Creand Crèdit Andorrà CEO Xavier Cornella on Consolidating a Bank for the Future

The Crèdit Andorrà Group has completed the unification of the Creand brand in Andorra and internationally, one of the major goals of the 20202023 Strategic Plan. The process began in 2020 with the international subsidiaries and was completed this year with the rebranding in Andorra. The group is entering a new era, projecting its solid track record into the future.

Creand is a global financial services group offering a personalised and specialised private banking and asset management service. It is the market leader in Andorra and has a presence in other major financial hubs of Europe and America, such as Spain, Luxembourg and Miami.

Creand Crèdit Andorrà’s award-winning success is ongoing in 2023, once again being named as Andorra’s Best Digital Bank and Best CSR Bank at the annual Global Banking & Finance Review Awards.

When Creand Crèdit Andorrà CEO Xavier Cornella met with Wanda Rich, Global Banking & Finance Review editor, he explained the reason behind the bank’s good performance in the last year. “It stems from the fulfilment of our 20212023 Strategic Plan, underpinned by the development of strategic alliances and corporate operations, to strengthen our leadership in Andorra and consolidate our international presence in the main markets in which we operate,” he began. “We have continued to strengthen operations and improve profitability with a business volume exceeding EUR 25 billion in 2022, 19.7% more than in 2021.”

The Creand group consolidated the growth trend in its main business figures, and in 2022 achieved EUR 43.1 million in profits, 30.7% higher than the previous year. Moreover, its international growth continued its upward trend with a 14.8% increase in international business volume. “This growth, coupled with our specialisation in products and services that increase differentiation and added value, are the drivers that have enabled us to reinforce our position as a solid group that grows stronger every year,” he said. “This means we are able to successfully deal with the challenges presented to us by our shareholders, customers, employees and the country as a whole.”

Strategic operations have been key to this growth, he explains, citing the example of the acquisition of Vall Banc, whose integration process was completed in June 2022 and which led to significant growth last year. “This acquisition has enabled us to bolster our growth plan and become more competitive in the private banking business, complementing the sustained organic growth that the bank has been enjoying both in Andorra and globally in recent years.

“At the same time, it consolidates our leadership in Andorra and strengthens our long-term commitment to the country’s economic and social progress. In turn, we have been able to accelerate the achievement of the targets set out in the 2021-2023 plan, both in terms of business volume and profits.

“This operation was executed with the utmost agility and efficiency, and was financed entirely with our own funds. The result is a stronger and more robust group. This has a direct impact on our capacity to serve customers, particularly in the private banking segment in which Vall Banc specialised, and to respond to the country’s future challenges. We have also been able to integrate the best talent from both banks, giving us a highly professional and specialised team.”

Another of the group’s 2022 achievements that contributed to its good results was the international brand unification process of Creand, Xavier revealed. “The rebranding allowed us to increase synergies, be more efficient and effective in terms of business and communication, and unify the sense of belonging among the people who form part of the group. The process will culminate this year with the change of the brand in Andorra. It represents a major step forward for us as an international financial services group.”

Creand Crèdit Andorrà’s long-term prioritisation of sustainability remains an integral part of the business’s vision, Xavier reports, not least because of the role it plays in supporting and stimulating Andorran society, its economy and its business community. “Sustainability is at the heart of what we do. It is a fundamental pillar for a bank such as ours, which has been working for over seventy years with a strong vocation for service,” he said. “The Creand group generates an economic value that extends beyond customers, shareholders and employees. In fact, 38.4% of the value generated through our activity is aimed at Andorran society as a whole. We also have significant loan investment in financial support with a direct benefit to the country.

“We want to grow as a bank because we believe that, through our strength and robustness, we can help Andorra with the important challenges it faces. But we want to grow while creating a bank of the future. This is why we were the first Andorran bank to sign the United Nations Principles for Responsible Banking. This is a strategic step in that direction, which positions us as pioneers in the area of sustainability in Andorra.”

