14: La transformación digital en la banca puertorriqueña | con Camille Burckhart, Banco Popular

Well, look, definitely as a woman, and I'm going to self-categorize as young for my mental sanity, it's definitely complicated being in a financial industry dominated by men and on top of that technology, two industries where most people are male. So I have gotten used to living in that environment to a certain point, but sometimes I like to take a step back and talk with other colleagues. Without a doubt, there have been many challenges, but on the other hand, I believe that where there is respect, you can always work in a positive way. So it has never necessarily been an obstacle, but rather the opposite. It's a trajectory where, from the very beginning when I still didn't know anything, I was given the opportunity. I had the opportunity to do many super interesting things at the bank up to today. I started, as I said earlier, in the area of internet strategy, then I started as an analyst until I led the area. Then I went for a time as an internship in strategic planning, which I say was a short internship, but those are pivot moments in one's career that are super important because they help you broaden your perspective and realize if you like it or not. In my case, I loved the perspective but realized I liked returning to the area of digital and technology, and that's where I started to lead technology for Popular, and that's where I am up to today.

Well, I started 23 years ago in general. I was about 8 years in internet strategy, just one year in strategic planning, and the rest of the time then in technology in different roles because we started with a very small group. We just did a transaction where we sold our technology subsidiary, which many of you know as Evertec, and then we formed a technology group within Popular that would have, so to speak, a proprietary strategy for Popular, not necessarily the strategy of a technology company only, which is what Evertec was focused on doing. And there we started with a group of 30 people. Today the technology group is almost over 700 employees, so without a doubt a super cool growth. And there we have expanded from pure technology management, the systems where deposit accounts run so you know you have your money, your loans, your mortgages, but also the payments part, digital banking, and many other things.

Yes, I think one has many challenges, let's say technical or area-specific, but I think those are very easy to overcome, or less difficult, because they are things where you have the right people, the expert people, you surround yourself with people who can help you, and you can always overcome them. The most complicated challenges are cultural challenges, change management challenges. Those are for me the most interesting challenges. Another challenge I think is the speed at which we want to move. I have the great fortune of working for a company that has been recognized for innovation since it began, and that sometimes brings with it a desire to move really, really fast, and when you are working for a 130-year-old company where you still have a lot of legacy technology, moving fast is very complicated. That's where I would say the technical challenges come in, which are quite large. It's not about an obstacle in a project, but rather how you make a comprehensive plan of 5, 7 years, which in technology sounds like 30, where you can really move pieces to be able to show innovation in the market, move at the speed customers expect without neglecting regulatory issues that no one will notice you did but are important projects. So I would say that besides the cultural and change management issues, the speed issue is another important challenge. And the third that comes to mind is the issue I mentioned at the beginning: being in an industry as a woman, dominated by men, without a doubt it is a challenge. I always try to look at it from the perspective of seeing it as an advantage because the perspective that I might bring to the table will possibly be different from what others have. So, for the girls out there venturing into this world, don't be discouraged. Being in the minority is a great advantage.

Well, look, in Puerto Rico I think one of the great advantages we have is that Puerto Ricans love new things. Since we've been seeing studies on internet use in Puerto Rico, we always start a little lower, but we already see Puerto Rico positioning itself super well in terms of technology use. So to begin with, Puerto Rico is a great ecosystem where digital transformation happens more naturally, in the sense that if you put something out there that is easy to use, cool, and solves a real problem, people will use it. And we at the bank have always said that we don't innovate just to innovate. We are not going to rush into blockchain or the latest thing. It's about what problem do we really want to solve? And for me, digital transformation is about that: solving real problems. It's not about using the latest and brightest and shiniest technology. It's about accelerating how you can make processes that you don't like doing in person or manually, easier. I think, for example, the government has done some great things with CESCO Digital. I don't carry cash, and I go out and they ask me for an ID to see a beer, and I say thank you very much for asking for ID, but I don't carry one. It's happened to me, and I say, but I have the digital CESCO. So that's the kind of digital innovation that I find most relevant. Other examples like ATH Móvil – I don't know any Puerto Rican who doesn't know what that is. I think being part of those processes where you really are thinking about what we want to change and how we change it through technology and digitalization is what makes Puerto Rico the perfect ecosystem: an island 100 by 35, we know the culture, we know the people, we know the everyday problems. It's about solving those things that are in front of us, we all know what they are.

