Essay Sample on Banco Santander: Company Overview

Banco Santander, S.A is a commercial bank of Spain offering financial services. The bank is based in Santander in Spain where it was also founded. The bank has hubs in Barcelona and Madrid. Banco Santander, S.A and its subsidiaries offer a wide variety of commercial banking and retail services and products to corporates and individual clients in the various regions of operations in the world. The services include deposits, savings and current accounts, personal loans, mortgages, auto finance, export finance, capital solutions on trade, global market services, credit and debit cards, corporate loans, and export finance. This company also offers management services on wealth and payrolls. The bank was instituted in 1857. It amalgamated with Banco Central Hispano in 1999 to form Banco Santander Central Hispano. In June 2007, the company changed its name to Banco Santander, S.A.

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PESTEL Analysis

PESTEL analysis focuses on the factors within the environment in which Banco Santander, S.A which will affect its stability and profitability. The analysis looks beyond the competitive challenges affecting the business. For instance, a business might be having very effective plans to make a profit, but it will not be effective when the region it is operating in is politically unstable. The factors analyzed in PESTEL are; political, social, technological, environmental, and legal factors.

Political Aspects that Influence Banco Santander, S.A

Political factors have an impact on the operations of a business. They have a role in legislation and the execution of laws. Moreover, political forces can limit the operations of a business and thus its profitability in that area. Banco Santander, S.A is operating in many countries beyond Spain. This exposes the company to a variety of political systems and environment risks. The company has to, therefore, to operate within set laws and regulations. Banco Santander, S.A has to, therefore, consider the factors of political stability of the area and the influence and significance of Foreign Money Center Bands industry in the respective country (Cohen & Scatigna, 2016). The other factor is the military invasion which could destabilize the operations of the bank. The level of corruption also needs to be considered and especially in the regulation within the financial industry. Politics also contributes to the bureaucracy and can interfere with Foreign Money Center Banks. During the enforcement of a contract, the legal framework is an aspect of politics which might impact the operations of the bank. Registration and acquisition of intellectual property protection which increases earning for a particular invention is another area of operation impacted by politics. Various regulations on wages, taxes and the employee benefits as per required by the law, and regulations on pricing.

Economic Aspects that Influence Banco Santander, S.A

Macro environment aspects which include foreign exchange rate, inflation rate, interest rate, economic cycle and saving rate influence the demand and affordability of the products which will be offered by Banco Santander, S.A. Such factors of inflation rate and growth rate can be used by the bank to determine the rate of growth in the future. Other factors Banco Santander, S.A should consider are the form of economic system employed by the country of operation. The government intervention in the free market also impacts the operations of banks and should be on focus too. The strength of the currency and how easy it fluctuates, and the exchange rates of the host country is analyzed to determine the worthiness of operating in such a country. The skill level of the human resource should be reliable, the unskilled workforce might lower the quality of services offered by the bank, this also includes the education level of the workforce which should be effective enough in providing support. Additionally, the labor cost determines how much the bank will use as an additional expense. Other economic aspects are the rate of employment, interest, and inflation rate which affects directly the income of the bank.

Social Aspects that Influence Banco Santander, S.A

The culture of the society also influences the culture of the business. The attitudes and beliefs that are shared by the population affect the strategies of marketing to be adopted by Banco Santander, S.A. The social factors that are significant for the operation of the bank are the demographics of the population and their skills. the structure of the class, the standard of living and the hierarchy in the society. The power structure impacts how the resources are distributed in society (Rocha et al., 2015). The standard and the level of education among the members of the society determines the quality of human labor Banco Santander, S.A will get from society. Gender roles and the status of gender in society influence the employment of both the genders.

Technological Aspects that Influence Banco Santander, S.A

Technology is evolving and new inventions are introduced. Technology is applied in the banking industry for efficiency and easy storage of data. The factor about the rapid change of technology should be considered and the bank should ensure that such changes are taken care of. Banco Santander, S.A should consider the adoption of the recent technologies by the competitors and how the competitors are using the technology in their operations. The rate at which the technology is diffusing and its impact on the financial sector across the region and the world should be put into consideration.