Becoming a signatory to this initiative has enabled Creand Crèdit Andorrà to coordinate and work throughout all levels of the organisation to identify the bank’s potential, generate a greater, more positive impact through its activity, and integrate sustainability in all business areas. “It is clear to us that we have a key role to play in this field, and our management is committed to pursuing growth with a view to contributing to a sustainable future.

“Contributing to economic and social progress, as I have mentioned, is a core aspect of Creand Crèdit Andorrà,” he went on. “This objective also led us to participate in another operation, this time in the skiing industry, and we are now an active part of the new company SETAP 365, which represents the merger of the ski resorts of Soldeu, El Tarter, Arinsal and Pal in Andorra. This will enable us, as a country, to be more competitive in the international markets, with the all-country snow business unified under the Grandvalira brand.”

Along with sustainability, digital transformation is another essential pillar of Creand Crèdit Andorrà’s strategy, which it is pursuing on the basis of innovation, quality, inclusion and specialisation. “Our strategic goal is to respond to an ever-changing customer base and achieve digital engagement through personalisation and our enhanced omnichannel experience, which improves usability and makes it easier for businesses to handle payments.”

He does emphasise, however, that even with such a level of technological innovation, it is that most fundamental feature of customer service that will define the Group’s future success. “That is why we strive to offer a personalised service that enables us to connect with customers, offer an optimal digital experience, and respond to their needs with the highest possible level of specialisation. Our strategy is to continue increasing business through the commercial offering and operations in the online channel, constantly improve the range of mobility and mobile payment applications, implement remote customer service tools and digitalise processes, such as digital signatures, all with a view to offering secure and sustainable services.”

Xavier highlighted Creand Crèdit Andorrà’s fast-track onboarding process as an example of this strategy in practice. “This innovative project allows for a close and personal relationship with customers, which simplifies processes and makes it possible to streamline and digitalise procedures. We are fully engaged in the creation of a bank of the future, driving a strategy based on embracing the new digital economy through business.”

Another phase of this strategy is guiding customers through the entrepreneurial ecosystem via the bank’s ‘Innovation Hub,’ an initiative he describes as “a pioneering project to generate and share knowledge between Andorra’s SME community and the start-up sector,” enabling users to find opportunities for mutual collaboration and boost business. The project, which has been developed by several areas all across the bank, brings together different economic players, professionals and companies under a common goal: innovating as a network and generating new business. “This project represents a further step in our drive to promote an ecosystem of innovation in Andorra, with the aim of sharing the knowledge generated both by the country’s companies and the new players, the start-ups. The idea is also to encourage collaboration between the different parties to generate added value for our customers, as well as in terms of our country’s economy and society.”

Given the way the business is constantly evolving, for Creand Crèdit Andorrà, this involves continuously looking to upgrade its value proposition, in which specialisation and expert advice is prioritised in terms of the product offering, technology, and digital transformation. “We have been pioneers in payment methods and mobile payments, and we are now working to consolidate our position in the instant payment sector,” Xavier said. “Also, 2023 marks five years since we launched Merkaat, the first 100% digital investment service in Andorra, which gives customers access to a premium offer. We have recently incorporated new functionalities such as the discretionary portfolio management service to offer greater convenience for customers, who can delegate the management of their investments.”

As the 2021-2023 Strategic Plan approaches its end, Xavier concluded with an update on what comes next and how the bank intends to build upon recent progress. “We are now working on designing the 2024-2026 Strategic Plan, with the aim of making Creand Crèdit Andorrà a benchmark for customer service, innovation and digital transformation, ensuring excellence and sustained and sustainable growth, both in Andorra and the other geographies where we have a presence,” he revealed. “We will continue to pursue the growth trend in the main business figures established in recent years. This translates into an increased contribution to the economic development of our shareholders, customers and employees, as well as to the progress of Andorran society.

“At the same time, sustainability and commitment to the environment in which we work will continue to be two fundamental axes for maintaining this growth and strength in order to consolidate a bank of the future. For this, we can rely on one of our most important assets: our expert and engaged in-house team that is committed to this shared goal.”

