A Smart Bank In a Smart State
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The tiny city-state of San Marino has a proud and distinguished profile on the global stage. It’s the oldest republic in existence, for starters. And while it’s among the world’s smallest countries, it’s also among the wealthiest. It has a particularly advanced banking sector, which, right now, is punching well above its weight and making its presence felt internationally.
At the forefront of this is Banca CIS – Credito Industriale Sammarinese S.p.A., one of San Marino’s most dynamic financial institutions. Over the last three years, Banca CIS has undergone quite profound structural and organisational development. Banca CIS is the product of the 2012 acquisition of Credito Industriale Sammarinese, a long-established financial institution in San Marino, by Banca Partner, a private bank focused on Asset Management. The combined entity – renamed Banca CIS – subsequently acquired assets and liabilities from Euro Commercial Bank.
Today, Banca CIS has around 90 employees and an extensive business network throughout San Marino and internationally. As well as the benefits it brings to local savers and investors, it’s active on the charitable front – both locally and internationally – and sponsors a host of organisations involved in youth education, sport and training. It’s also a keen supporter of local cultural and arts associations, according to Daniele Guidi, the bank’s CEO.
Although Banca CIS has retained its original focus on asset management, it has broadened its portfolio of private banking services. According to Guidi, its priority now is “continuous improvement of product and service for customers”.
Following the merger in 2012, Banca CIS reengineered its operational and organisational structure so as to achieve a number of key objectives. One of these was to become stronger in the areas of compliance, legal, auditing and risk management functions that arose from regulations introduced and overseen by the Central Bank of the Republic of San Marino. It adopted a proactive approach to ensuring consistency throughout the organisation with all regulatory requirements, while ensuring the use of up-to-date technologies in all areas of its business. Alongside this reorganisation and restructuring, it added a few top managers, with prestigious backgrounds and high-level professional contacts, to its team. Again, it’s all about improving the product and service offered to its customers.
The result of these initiatives has been the strengthening of the bank’s business functions, especially in private banking. As Guidi puts it, the idea is to construct “a quantitative model to help the strategic planning department and top management simulate different strategic alternatives” so they can accurately calculate the likely impact on the main financial variables and indicators.
Banca CIS also offers an asset management company, Scudo Investimenti SG, with around 15 different San Marino Investment Funds, including an innovative Modern Art Fund, based on a collection of over 50 works of famous Italian and international artists. This is a medium/long-term, closed-end investment fund, with assets invested in works by well-known modern and contemporary artists (Modigliani, Keith Haring and Fontana among others), which draws on the expertise of prestigious consultant art advisors who attest to the validity of the works and regularly revise their estimated value. Scudo Investimenti plans and provides funds both for private clients and other banks.
In recognition of its strength and professionalism, Banca CIS was named Best Private Bank of the Republic of San Marino by World Finance, one of the most famous international magazines in the world of business and finance, both in 2014 and 2015. It’s an achievement the bank is rightly proud of.
There is a sense, however, that the best is yet to come for Banca CIS. Following the inclusion of San Marino by the Italian Ministry of Finance in the list of countries that allow an adequate exchange of information with the Italian Tax Authorities, San Marino is now negotiating agreements with Europe regarding the same exchange of information from 2017 onwards. This ultimately will result in several economic, fiscal and social reforms. Alongside these negotiations, there have been proposals towards an association agreement between San Marino and the European Union. What has particularly caught the attention of investors are the fiscal incentives approved by the government aimed at establishing new companies in San Marino. These incentives would obviosuly be hugely attractive to foreign investors.
“Today,” says Guidi, “we are part of a global community and San Marino, thanks to its geographic location, its centuries-old history and, above all, its banking and entrepreneurial assets and background, is able to take up this global challenge. We are convinced that there is a large number of potential investors in the world interested in the opportunities offered by our country”.
And this belief underpins the bank’s ambitions for 2016. As Guidi explains, “the main objective of the Bank is to completely exploit the economic potential through improvements in efficiency and further injection of high-skilled resources”. As a result of the European Union’s commitment to strengthening relations with microstates and better integrating them into the European single market, there are stronger relations between institutions in Italy and San Marino, which will inevitably produce new commercial opportunities within the Italian economic system. It is Banca CIS’s view that this new potential for cooperation with foreign financial institutions will ultimately benefit San Marino and other countries.
Closer relations and easier cooperation between countries will make it easier for financial institutions to better serve their own customers, and it will also better enable them to offer a wider and superior portfolio of products and services. For instance, as of now, San Marino’s investment collective scheme can’t be distributed as a retail product abroad. The thinking, though, is that these initial agreements with Italy and Europe are just the first steps in a much larger process. The hope is that these agreements will build a platform for new and greater opportunities in the years to come.
