4th September 2012

Marketing Finance in the Aftermath of Crisis

In 1998 and 1999, a serious financial crisis shocked Ecuadorians. Over the course of two years, more than a dozen banks failed, including the country’s largest, and a series of bailouts left more than half of Ecuador’s financial system in the hands of the central government deposit insurance agency, created in the midst of the crisis. After a surprise bank holiday and the freezing of savings accounts; escalating inflation and devaluation of Ecuador’s currency, the sucre; sharp increases in impoverishment and political instability; and the near-paralysis of the economy, government officials decided—controversially, apparently as a last resort, and with little (if any) outside consultation—to abandon the sucre and officially adopt the US dollar as Ecuador’s national currency.

Remnants of bank failures and financial crisis persist, often materially, in Quito. Traces of failed banks—such as Banco Popular, which showed signs of collapse in 1998 and was eventually bailed out by the Ecuadorian government—remain, even on the walls outside former branches. Certain buildings also recall the crisis. The headquarters of the largest bank in Ecuador before the crisis, Filanbanco, remains a famous sight at the entrance to Quito’s historical downtown. The building—known popularly as La Licuadora (The Blender)—was constructed in 1970 directly across from Ecuador’s Central Bank and symbolized at that time urban modernity and the rise of private-sector commercial and investment banking. During the financial crisis in 1998-99, Filanbanco required government assistance to continue operating; the bank permanently closed in 2001, and today, although La Licuadora lies vacant, the building remains as a visible presence, and reminder.

Thus, while dollarization seen through a macroeconomic lens has provided a measure of monetary stability and remains popular among the majority of Ecuadorians, the crisis and the subsequent government response has had lingering social effects—in particular, a sometimes rancorous lack of trust in banks, bankers, and those in government charged with regulating them. Indeed, one of the most powerful discourses still circulating about the crisis is the transparent criminality (according to many) of pre-crisis banking practices—including so-called créditos vinculados, lending by banks to companies within the same corporate family (or to the actual family members of bank officials)—and of the collusion between government officials and bank owners, especially in negotiating bailout funds and in preparing for the currency regime change. Despite government guarantees, some depositors claim that they have still not been reimbursed for savings lost when their banks failed, and the former owners of both the Banco Popular and Filanbanco have had lawsuits brought against them for mismanagement of depositors’ savings and state funds.

In the United States and Europe, critical engagement with finance, and with debt more generally, has become de rigueur not only among social scientists, but in popular discourse as well—on television, around dinner tables, and while protesting in the streets. And yet, almost a decade before the recent international financial crisis, Ecuadorians (and not only Ecuadorians) had begun to question banking. Many turned to savings and credit cooperatives and to everyday familial or neighborhood financial organizations to protect their savings, or they found other ways to store value—in real estate, for instance, or in automobiles and appliances. The turn to the so-called “solidary economy” (often referred to as the “social and solidary economy” or “popular and solidary economy”) reflects in Ecuador and elsewhere a desire not only for an alternative to models of neoliberal capitalism, but also for “solidity”—and in particular, the solidity provided by social interconnection and the trust that connection generates.

And yet, twelve years after the crisis and dollarization, the formal financial sector in Ecuador has in many ways rebounded, especially in urban areas like Quito and especially among the middle and upper class. Doubts remain—for instance, among the middle-aged and elderly—but it is no longer uncommon to have a savings account, to use a bank account for business, or to search out financing from banks. (Indeed, the widespread availability of consumer credit—that is, payment plans or credit cards offered either by retail outlets in partnership with banks or directly by banks or card companies themselves—has sparked a national debate over the past six months about the dangers of personal over-indebtedness.)