Anthony Venus Chief Strategy and Product Officer Quadient AR Yaypay

Automated invoices: The saving grace of the late payments crisis

It’s no secret that the global economy is entering difficult waters. In the UK, inflation is on the rise, leading to the Bank of England increasing interest rates for the 11th time in a row. For businesses, this means money itself is getting more expensive. Against this backdrop, it’s not surprising that 25% of UK businesses reported a lower turnover in February 2023 compared to January 2023. What’s more, the current economic situation means any delays to cash flow can be fatal. Yet late payments are on the rise. Research found that 87% of businesses reported that their invoices get paid after the due date, but that larger businesses are likely to wait the longest, with payment an average of 15 to 30 days after the invoice due date.

One factor that can mitigate the pain of late payments and make finance teams’ jobs easier is to address inefficiencies in invoicing by implementing digital solutions. Failure to modernise has serious consequences. In fact, with a legacy paper-based invoicing system, companies have reported accounts teams spend 3040% of their time on manual data entry. Automating invoice processes cuts this time – it ensures documents are accurate and sent promptly so companies don’t waste hours chasing payments or inputting data. Automation also reduces the risks of hiccups in supplier and customer relationships caused by invoicing errors, and helps smaller companies hold larger companies to account – minimising the incidence of late payments.

Stopping invoicing issues in their tracks

Business often forget that finance is the front line of customer relations. Many customer issues stem from invoicing – from contesting an invoice, claiming payment for an outstanding invoice that has already been made, or seeking to renegotiate payment terms. If a finance team can deal with these issues effectively without needing to escalate them to other parts of the business, it is more likely invoices will be paid on time. In turn, customers can be rewarded with discounts for early payment or better payment terms. Automation ensures consistency, accelerates processing, and reduces the risk of human error.

Arming teams with the tools for success

Automation allows finance to generate, send and follow up on invoices consistently and with accuracy, so businesses can get paid faster. It also frees up time for members of finance and accounts receivable teams so they can deal with more important aspects of their role rather than chasing slow payers. As soon as an invoice is in an automated system, the platform will send an email to the appropriate person for approval – and regular reminders can be sent automatically until the invoice is signed off. This removes bottlenecks and reduces the risk of late payments.

The insights that automation provides teams through centralised dashboards and reports into customer behaviours also allow teams to understand their customers’ payments habits in depth, helping to stay ahead of potential challenges. For example, understanding what communication style will elicit a response from a customer, like whether you’re more likely to get a response over email or phone. This allows businesses to meet their customers where they are; a level of understanding that simply isn’t possible with legacy invoicing systems.

The future of invoicing

It’s important to note that while businesses can invest in automation and digital tools to combat late payments, given the power imbalances between small and large companies, they could also do with a helping hand from the government. There is currently a lack of regulation to ensure larger organisations don’t take advantage of their position. The only support that businesses have is the Prompt Payment Code, but as the Code is only voluntary it does little to enforce better payment practices. To truly change this power dynamic and improve late payments, the Code should be mandated as part of wider government initiative to create a standardised payment process.

In the meantime, and in the current economic climate, it is vital that organisations take their own steps to reduce their credit risk. This means achieving an accurate view of their finance situation at all times and arming finance teams for success. Intelligent invoice automation allows business leaders to quickly spot any potential cash flow issues and make changes to ensure issues are settled rapidly. With an automated invoice process, the finance team can future proof the organisation and eradicate the risky business of late payments.

Companies need to take preventative measures in tackling corruption and fraud

The requirements for organisations to ensure proper and effective regulatory compliance have become increasingly complex in today’s globalised world. The use of data in everyday business is growing exponentially, throwing up many complexities for corporates to manage, as is the profusion of cyberattacks both from outside and inside organisations. Throughout the world, governments, regulators, and other industry bodies are scrambling to keep up with the rate of financial crime (including corruption and fraud) and are continually introducing harsher penalties and more stringent regulation to provide a stronger deterrent.

But why is data usage increasing so rapidly? Partly it’s down to regulation and disclosure requirements but also it can be attributed to storage capacity. Computers are vastly more powerful than, say, a decade ago, with data being stored in the cloud. There is structured data including ERP and CRM systems, invoicing and product databases as well as unstructured data, often used for applications involving communications, such as video or audio files, WhatsApp messages or emails.

