Never Stand Still Season 3 | Episode 7 | Banco Santander Executive Chairman Ana Botín

I probably would not be as passionate as I am about inclusion and SMEs if I had not been on the other side, if I had not been an entrepreneur myself for a few years. Running a small company is very difficult. But really what I learned was, you know, there's always things you can do. And very importantly, the importance of banks and how, when I was running my own small company, banks can really have a very positive impact or not. And really helping small businesses is something which I learned during those years.

Thank you, Dan. It's great to be with you. And all of those things you said are not really important, so I'm a bit embarrassed by that introduction. And I hope we can have a good conversation.

Well, you're right. My parents both have had very distinguished careers and are amazing people. My father died five years ago, but my mother is still alive and working very hard for music and her foundation. I'd say I was born in a very small town in northern Spain. It's on the ocean, so it's a Celtic area of Spain. My mother is actually an O'Shea, so I'm partly Irish on her side. My father ran a big bank and it's been in the family for many years. But my mother really was the biggest influence on me, and most of my six—we're six in total, six siblings, and I'm the eldest. She educated us in a very advanced way. If you think about this, a small town in northern Spain, I was born in 1960, and she really pushed us very hard in terms of learning music, learning languages. And from the age of 13, I lived outside of Spain. So by the age of 30, I had lived more years outside Spain. I had lived in six different countries—not just Spain, but London, the UK, Austria, Switzerland, the US—and I had worked also, of course, and gone to university abroad. So it was in a way difficult because you were away from home for many months from a very young age. But I think that's one of the things that helped me most in life. Arriving in a new school, making new friends, understanding different cultures, really the value of diversity—which at that age just means you have to make new friends and adapt fast—but in life and actually professionally, that's exactly what we all have to do every day. So it was very deeply ingrained in me, and actually my sisters and brothers, that we're not all the same, we're all different. And just moving and having to change so often, even though it was hard at the time, it really made us into very, let's say, modern citizens, because that's how the world is today. The other important factor was the sense of responsibility. Being around not just my mother, who founded her very renowned, world-class music school where basically all the students have scholarships—100% of them, 80% come from backgrounds under the poverty line from all over the world—with Queen Sofía being the head of the school. My grandfather and his brother both put in place foundations. So many of the shares of the bank were actually, to this day, owned by foundations and basically given away to different projects. So understanding that we all have a responsibility to do the best we can with what we've been given and to give back—those were very important factors in what I am as a person today.

This is really how we've always thought about the business: it's good for the business to do good. Being responsible is not just a nice thing, it's not just good for society, it's actually very good for your shareholders over time. And this is something which I remember—my first speech at the annual banking conference we do in Madrid five years ago, when I really spoke about going back to our roots and understanding that responsibility is at the heart of our business. When we bought many banks in the previous 10, 15 years, the culture of Santander was not really a common culture. So we really had to articulate what we had actually been doing for 163 years, but having to spell it out. We agreed—and I had done this in my previous job when I was running Santander in the UK—to have our common mission: to help people and businesses prosper. And if you ask any of our 200,000 colleagues around the world, of which 100,000 are talking to customers every day, what it is that makes us different, the answer is: we want to be a bank that does things in a way that is simple, personal, and fair. So those are the three words that each one of us goes back to when you need to make a decision. Every day we have to make difficult decisions that have an impact on different constituents. It's impossible, even in a regulated industry like ours, to have a rule book for everything. So when you have a doubt about how you should do something, how you should develop a product, how you should treat a customer, or how you should make a decision—those are the three go-to words: simple, personal, and fair. This is really what it's all about. And inclusion for us is how we run our business every day, but we also have specific goals in terms of empowering. I like to think of not just financial inclusion but financial empowerment. We just last year, 2019—the best thing we can do in that regard is doing our jobs well every day—but we also set ourselves a goal to empower 10 million people over the next four years. We empowered 2 million last year. We launched a number of initiatives, some of them already 15 years old. The Prospero program—you and I have discussed that a number of times. It's not just about having people open an account or making payments; it's about allowing them to start a business. I like to give the example of a lady called Denise that I visited in Paulista, which is a town in the northeast of Brazil. A tiny shop in one of the suburbs—I bought a shirt, I don't have it on today, but I tell you, beautiful shirt. In this tiny shop, she had taken 10 different microloans over three years. I was able to pay with my Santander card, she had a POS and she could make payments and receive payments. This lady was planning, at the time when I visited her last year, to buy a plot of land to build a house. She was already thinking about hiring a person to work with her in her small shop. This is what we call financial empowerment, and what we're really working very hard on across Latin America but also other countries.

