With McKinsey’s support, Pichincha launches digital bank Deuna!
Banco Pichincha, a long-established financial institution in Ecuador, has launched a new digital bank and payment ecosystem. The development and launch of Deuna! was supported by McKinsey & Company.
The strategic move is the culmination of efforts to build trust and create a stable foundation for a modern, digital business. Banco Pichincha, despite being Ecuador’s largest bank, was losing its share of customers and needed to take action.
The initial phase focused on revamping marketing using AI and more agile ways of working, alongside implementing new credit models. By 2021, these foundational efforts had already begun to pay dividends, successfully reversing market share losses and increasing net profits.
However, to fully realize its ambitions, Pichincha needed to attract a younger generation of Ecuadorians who felt alienated by traditional banking but embraced digital services. In collaboration with consultants from McKinsey & Company, the bank devised a bold plan to build a digital ‘attacker’ unicorn within five years.
Launching Deuna!
The new entity, Deuna!, was deliberately kept separate from the core Pichincha business to ensure a fresh start and avoid legacy and conflicts. The joint Pichincha and McKinsey team meticulously studied past failures of digital banks in Latin America and focused their efforts on three critical areas: rapidly building market share, developing a minimum viable digital wallet, and completely rewiring the bank’s IT infrastructure.
Working with cross-functional teams and technology experts, the bank quickly built the minimum viable digital wallet in just four months. “We’ve taken a minimum viable product that we built in a few months and we are (at year three) on track to build a unicorn,” said Juan David Munoz, partner at McKinsey.
“More importantly, we’re starting to deliver on our commitment to create a banking solution for those who felt they could never be accepted by a traditional bank.”
The introduction of Deuna! has allowed millions of users to take advantage of e-banking features that were previously unavailable. It allows Pichincha customers, for the first time, to make purchases and transfer money directly from their mobile devices, including offering no-cost transfers and immediate access to credit and savings.
More significantly, Deuna! has introduced vital payment and credit solutions to over 500,000 small businesses across Ecuador who previously lacked access to formal banking services, drastically expanding the digital ecosystem.
Impact and further internal work at Pichincha
The bank’s transformation has delivered substantial results: Bottom line profits have more than doubled, soaring from $120 million to over $300 million annually, and market share losses have been successfully reversed. Furthermore, efficiency gains across the organization have freed up $117 million annually.
Beyond the customer-facing changes, Pichincha is also undertaking a massive internal overhaul. A separate team is focused on modernizing the bank’s IT infrastructure, a multi-year project expected to cut infrastructure and licensing costs by a staggering 70%, freeing up an additional $10 million annually.
To sustain this change, the bank has invested heavily in its people, reskilling over 2,000 employees and recruiting 180 new digital-native employees dedicated to building Deuna!. Deuna! serves as a vital ‘banking lab’ that helps to future-proof Pichincha, enabling it to rapidly address new markets and integrate emerging technologies like generative AI.
“New tech is the main driver for success now. In order to better compete, we decided to create Deuna!, an idea to have a speedboat separate from the bank and our legacy problems,” said Santiago Bayas Paredes, CEO of Deuna!
“It has worked very well, becoming an innovation lab for our business. We now have ~90% of the country’s merchants and it has helped the younger generation and the unbanked become part of the financial system.”
