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Digital banking Updated: 14 Mar 2018

Can banks be a threat to big tech?

Derek White, Global Head of Customer and Client Solutions at BBVA, took part in Money 20/20 Asia, the landmark event for the fintech sector, where he shared his take on the debate of who will corner the banking business in the future: Banks or Big Tech?

I had the privilege to attend the Money20/20 event in Singapore this week. I had been asked to give a keynote address on behalf of BBVA and chose a topic that was both provocative and yet also important to the future of the industry. The topic was “Can banks be a threat to big tech?”.

It stems from a reaction my colleagues at BBVA and I have been experiencing for a long time, which is that too often the likes of Google, Amazon, Facebook and Apple are said to be the only ones truly serving customer needs.

I remember being at a similar conference in Madrid last year, where the founder of a unicorn – a start-up business that has achieved billion-dollar value – stood up and said the main reason he had started his business was because banks were failing society.

And he’s not alone. Time and again we hear in the press that Big Tech is going to erode the value of banking, that it's only Big Tech that innovates for people, that Big Tech will eat the banks alive.

This annoys me and those I work with at BBVA, because we honestly think it’s nonsense. I’m not saying the banking system is perfect – we are all aware of the implications of 2008 and the impact that has had on people’s lives. And banking and those that work in the sector have had to rightfully work hard at changing a broken system.

But let's also look at some facts: Banking supports more than 18m jobs globally. Extrapolate that out to the average family size, add in the wider family members, and banking supports the livelihoods of more than 100m people around the world.

Even more so, people trust banks with some $52tr dollars each year to save for things that matter to them, to build savings, to fund their children’s education or give themselves a bit of security.

Banks also do what they have been doing for centuries, which is helping the growth of societies by lending – last year providing more than $66tr to people wanting to start, grow, or consolidate businesses around the world.

However, it is right that the sector faces a challenge from the Big Tech players, and I’ll explain where and how that challenge manifests itself a bit later, but the three key things I talked about this week were these: NTS, Trust and i2o.

Needs, time and stress

Let's start with NTS. It stands for Needs, Time and Stress. These elements are critical to understanding how banks and big tech are aiming to help people.

The Chilean economist Manfred Max Neef outlines nine basic needs that people face – affection, freedom, participation, creation, identity, leisure, protection, subsistence and understanding. Many of these needs to some extent are directly met by money, and money’s ubiquity naturally plays some part in the others.

When it comes to time, studies show that roughly speaking the average person’s day can be divided into three lots of 8 hours – eight to work, eight to sleep and eight hours when people are managing their lives, eating, taking part in leisure activities and so on. Recent estimates suggest around 1.5 hours a day is spent on social media – which reminds me of the claim that Netflix says its biggest competitor is sleep!

Lastly, stress. Here a study by GfK of 27.000 people in 22 countries showed that for most people money was the biggest cause of stress in their lives.

I give this background because these three elements make up the backbone of where big tech and banking are starting to encroach on each other’s’ traditional areas of work – the blurring of industry lines.

Interactions to oportunities

For forward thinking digital banks like BBVA the future lies in taking the blurring of these lines and using it to our advantage by playing to our strengths around the core theme of i2o Interactions to Opportunities.

The reason big tech wants to start offering some banking services is because at the moment its model is one of high frequency of interactions, with a high volume of data created, but with relatively low value to it.

Banking on the other hand creates low frequency, low volume, but high value data sets. We can sum this up in the following statistic: 2000 Versus 200 or 10 to 1.

Big Tech gets on average 2000 interactions per customer per year – but someone liking a post on Facebook or searching for a lawnmower on Google is relatively low value data – you can’t monetize it very much.

Banking, on the other hand, gets far fewer customer interactions – but they are typically higher value – both monetarily and emotionally.

However, what both sectors are really trying to do is increase the volume of data they have from customers, so they can help them do more, know more, make better decisions – and in the process derive their own value from it.

Circle of trust

Here though is where banking differs greatly from Big Tech, and it’s something our CEO Carlos Torres Vila has outlined brilliantly. The difference comes down to a circle of trust – who do you trust to manage your data and money best – and we are starting to see across the media a backlash against the way big tech monetizes your data for their profitability, without sharing the true value with you. Equally, criticism of the ways in which they fail to keep that data secure and safe, providing a channel for misinformation.

More than that, though, the circle of trust is about earning the right to do more with that data. If you trust us with some of your spending data, and we save you time, help you meet your needs, and reduce your stress – then you will trust us with more data and the cycle continues. We can help you do more with your data and money – which are effectively interchangeable these days – and you will let us do more for you.


If customers trust us with their data, we will be able to help them meet their needs, and reduce their stress.

There is one further, critical element though. Banks needs to operate in ways that work best for their customers and clients – that use the digital platforms they want to use, that have the levels of user experience that big tech has championed, that are intuitive, adaptable, safe.

So, this is what banks like BBVA have been doing – and was part of the impetus for the digital transformation that our Chairman instigated with such foresight more than a decade ago.

Yet, we also know we can’t do it alone – which is why we work hard to build a wider ecosystem of partners, third parties, fintech start-ups and indeed innovation builders from within the bank – as this graphic shows.


BBVA's innovation ecosystem.

It comes down to i2o – and building ways to have smarter interactions with our customers and clients. This video gives just a brief glimpse into three products that are now live at BBVA – all designed to help with the NTS requirements customers have, to weave in third party data or products, and most importantly to knit together data and money in ways that offer real solutions, real insights, real actionable opportunities.

At BBVA we know that if we use people's data in a cleverer way, we can make things better. For us, that's an interaction. Here's three examples of just how we are doing that.

So, coming back to the original argument – can banks be a threat to big tech? The answer is we have to be.

Again, Executive Chairman Francisco González, has highlighted how the banking sector will contract from 20,000 banks today to thousands to perhaps dozens in the future. Only those banks that adapt to customer needs and become digital companies themselves will survive – like BBVA.

So, it’s not that we want to be a threat to Google by starting a search engine or to Facebook by setting up a social media site. It’s that our evolution – and banks have always been good at that – means that we need to move into the blur and expand our products and services, utilize new technologies, while all the while working to improve the lives of our customers and clients. And that transition means we will need to play into the areas where big tech wants to grow – that, then, is the threat.

Who will win – well, ultimately, and rightly, it will come down to those that use what we provide. In other words, the people will decide.