The Transformation of a Bank into a Digital Business

Beatriz Alonso Vision&Values

Last week, The Economist, one of the world’s most respected publications in the economic sphere, has written up an article on BBVA Group, entitled “BBVA, A Spanish Bank, Reinvents itself as a Digital Business”.

Throughout the text, describe the initiatives that BBVA, as a global bank, is carrying out to become the bank of the future, and the reasons why it wants to become one. In this respect, BBVA’s Chairman, Francisco González, highlight that sooner or later the giants of the Internet (Google, Amazon, Facebook) will be BBVA’s main rivals, because “the digital world doesn’t allow many competitors, in 20-years the ranks of banks worldwide could be thinned from thousands to dozens, which will need scale to survive. Wariness of regulation may delay the e-behemoths, but not for ever. If you are not prepared for this precise moment, and you are not as efficient as they are, you are dead”.

At BBVA Data & Analytics, one of our main missions is to spearheading this transformation into a data-driven business, and we are beginning to realise that what was once a future vision has become a reality.

When BBVA started the journey towards digitalization, almost ten years ago, data became a golden asset that many aspired to exploit but only few knew how to take advantage of. BBVA’s digital interaction with its customers through multi-channel applications, gives voice to the needs of the users we serve: provided a rich and constantly updated source of information that could help the Bank develop products and services tailored to the specific needs of the customer, leveraging advanced analytical methods and technologies.

The main feature of all the developments that the entity has recently embarked is to provide the customer with the ability to make better decisions based on their own data.

A good example is Commerce360, launched just over a year ago, whose main objective is to put in the hands of SMEs, analytics that help them understand what happens around their business and how their customers are. Previously, this kind of analysis were only accessible to large companies.

In the same way, recently has seen the light Bconomy, a diagnostic tool on financial health based on an analysis of fixed and variable expenses and customer savings, which, in addition to all this, includes other tools that BBVA makes available to its customers such as “My Day to Day”, “My Budget”, “My Objectives” and a new functionality added personal benchmarking tool called “Compare yourself”.

From 2018 onwards, the EU’s new Payment Services Directive, known as PSD2, will require the opening of data of those customers who demand it and authorize it to third parties, to facilitate interoperability and portability, as main objective, triggering competition between banks and also with external agents. For BBVA, this is more an opportunity than a threat.

The publication also highlights the processes involved in these developments and the agile methodology that defines them, in Derek White‘s own words, global Head of Customer and Client Solutions, the idea is to replicate the nimbleness of financial technology startups (fintechs) at large scale.

“When a project is conceived, a small group is assembled to work on it within three days. A prototype is created in six weeks. The finished article should be “en los manos de los clientes” – in customers hands – within nine-months. The quarterly cycle starts with a planning session to thrash out priorities. It ends with a demo-day, start-up style.”

If you want to read the full article in The Economist, you can do it through this link.