthening of cleaning and disinfection protocols, and closing and disinfection of branches if and where an employee was infected. We also designed a strategic plan for the gradual closure of branches, which led us to close around 60% of our network while maintaining service levels at close to 95%.
Currently, we have almost 85% of our staff working remotely, allowing them to take better care of their health and their families. Aware of the new challenges that working from home implies for our employees, we created an institutional program called #TodoBien (#everythingisfine) to ensure work-life balance, promoting their physical and emotional health.
Rocio: Manuel mentioned the importance of our governance structure, which has allowed us to make decisions in a rapidly changing and volatile environment, incorporating the needs and requirements of our team, our clients and our regulators. This has been extremely important to ensure the safety and soundness of our operations, while navigating significant challenges at the macro and personal levels.
At a macro perspective, as has been reported by international news outlets, the virus hit Ecuador very hard at a time when we were already experiencing deep economic distress. Our public health system came under significant strain early on. The private sector mobilized to support the government and several of our most important clients took leadership positions in creating trust funds to acquire medical equipment. We activated our global network to identify suppliers of critical personal protection equipment and medical devices that could support the needs of the country. We were in constant contact with senior government officials to make sure we understood their priorities and channeled them appropriately. I was both humbled and proud to see the speed and effectiveness of our global team's response.
At a more personal level, our team had to cope with the effects of the pandemic while accommodating new family demands, such as having kids attending school virtually. Accomplishing the proverbial work-life balance proved very challenging, so we have been working with our team to help them navigate this unprecedented time. We leveraged the experiences of our regional and global leaders to understand and "tropicalize" best practices on how to stay connected in times of social isolation. One of the first things we did was reach out to an expert in mental health and organize a chat with our Leadership Team about the science behind our reactions to stress and practical advice on how to manage it. We are now expanding this to all employees in Ecuador.
Another best practice we imported was holding all-staff Virtual Town Halls. In the first version, we asked our team to share "Silver Linings" of this crisis as part of a "Silver Lining Challenge." Our team shared amazing examples ranging from stronger sense of community to advancement in our digital offering to clients to sharing meal times with family. It was incredibly inspiring and uplifting. In addition, through our employee association, we invited a well-known Ecuadorian mountain climber, Ivan Vallejo, to share his learnings and experience when ascending K2, the second highest mountain in the world. Ivan was able to share through his story relevant psychological and physical resources required to navigate a crisis. Most importantly, he gave us hope that this too shall pass, and will eventually make us stronger.
Q: What have been some of the greatest challenges and opportunities you've faced as a leader and as a business during this pandemic?
Manuel: Personally, my first challenge was to prepare a space to work from home. From there, it was about adapting to a new dynamic in which the lines between work and family activities were constantly blurred. This included learning to set schedules and boundaries to avoid holding meetings during lunchtime or continuing to read and answer e-mails late at night. We also had to start buying groceries online and incorporate exercising at home — and find ways to relax, not only physically, but also mentally in these odd circumstances. As a leader, it has been a challenge to ensure that my personal adaptation to the new circumstances does not affect my ability and clarity to make decisions.
As a business, one of our main challenges has been identifying ways to help our clients and communities. By combining our financial strength, innovation and commitment, we managed to implement various support schemes:
For our clients, we designed a payment relief program, which allowed skipping payments for up to six months. The program covers credit cards, mortgage loans, personal loans and Small to Medium Enterprise (SME) loans—without charging late payment fees or affecting client's credit history. From this program, we received nearly 800,000 applications. We also launched a support program for SMEs to take advantage of e-commerce opportunities.
For our communities, we made a contribution of USD 4.7 million (105 million pesos) allocated for equipment in hospitals and support for doctors and nurses working directly, in direct support for with groups with the greatest needs and economic recovery. We also supported the installation of a COVID-19 Temporary Hospital Unit at Centro Citibanamex.
On the other hand, the pandemic opened an opportunity to give a renewed focus to the adoption and use of our digital tools. At the end of the first quarter of this year, we reached 6.6 million digital clients and 6.1 million mobile clients, representing annual growths of 39% and 48%, respectively. In our digital channels, the number of financial transactions from February to May increased 25% and the payment of services increased 80%. Between February and April, the number of mobile application downloads grew 116%.
Rocio: I think Manuel covered the challenges and opportunities that I relate to and apply to our business in Ecuador. I would only add that one of my main challenges as a leader has been nurturing personal connections in a virtual world. I love talking to people and getting to know them personally to understand their motivations and challenges. My leadership style relies on creating genuine connections – so you can imagine that I have been somewhat lost in the world of Zoom. I am working hard to adapt, without losing essence, learning how to read my counterparts through a screen and working to create virtual spaces where genuine connections can happen.