There's a lot of discussion about how regulation helps or doesn't help. At the end, it's about consumers. We're trying to protect consumers, we're trying to make sure they have fair access and competitive access to products and services. So as a highly regulated industry—and I tell this to my colleagues—we are regulated and we should make the best of it. I do think regulation is something which I tell my team is like the air we breathe. If you are not compliant with regulation, you're just not going to exist. So please, let's get on and move on. At the end, it's a lot about the culture, as you know. My favorite—and it was actually my father's and my grandfather's favorite sentence already—which is: we want a culture at Santander that combines the wisdom of age and the spirit of youth. That is really how I think about us as a 168-year-old company, highly regulated, competing with companies like PayPal or fintechs or Apple Pay or other banks. Combining those two means we need to be able to innovate within a large company. It's not easy. We have different models. As you said, we bought companies like Ebury, but we've bought other companies like Getnet in Brazil, which is a merchant acquiring company, a leader in Brazil, which we're now taking global. We've done another one called Super Digital—we were discussing financial inclusion before—which is now in many countries across Latin America. What we do is buy small teams, let them get on with it, and then take them to the global franchise. If you're a startup—or not just a startup, Ebury is actually a 10-year-old company—what I can offer is collaboration with my customer base of 145 million. I leave them relatively separate. I bring their compliance, know-your-customer, and payment regulation to the bank standard, because that's the way we are a bank, and we find ways of doing that. There's two types of innovation, by the way. One is what we call business model or process innovation—that is going from a branch to online. We're now at 50%—half of everything we sell at Santander is online, and most of that through mobile—50% of all our products and services, even though we have 12,000 branches and 100,000 people talking to customers. And then you have customer innovation, which is harder for us. But we are achieving, for example, one-click e-commerce checkout financing online. It takes much longer because you have to go through compliance. Those are the two things we're working on, combined with bringing in teams from outside, because at the end we cannot assume we have an answer to everything. So we try to bring in teams, but we also collaborate with many firms like yours and others across the spectrum. That's how we manage the innovation process.

I think it's essential. In this crisis—and just going back to our own sector, to finance—we are very much, and I've said this publicly, being part of the solution and collaborating on several levels. First, in trying to shape the public policy response. We've been working with the Mexican government, but also the European Commission and the Spanish government, the UK, and trying to make sure that people and businesses get the one thing they really need today, which is liquidity. People need to be able to pay their bills, pay salaries. We've been super active in trying—because sometimes governments want to make this available, but they need somebody to transmit it to people and small businesses fast. And as we all know, governments have certain rules, and if you cannot find the mechanism, jobs disappear, people cannot have meals and go hungry. So we've been very active in trying to find the right models to make sure that it's not just that governments can announce the measures, but they can actually make them arrive fast. We are very active on that, and I do think we have a responsibility as business leaders to contribute, each one of us, what we know. Let me give you an example: we spent two weekends—my team spent two weekends working with one of the ministries here in Spain because the unemployment benefits went sky high over two weeks. Any of us who run companies, if you have an operation that suddenly has to do 10 times more from one day to the next, it ain't easy. There's also lots of legal, operational issues—ensuring that when I send you the benefit, it's you. I'm sure you've read in the newspapers about governments, important governments around the world, where funds arrived to people that were not around anymore because they sadly had passed away. And this is something we're very proud that we could help—not just as a bank, but also putting our resources to help governments structure the operations that they needed. Another example I'm very proud of: in the first weeks of the pandemic, we have a big purchasing group around the company globally. When people were trying to find masks, respirators, all kinds of protective equipment, we could source in China and around the world in a way that our governments were not able to do. Not just us, but a number of companies in Spain—we got together and said, let's put our people to go out and scout. Where do you find these? We were very active on that, and I'm very proud to say we were able to pitch in when it was needed.

