“Recovery from the COVID-19 crisis should be green, inclusive, and resilient. The recovery is not at odds with sustainability; in fact, they should be aligned,” Antoni Ballabriga, BBVA's Global Head of Responsible Business explained at a virtual meeting organized by Finnovating. José Manuel Marques, Head of the Financial Innovation Division at the Banco de España also participated in the forum.
Both men discussed the keys to achieving a successful post-coronavirus recovery, and they agreed on the importance of global collaboration, a continued push for digitization, and the bolstering of the sustainability agenda goals.
The recovery from the coronavirus pandemic crisis presents significant challenges, for both companies and society at large, and these challenges should be addressed on an international scale. "In the current landscape, banks need to be a part of the solution. The banking industry was more prepared for this crisis than it was at the beginning of the 2008 crisis, and we are living up to expectations,” BBVA’s Global Head of Responsible Business asserted.
Ballabriga also pointed out that the pandemic is giving society the opportunity to learn some valuable lessons such as the importance of “paying more heed to science and learning to cooperate globally across all levels.” He also stressed that “it reminds us how important it is to invest in resilience and the value of digitization, an initiative BBVA launched years ago and which has been fundamental in helping us adapt to the current circumstances.” In his opinion, “it is also essential to integrate social and environmental aspects into corporate strategies.”
The pandemic has brutally demonstrated that we cannot negotiate with nature
Along these lines, Ballabriga believes that the sustainability agenda is going to become even more relevant during the recovery process. “The pandemic has brutally demonstrated that we cannot negotiate with nature. In addition, it is teaching us in the short term that the ‘S’ in ESG (environmental, social, and governance) is taking on greater importance than ever before,” he added. In this context, banks will play a key role “when it comes to supporting businesses and customers during the recovery process, helping them become more resilient and, contributing to an economic recovery that is compatible with a sustainable business model.” To achieve this, he believes the crisis must neither slow the momentum behind the sustainability agenda nor jeopardize the commitment to its goals.
Ballabriga also emphasized that the current situation demands that authorities and businesses follow a twofold course of action. “On one hand, a short-term action plan; and on the other, groups of experts working on the medium term, addressing the changes that are needed in order to better respond to future crises,” he explained.
Making a comparison to climate change, he stressed that the current healthcare crisis poses greater short term risks, even if they share some characteristics with the risks posed by climate change. “Both risks are systemic and have far-reaching impacts across the whole of business and industry. In addition, they impact the most vulnerable segments of the population. And both issues demonstrate that a commitment to a long-term vision is required,” he says.
The role of digitization and fintech
Ballabriga believes that the banking industry’s support during the crisis will stretch out into helping businesses improve their digital capabilities. “We need to digitize our businesses in order to offer a single, end-to-end experience; this is where the fintech startups play an important role.” He also mentioned the work BBVA is already doing to incorporate fintech business models into the bank’s value chain. “There is now a world of opportunity for companies in sectors that have until now resisted embracing new business models,” he added.
In the same vein, he stressed that the coronavirus is forcing digital services to rapidly mature in order to adapt to a new context, though it has also demonstrated that some technology-powered innovations are no longer ‘smoke and mirrors.’ “For example, we have learned that remote working is viable,” he explained. Ballabriga believes that in the future this method of work will be commonplace.
The coronavirus is forcing digital services to rapidly mature
José Manuel Marqués, Head of the Innovation Division at the Banco de España pointed out that “this crisis has a lot of elements, solutions, that we can leverage for the climate change issue.” Marqués also shared his belief that "the sustainability agenda will gain greater short term importance than it had before” and he indicated that it will be easier to build a society “upon a sustainable foundation.”
The Banco de España representative also asserted that fintechs can contribute significant value in order to confront new situations that have been shaped by social distancing. For example, he explained that companies that develop collaborative work platforms and help other businesses operate in a digital context will have a big impact. In order to support the continuity of these businesses, Marqués stressed that “it is essential to develop hubs that encourage safeguarded innovation and dialog with regulators, concepts like the sandboxes that should continue with their work once we've gotten past the worst of the crisis.”
Rodrigo García de la Cruz, CEO of Finnovating and moderator of the event, agreed. In his opinion, “fintechs are positioning themselves as a part of the solution to the COVID-19 pandemic, thanks to their online innovation and their ability to create and adapt products and services in record-time response to the crisis.”
According to García de la Cruz, “technology startups, along with financial institutions, regulators, and supervisors, will be key players in making the best possible sustainability-focused reality post-COVID-19.”