What is at stake from a company’s perspective is not just financial loss, but reputation. Companies that fail to prevent irregularities from occurring risk suffering significant damage, such as fines and possible loss of licences or even imprisonment of culpable individuals. The financial penalties can become considerably higher when operating on the international stage. For example, the Information Commissioner’s Office has the power to impose a fine worth 4% of a company’s total worldwide annual turnover if they have cause to believe a business made fundamental errors and did not follow due process. There is also the reputational damage, caused by negative publicity, which can affect brand loyalty as well as hit the company’s share price and valuation.

It is important to act quickly and decisively if irregularities occur and to build up internal competences and procedures in order to secure resilience and achieve growth.

Given this context, companies particularly working across international markets, simply have no choice but to invest in more preventative measures. Some companies are clearly more advanced than others in terms of having the right data analytics and system alerts, which are essentially tools that can be used to get meaning from data.

The point about data should not be confused. Yes, the sheer volume is growing exponentially and the complexity of data transfers, data management and data privacy gets more and more dense but if managed properly it can also be used advantageously through analytics, system driven alerts and notifications, and dashboards to identify and prevent incidents of corruption or fraud.

There is no “one-size-fits-all” in terms of compliance programs or solutions, as each company is different. What our many years of expertise and cross-sector experience assisting companies with various compliance needs has taught us is that the approach needs to be tailored, riskbased and technology-adapted to each company to ensure that it stands up to international best practice.

So, what are the actionable practical steps which companies can take?

First and foremost, it is vital to create an environment of trust, connecting compliance officers and teams to the rest of the organisation. The tone and the sincerity from the top and the middle of the pyramid is incredibly important. Compliance should not be viewed as a process or an afterthought; it should be part of the organisation’s DNA.

Training should be used as a measure for anything surrounding compliance and specific areas, if applicable, such as insider dealing within investment banks. It should be embedded on a continuous basis, covering policies and procedures, codes of conduct but also be tailored to the organisation so that it is meaningful for all employees. There should be training also in relation to ethics as well as whistleblowing. There must be an avenue for employees where they can comfortably and securely raise any potential concerns. Around the world, there is new legislation around whistleblower protection, but it is not well known or understood.

One of the most prevalent and recurring incidents that arise is when companies get unstuck by not having a proper handle on what external parties in their value and supply chain are doing, such as agents, distributors, resellers, or suppliers. Third-party due diligence is key in a rapidly shifting supply chain landscape and is an area where most corporates need to improve in order to manage their risks. It includes vetting third parties through the lens of ESG. There are platforms and systems available that can help organisations in the screening process, providing background checks and identifying any red flags that should be interrogated. Third party monitoring should be an ongoing process not just at the onboarding stage.

Risk assessments are also important. Companies need to understand their risks and any potential red flags. This is still the building block and cornerstone of a compliance programme. With increased and changing business pressures, ensuring ongoing monitoring of the risks of corruption and fraud must be key to being able to demonstrate to stakeholders an institution’s robust response to changing circumstances. It’s surprising how many companies don’t conduct them or do them so ineffectively as to render them futile. Businesses should endeavour to understand their corporate risk profile based on the industry they are in, the customers or governments they are dealing with and so on. The internal controls need to then reflect what their internal assessment finds.

It is the regulators’ expectation that risk assessments are conducted at least annually.

One of the additional areas that would help from a preventative standpoint is moving away from operating within siloes. Companies that act like this and don’t have integrated systems and functions cause challenges that might lead to incidents slipping through the net.

Since the start of Covid and global lockdowns, remote working has become the ‘new normal’. One unfortunate consequence of this has been a significant increase in the number of social engineering attempts, exposing financial services companies in particular to both internal and external fraud risk. Monitoring and compliance became far more challenging with a dispersed workforce. Many businesses advocate the positives but certainly there’s a higher level of disconnectedness between bosses and employees following the rise of remote working.

Finally, in the event of any allegations or indeed charges of corruption or fraud, it is vital that organisations investigate thoroughly and based on any findings and learnings, put in place remedial actions to prevent recurrences.