Yes, well, look, from what I would say in different facets, Popular, due to our size, contributes to this digital transformation in many ways. There are always our direct products that we conceptualize, launch, and make available to the public. There you have Mi Banco, which are the projects I worked on from the beginning, and seeing the number of people who use digital banking. The other day we were graphing the last 10 years of monetary transactions and how they have moved from human-assisted to digital, and it's incredible how checks and cash usage have decreased spectacularly. And there, obviously, is our contribution to the country and the ecosystem, having products and services that allow you to, if you wrote a check because you had no other option, deposit it digitally, or if you want to send money, you can do it through ATH Móvil. So those proprietary services are obviously a direct contribution from us. But there is also the issue of how Popular, as a company of the size we have, affiliates with other companies to help. We don't have to create everything ourselves. There are many examples, like our collaboration with the government, with startups, with the accelerator. Popular definitely has that mindset that this is not something that is self-serving, about what product we can make just to reduce human-assisted transactions digitally, but really there is a bigger purpose behind it, about what we can do to contribute to the country, to accelerate that transformation. We have very interesting conversations with different sectors, from how we share information, how we make available data that we have that could help another company do something more interesting. Some examples I can't mention yet because we are working on them, but there is that desire that goes far beyond a product or service, but how we contribute to the ecosystem. And Popular has been super active in that, from sponsoring the accelerators, mentoring startups, and collaborating in every way we can.

Look, that's returning to the challenges, that's an important challenge. I think there will never be a perfect balance. Things we do that might help those listening in their companies or groups: we try to start by managing expectations. The other day we called them investment themes. If we have a pot of $100, how do we want to invest it? What percentage do we want to dedicate to regulation, security, innovation, growth, and efficiency? And we divide it into buckets. Again, we never have the perfect balance, but it ensures we have an internal check and balance so that whoever shouts the loudest doesn't necessarily unbalance that equation. So sometimes, for regulatory issues, we operate in a highly regulated environment in the banking industry, which also happens in the insurance industry and many others like pharmaceuticals. So you will always have that. I would also say, don't fool yourself. Don't put 5% on regulatory and security issues because you will never comply. Be realistic. You look back and say, well, historically in the last 3 years, this is how we have invested, and we say what do we want? If we want to do a little more innovation, let's put a little more into that pot. And we review it monthly and say, are we balanced or not? And again, there will be months or quarters where, because a new regulation comes in, you have to dedicate much more resources and money to one area versus another. But it keeps us honest to say, okay, the next iteration, the next sprint, we will dedicate a little more to business growth, sales, or efficiency because perhaps we have left it a bit behind. So there will never be a perfect balance, but perhaps my advice there and what I have learned over the years is that if we are at least honest from the beginning about the expectation, don't put 100% on innovation. Okay, then we won't be able to release 35 products and services in the next two months. We'll have to balance it. And that helps from the start so that the teams, your stakeholders, whoever it is, understand what you are going to dedicate your time to. And again, in technology, I am sure everyone who works in technology knows that people are never happy that there are enough resources to do things, never. So it's about how you achieve a balance where everyone is more or less happy.

Well, I think I wouldn't necessarily answer with products we launch. We do have programs like the startup program I mentioned, our sponsorship with Parallel, with Endeavor, so there are many platforms where we are contributing a specific tool or program. A relatively new one is called the Impact Fund, where Popular is launching this fund. We are already 2 years into it, 15 million, I think we have gone through about 8 million already. It's literally like seed funds, a minority participation in companies that are either fintech or social impact in Puerto Rico that we believe in and think that with a little push we can help them. So that is a specific tool from the bank that I think entrepreneurs can use. They come to us through different forums, but they can send me a message if they have an idea. Sometimes we meet them at networking events, Parallel events, and connect them with the people who work with the fund. And truly, there have been super cool success stories from Parcha, Ironhack, a bunch of examples of companies with really, really cool things. But in the end, in a bank like ours, having a bank that understands startups, we like working with startups. So they can also see us as an advisor in the process. We know that perhaps you won't have 3 years of financial statements to start and get initial financing, and for that there are programs for early-stage companies, others for medium-stage, and others for expanding. So know that that is another mechanism the bank offers as part of its basic financial service, but we do try to do something specific for startups so that you don't run into a situation where you don't meet a requirement. So we also try to adapt that to that reality.

I think Puerto Rico has an incredible advantage. First, from the allocation of federal funds, many startups we see in different stages see Puerto Rico as a way to jump into the American market. The fact that we are in a US jurisdiction gives that kind of testing ground, perhaps in a somewhat more controlled environment. But I also think with the talent here in Puerto Rico, the fact that we are bilingual, the fact that we are an island, it's a good controlled ecosystem to test products and services. And I think the talent we have in Puerto Rico is spectacular. I recruit people from the US, Colombia, Costa Rica, and I can't say I feel talent outside is better than here. Here sometimes what happens is we are few and we want more, but we have spectacular talent. So we are a great service platform to expand externally.