How do banks and other financial institutions “sell” finance to Ecuadorians, whose collective memory of bank failures, lost savings, and monetary instability continues to shape their perceptions of finance, even as the immediacy of the experience of crisis fades? Such experiences are not unique to Ecuador; indeed, it is remarkable that banks around the world, from Argentina to Japan, continue to attract new customers, and maintain old customers, despite spectacular and repeated failures. (Of course, it is also important to note the work of the state in making it possible for banks to continue to operate in and after such “crises,” in particular via large transfers of public wealth.) In the photos in the gallery above, I examine the discourses of large-scale advertisements that market finance to urban Ecuadorians. I consider bank billboards, one of the most common sights in and around Quito, as well as television commercials (embedded below) by two of the largest banks in Ecuador, Banco Pichincha and Banco de Guayaquil.

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Perhaps the most prominent tropes that appear in billboard banking advertisements are those emphasizing confianza (confidence or trust) and seguridad (security or safety). Banco Internacional’s billboard, for example, declares, “My bank gives me security,” while one of Banco ProCredit’s reads simply, “Responsible, trustworthy, and secure.” The billboard for the savings and credit cooperative 29 de Octubre suggests that you put “your money in the best hands,” underneath which, smaller and partially obscured, are the words, “security and trust.” While both Banco Internacional and Banco ProCredit advertise their AAA credit ratings, the savings and credit cooperative “29 de Octubre” employs a famous football goalkeeper as spokesperson, a ball in one hand and a wad of cash in the other.

Currently the largest and oldest, continually operating bank in Ecuador, Banco Pichincha uses its age to highlight the importance of trust, hinting at that which many of its customers already know and value: the bank’s demonstrated ability to endure economic instability. Its slogan is simply, “En confianza,” which is literally translated as “In confidence,” but which also suggests a level of familiarity or friendliness, as well as secrecy and privacy. Trust in one’s banker thus implicitly derives from that degree of intimacy.

A related discourse concerns the link between trust and solidez, “solidity,” “soundness,” or “strength.” The billboard for Banco Sudamericano reads: “Your friendly bank so that we can grow together. / Where there’s solidity … there’s trust.” If intimacy generates trust, then that trust ostensibly also reflects the “soundness” of financial institutions.

This television spot, for instance, emphasizes the Banco de Guayaquil “difference”—convenience, credit, and solidity. As the first actor says, “My bank is different. What it does, it does with solidez.” The Banco de Guayaquil slogan is clear: “Banco de Guayaquil. Solidly at your side.” (For Ecuadorians, the word solidez also suggests the “economía solidaria” of cooperatives, community banks, and other institutions that ostensibly have “social” objectives, such as protecting the well-being of their members’ communities, alongside and motivating their financial services.)

A third important trope in financial advertisements in Quito concerns proximity and convenience. Hence Banco Pichincha’s campaign to place billboards advertising the bank’s brick-and-mortar presence at the entrance to towns throughout Ecuador, such as the parish of Calderón northeast of Quito. The billboard—which reads simply, “Trust in all places”—combines an emphasis on proximity with Banco Pichincha’s traditional focus on trust.

Banco de Guayaquil has used a similar strategy as Banco Pichincha, advertising the presence of a Banco del Barrio (Neighborhood Bank) in a community by placing a billboard at its entrance. The Banco del Barrio program is a “branchless banking” initiative that aims to promote financial inclusion by equipping retail outlets (corner convenience stores, drugstores, and internet cafes) with the ability to offer basic financial services, such as the cash deposits or withdrawals and the payment of utilities.

A final trope in financial advertisements in Quito concerns retail consumption, and specifically the facility that using credit or debit cards offer the busy, cosmopolitan shopper. Hence the billboards for Banco Pichincha’s “Xperta” debit card—“For your purchases. Easy, quick, and secure, without your life coming to a stop.”—and for Diners Club (the first credit card offered in Ecuador, and now a staple in middle- and upper-class wallets and pocketbooks)—“Share a world without limits.” Both are generic statements; one can imagine the same counsel offered to sell cars or refrigerators or iPhones.

Many thanks to Bill Maurer for his feedback on an early version of this post.

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