Q: What has been the most surprising thing you have learned from this experience?
Rocio: The pandemic is certainly a life-changing event, which took most of us by surprise. However, I am impressed by the resilience of human nature. I feel this is one of the most impactful situations on human life in recent memory yet we have managed to adapt and to support others in the process. In the words of Albert Camus: "What's true of all the evils in the world is true of plague as well. It helps men to rise above themselves."
I'd like to share how proud and grateful I am to be part of an organization that works to guarantee the mental and physical wellbeing of our teams; to be the trusted partner and advisor to our clients when they need us the most and to be a productive member of our community through thick and thin. This demonstrated empathy is what, in my eyes, makes us different and unique.
Manuel: I think the most surprising thing has been realizing how quickly our lives can change and how important it is to be able to adapt to all kinds of circumstances—both on a personal level and as a company. As Darwin demonstrated, adaptation is essential for survival.
Personally, being at home with my family has forced me to balance my work and my personal life. Professionally, it has reinforced my belief that crises can bring out the best in people. My Citibanamex team has shown exceptional commitment, dedication, and professionalism. Thanks to our teamwork, we have achieved a significant increase in productivity and the consolidation of our technological infrastructure. With every crisis, innovation is unleashed. The pandemic has encouraged us to demonstrate what we are made of, and to be creative, too.
This has also been a great opportunity to realize the personal challenges we face and to strengthen empathy for our employees.
Q: What is your hope for the new normal that will emerge?
Manuel: A much more widespread acceptance of working from home, including the way of life and practices associated with it. Prior to the contingency, we already had flexible work arrangements, but the pandemic allowed us to take a closer look at this. We reviewed several components, including reduced physical presence, the adaptation of spaces for face-to-face work, and the challenge of virtual talent management.
We created a Return to Facilities Working Group, through which we are developing new protocols and behaviors to ensure we all contribute to a safe and healthy workplace. We will certainly continue to innovate our way of working. Given that COVID-19 comes with many uncertainties, we are guided by data, by our institutional principles and the lessons learned from other regions, which we apply taking into consideration also our heritage and solid position.
Another distinctive aspect will be a renewed focus in the use of electronic commerce and digital services. After an increase of 100% during this year´s Hot Sale (an e-commerce promotion), I am convinced that e-commerce will continue to grow as we look ahead, and that banks, as key players in this ecosystem, will have to work hard to make transactions easier and safer for clients.
I am enormously proud of Citibanamex's extraordinary response during these difficult circumstances. Once again, we have proved our commitment to Mexico and demonstrated to our different stakeholders that we are a brave, open, strong, and principle-driven bank. This explains why we are considered the benchmark of the banking industry in our country and one of the most respected and admired brands in Mexico.
Looking into the future, I am sure that we will emerge stronger from this crisis. We will continue to promote financial inclusion, economic recovery and the construction of a sustainable and inclusive development model for the greater well-being of all.
Rocio: I can relate to and agree with Manuel's comments above. My expectation of a post pandemic reality is of a more flexible work environment, focused on results rather than facetime. Empowerment and empathy provide for a more motivated team. I also expect the digitization process to continue expanding, which will allow for a better client experience, in a more secure cyber-environment.
If you allow me to be idealistic for a moment and expand my hopes beyond our business, I hope that we will take the lessons the pandemic is giving us to build a future where dignity is the norm, embracing how interconnected and interdependent we are, reimagining the world in a more inclusive and sustainable way.
Q: How has your country team been giving back during this time?
Rocio: We have been able to direct part of our local budget to support vulnerable families in Quito and Guayaquil through food kits for them to go through the isolation period with some level of food security. Also, as mentioned before, we have served as a bridge between several reliable medical supplies producers and the local private sector funds established to acquire them.
Manuel: We made a contribution of USD 4.7 million (105 million pesos) allocated for:
Through Charitable Contributions of USD $27 million made along with 16 corporations and private foundations, we also supported the installation of a COVID-19 Temporary Hospital Unit at Centro Citibanamex (a Convention Center sponsored by Citibanamex). This hospital has 900 beds (854 hospital beds and 36 medium therapy), an outpatient care unit and an assessment module (TRIAGE), and it provides free medical assistance to COVID-19 patients who are in a non-critical condition.
Citibanamex has the best team in the financial system in Mexico. I knew they were good, but they are even better than I thought. Many managers have shared their gratitude and the pride expressed by their teams to work for an institution that values employees' safety and tries to facilitate the right balance in life. This satisfaction and pride have transformed into steady productivity increases.
Having this team reinforces my confidence in the good prospects of our institution in the medium and long term, and my optimism that we are on the right path to offer the best banking experience in Mexico.