Look, I think one of the things we still lack is... Startups can benefit from that for what we talked about, because obviously by having an ecosystem where you have talent, the bilingual issue, being in a US jurisdiction, any startup coming from Latin America wanting to expand to the US can benefit from that kind of environment where it will work super well. But I also think about what we talked about at the beginning: you are also working in an economy and a culture where people like to try new things. So I think that is another excellent way for startups that want to test, if this problem really moves the needle, if it's a real need, it's a tremendous market to test innovative or even crazy things to see if people really understand it and it works. So I think I wouldn't want to test any other market than one like this that has that combination of factors. So they should take advantage of it.

Look, obviously right now, I'm going to be super honest. With the topics of blockchain and cryptocurrencies, I am often very reserved with that technology because it's almost like a technology forcing the use case, and I like to do it the other way. So things that I do believe have spectacular potential is artificial intelligence. That is one where I really don't think it's a fad. I think that one is going to change us like smartphones changed us. I think that after a few years into that technology, we will say how the world could have been without being able to talk to Siri and have it really understand me, which still happens today. But if you've seen the new launches now with the new version of iPhones and iOS, as this starts to get into everyone's hands, it's going to change super fast, and you won't remember how dumb the Siris and Alexas were before, because the reality is that today they don't understand half the things you ask them. So in banking, without a doubt, that is a technology that is going to change automatically, and if we don't adopt it, the financial industry, startups, all industries, we will all be left behind because the expectation will be there. Just like today the expectation is that I can get into a car, arrive at a place, and not have to ask how to pay with a card. It's already ingrained in the app you're using, and you have your default payment method integrated. That same concept of Amazon recommending something that is related to a purchase is going to become an expectation that we be more intelligent, just like it has become an expectation that we are digitized. So that's one where we are doing a lot of things, experimenting with artificial intelligence, from process automation to using data to provide customers with something much more relevant and not ask them what language they want to use the ATM when we already know they always choose Spanish, from simple things to very sophisticated things we are looking at.

Look, I sum it up with education. I think we still have a very important gap in the number of people who are studying disciplines that will help us in this digital transformation. And here I want to pause a bit because I think that when we talk about education for digital transformation, we think only about technology, and that is super far from reality. For you to be able to develop products, you need a product owner, possibly a digital product owner who knows about digital, you need designers, UX/UI designers, you need customer research to really listen to the voice of the customer to ensure that what you are going to develop is relevant, understandable, and easy to use. You need developers, technology definitely. So we have to think about scrum masters, coaches because we work in an agile methodology to not wait 2 years to then launch and say 'ah this doesn't work,' you want to release it in small increments. So all those disciplines, I really feel we are not yet educating in all those disciplines. I have a niece who is in her second year of university, and I was telling her about working at Popular, and she thought, 'but I don't know if I want to study finance to work in finance.' But it's not about that. And I think this will happen to all companies. We have to change sometimes even the perspective of what we do. All companies have technology, all companies are going to have to develop these types of products, all industries. So it's not about only thinking that if you study finance you work in a bank. You can study systems engineering or customer research and work in a bank or a pharmaceutical company because all companies are going to have to have that type of ecosystem to create relevant products and services using all these technologies we've talked about. So I think we still need a lot of education. I collaborate with, for example, the 21st Century Task Force, which also tries to see how we change that mindset. It's a program sponsored by the Department of Education on how we ensure we change the mentality and structure of academic programs in high schools and universities because you need to have more relevant curricula than I think we have today. So I think if there is one thing that, in my opinion, is needed to guarantee success in the future, it is that we have more people who educate themselves in these areas and don't learn them only on the job. Most people end up learning it on the job, which is fine. For example, at Popular we have programs like with Ironhack where we did an academy where we take recent engineering graduates from university but then we have to put them through bootcamps so they can learn the technologies for the type of technology stack we are developing. It's not so much about Cobol and C# anymore; we want to learn other types of languages. Those are the gaps we see. And those programs are fantastic, but they are 10 students a year that we can bring in. We have other programs, for example with Holberton, where we take employees who are already in the call center who were interested in reskilling to change careers, and we train them. They stay as our employees, but we invest in continuing to pay them a salary while they study, and then they enter the technology group already with a formal education in development. So now we are doing these programs with them, trying to extend it to the other disciplines around technology, not just development. But again, if we could replicate that by 100 or 1,000, Puerto Rico will be super ahead.