Environmental Aspects that Influence Banco Santander, S.A

Various aspects of the environmental impact on the profitability of a business. Environmental laws may limit the operations of the business. Factors of the environment such as weather, recycling, air and water pollution, waste management. For instance, if an industry is located next to the bank and releases pollutants in the air and soil, clients and human force may avoid such area. The accumulation of wastes makes the environment unhygienic and unsafe to live in. The attitude toward ecological products and renewable energy might contribute to the generation of a cheap source of energy for the bank thus cutting down on cost.

Legal Aspects that Influence Banco Santander, S.A

Factors of the legal framework within regions and countries might affect how Banco Santander, S.A operates and executes its strategies. Before getting into a market, the company should put into considerations factors such as employment laws, protection of data, safety and health law. The various laws impact the operations of the bank and may limit various activities of the bank. Laws on discrimination and working hours can lead to the closure of the business if not abided by.

Key Trends for The Industry

The banking industry is evolving and there are significant changes taking over the industry. One of the greatest trends in digital payment. Bands are moving from on point payment to cashless transactions. Mobile wallets are in great demand and the banks are adopting the digital payment methods (Gonzalez & Dopico, 2017). The banks are encouraging the use of debit and credit cards, payment through the website and mobile apps. Another trend is the use of Artificial intelligence power. The technology is providing an efficient means in automating processes that are done repetitively. This improves the customer experience. AI uses information from clients and provides important information about the customer's experience and interests. The advent and use of robots in the banking industry. Banks are investing in Robotic Process Automation (RPA). The robots can handle some activities which were previously handled by humans. The robots can be preferred as they are not prone to exhaustion, errors and are much efficient in handling tasks. The robots are also used in interacting with the customers. Also, the banking industry is earning from adapting machine learning. This technology facilitates better services onto the customers and interacts with customers according to the data collected from them.

Key Trend for The Focal Company

Technology has a lot of applications in the banking industry. One of the key technological trends in the banking industry is the application of Artificial intelligence. The use of artificial intelligence depends on previous activities undertaken by humans. Machine learning is also evolving over time and is improving with more data being used and processed. This provides positive outcomes. The needs in the banking industry have triggered increased interest in AI. Moreover, the advancement of other supporting technologies of artificial intelligence such as cloud computing has expanded the use of artificial intelligence. There are many benefits of artificial intelligence including customer experience, management of risks, compliance, and product delivery among others. With artificial intelligence, banks are handling a lot of data and allowing the automation of large amounts of data. One major shortcoming facing the banking sector is lack of skilled and experienced persons to collect and analyze data and use the information to generate particular facts and trends.

Areas of Uncertainty

There is uncertainty about developments that technology will bring and the impacts of the uncertainties on the banking industry. For instance, everybody was happy about the development of computers and computer applications. However, the applications were used maliciously to generate programs and software which were used to intrude into confidential information. The invention of the internet and its growth has also brought problems and especially risks such as cybercrimes, the internet is being used to access confidential information remotely (Elvy, 2018). Through cybercrimes, the banks have lost a lot of money to criminals who engage in cybercrime. Following this trend, the use of artificial intelligence has proved to be an important technological development. However, it is still uncertain whether the technology will serve good for as long as it is used. Artificial intelligence has for a short period of time increased its number of users and a lot of individuals and organizations are earning from it. But just like the other aspects of technology, there is fear that AI may also be used spitefully to enter into people's private data and information.

Mission, Vision, and Objectives

Mission: "To be a team that is capable of generating great ideas that satisfy our customers, are profitable for our shareholders and consolidate our position as a global financial leader and an entity that collaborates for the sustainable development of society."

Vision: "To be the leading full-service bank in terms of revenues, profitability and brand recognition, as well as client and workforce satisfaction (van Deventer, 2015). The bank strives to be a relationship bank and the primary bank of its retail and wholesale customers based on sustainable practices, serving them with its full range of products."

Conclusion

Banco Santander, S.A is a retail and commercial bank which was incorporated in 1875. The bank is headquartered in Santander in Spain. It has other segments distributed in the United Kingdom, the United States, Latin America, and Europe. The bank has various products and services such as saving and current accounts. It offers loans and mortgages to its customers who also can take other products from Banco Santander, S.A bank such as management of assets, financing corporates and individual businesses, auto finance, and credit cards. PESTEL analysis reveals a number of political, environmental, social, technological, environmental and legal aspects affecting the business. moreover, there are trends.