The strategic commitment of the most dynamic banks to digitization is played out in several areas: the competition for talent, new technologies, the creation of their own fintech companies, agreements with startups, etc. The success of this strategy, which aims to improve customer experience, cannot be measured in the short term.
"The world has changed. That affects all businesses, and especially the banking industry, " said Manuel Moure, Digital Products Manager at BBVA Spain, said at the seminar entitled 'Sectoral Opportunities in Digitalization and Innovation', organized by the newspaper Expansión. He made it clear that traditional banks have to change: "This business was characterized by high entry barriers, but now they have been lowered and there are new players that are more dynamic than we are."
Technology aside, European regulation - and specifically the upcoming implementation of the PSD2 directive - also creates a much more competitive environment. Thus, the traditional banking sector, with a higher or lower degree of dynamism, is immersed in a digitization process in which the fintech companies - financial startups characterized by their use of new technologies - play a major role.
Fintech companies and banks compete, but also collaborate. As Benjamí Puigdevall, Managing Director at Caixabank Digital Business, says, "the fintech ecosystem is finding its balance model in a mainly cooperative model, since it is a 'win-win' situation for everyone, new competitors and traditional banks alike."
So the point is to find ways of collaborating with fintech companies. But what are they?
There are many ways, Moure said. As examples, he pointed to some of the most significant BBVA initiatives, such as Open Talent and Propel, the venture capital firm that manages BBVA's investments in technology startups from London and San Francisco.
Regarding Open Talent, Moure explained that it is a tool "to discover startups in an initial state, where we discuss ideas and try to understand what value they can offer." In addition to a providing a meeting point between BBVA and the startups, Open Talent is also the principal fintech competition in the world. The most recent winner was Change, an Israeli company specialized in artificial intelligence.
How to measure the success of these commitments? Both executives agreed that it has nothing to do with immediate economic return. "The experience is positive if it ends up improving the digital experience of the customer", summarized Puigdevall. With Propel, Moure explained, "success is not to multiply investment return with a quick sale of a shareholding in the company. We want to learn, but not necessarily by including the companies in which we invest in BBVA's strategy."
Technologies that are knocking on the door
The banking sector’s commitment to digitalization moves in several directions, while also taking into account the foreseeable future of technology. Javier Martínez, Sales Engineer Manager at Google Cloud, pointed to the current rise of machine learning, "and in the coming years the wave of the internet of things will arrive, with the sensorization of virtually all the objects surrounding us."
Society, said Moure, has entered "into a new age, the age of data; we have to find out how to use it to really help our customers." BBVA already offers products on the market that show that big data can improve the banking user experience, such as BBVA Valora, a tool that allows users to calculate the most appropriate price for buying or renting a home; and Bconomy, "a tool that helps the customer to better understand their financial health."And it goes on and on: "We are assessing how to improve customer experience with new technologies such as machine learning," explained Moure.
La Caixa is also advancing in the implementation of artificial intelligence in its business, based on the premise that "a comprehensive change in the relationship with customers is going to take place," Puigdevall said, starting with voice-controlled personal home assistants such as Amazon´s Alexa, or Google Home.
BBVA already offers a facility for sending money to other mobile devices via voice command. For IPhone users, it can be done via Siri, Apple’s virtual assistant; while owners of other smartphone brands can use the Chatbot function, which works on messaging platforms such as Facebook Messenger or Telegram.