I agree, I agree. Going back to your previous question on innovation, I have a great story. I have three sons, and one of them—and actually all my sons studied in the US, and two of them are still there, one working in Los Angeles. One of them, when he was coming back from college, had made some money—not a big amount, I think it was like 500 or 600 dollars—and he was coming to work in London. He obviously opened an account with Santander. I was at the time running a bank in the UK, I was CEO there. And he calls me up one day and says, 'You know, I am opening an account with you and I want to transfer my 600, but you're charging me way too much for my transfer.' And I said, 'Oh, how interesting, so what are you going to do?' And he said, 'Well, I found this really great company called TransferWise and I'm going to use them.' This was back in 2012 or 2013. So I went back to my team and I said, 'Please, can you tell me why are we charging so much to our customers to transfer funds? It makes no sense.' And they said, 'Well, actually, there's all this back office in the payments world where even though we're charging what seems to be a lot, we're actually not keeping a lot of that. So we need to find a better way, because at the end we also need to make a margin for our shareholders.' So yes, we have to find better ways of making cross-border payments and payments in general accessible. And as you and I know, it's not just us who are dealing with a customer—it's everything that's behind. All these new technologies, I think, are going to be very helpful.

Well, I've had several, like almost everybody. It doesn't matter who you are, where you come from. The one that probably most changed who I am—not the only one, I have a couple of others—but back in 1999, we announced a big merger. It was January, really the euro had just begun, and we announced a big merger in Spain. It was actually an acquisition, but at the time we explained it as a merger. It was a bank that was actually the same size as us, and at the time I was actually co-CEO of Santander. I had 50,000 people working for me. I was really running almost the whole bank, and it was not an easy time. Because the CEO—even though I was co-CEO—I was going to be the CEO of the other bank. To make a long story short, there was a very long, probably 20-page newspaper article, and I was on the cover of this very widely read publication. This created a big problem for the other bank. And so on a Sunday, I was in the countryside, I have a house next to my father, and he calls me and says, 'Ana, you know, you have to leave the bank.' And I said, 'What do you mean?' He said, 'Yeah, you need to leave because otherwise there's no merger.' So basically from one day to the next—I had been working first at J.P. Morgan for eight or nine years, but then ten years at Santander—I was basically asked to leave. Very politely, but it was not just the fact of being asked to leave as an executive, it was also the way it was done. And I always say—and to me the big lesson was—when all of us have had to make these kind of decisions with people, the way he did it was very, very hard. I had actually lost a child a few years before, so I said, 'So what do I do now?' And he said, 'Well, go and have more children.' So it was a very, very tough moment, and the way it was done was really hard. What I did next was I set up a small company, actually a tech advisory for banks—I helped banks set up their internet banks. I set up two foundations: one for SMEs in Mexico, actually with the Inter-American Development Bank, and another on higher education universities, which is still the reference in Spain, on their private equity fund. So I was very busy for a few years. All I can say is that you have to reinvent yourself so many times during your life. And I think moments like that—I was very lucky, I was in a very privileged position because I'd been around already, working for a long time, so I could actually have the option of doing all these things. But it was a very difficult time. And by the way, I probably would not be as passionate as I am about inclusion and SMEs if I had not been on the other side, if I had not been an entrepreneur myself for a few years. Running a small company is very difficult. When I came back to Santander—I was asked to come back three years later by my father, that's another story how he did it. I was being economically very successful, having a great time, and then he says, come and run Santander. But really what I learned was, there's always things you can do. And very importantly, the importance of banks and how, when I was running my own small company, banks can really have a very positive impact or not. And really helping small businesses is something which I learned during those years. So that's really probably the hardest time that I had.

Thank you for inviting me. It was great and fun.