Carlos Torres Vila took part in the ‘14th Banking Industry Meeting’ organized by IESE and EY in Madrid. BBVA’s CEO spoke about how digital transformation reflects on the outside, but originates inside organizations. In the current environment, he believes that banks need to harness the potential of new technologies to create opportunities for their customers. “We think big, not only in the sense of being ambitious, but of being innovative, breaking molds and surprising the customer,” he said.
BBVA’s CEO reminded the audience that, for a number of years now, banks have been facing paramount challenges regarding their profitability, hindered by low interest rates, a reduction in credit and an increase in the regulatory burden. But also linked to their reputation. On this point, he considers that trust plays a key role in the banking business: “Customer trust is, and has always been, the key.”
Customer trust is, and has always been, the key
“We believe that we are in a world full of opportunities thanks to technologies such as biometrics, cloud computing or artificial intelligence,” he explained. In this scenario, “our purpose is to bring the age of opportunity to everyone, and this is the path we need to follow.” In his opinion, the most pressing challenge that lies ahead for the banking industry is leveraging these technologies to create opportunities for customers.
Carlos Torres Vila in the ‘14th Banking Industry Meeting’ organized by IESE and EY in Madrid.
Data are key to creating opportunities
Carlos Torres Vila explained that banks now have the opportunity, not only to solve their customers’ problems related to the infrastructure surrounding money, like they’ve done traditionally, but to help them “make better decisions.” And here, is where technology becomes essential, because it allows institutions to “understand people’s life goals and company’s business objectives better, and we can offer them money management tools aligned with these goals.”
For this, he considers that “data, and the application of technology to data, are the key.” BBVA believes that “data belong to customers” and “customers have to be able to decide who can access them.” The key to use these data is customer consent, said Carlos Torres Vila. And to obtain this consent, it is necessary to earn their trust. In fact, he considers that banks are very well positioned to be not just money banks, but also “data banks.”
Customers have to be able to decide who can access their data
Regarding how data are handled, BBVA’s CEO welcomed regulations such as PSD2, the new EU payments services directive which allows customers to authorize third-party providers to access their bank-held data, but called for similar regulations in other industries. Right now, players from other industries can access the financial information held by banks from their customers, provided that they authorize them, but banks don’t have access to other industries’ customer data.
BBVA’s CEO Carlos Torres Vila
BBVA’s digital ecosystem
Asked about who are the new competitors that banks are facing, Carlos Torres Vila referred to the confluence of sectors that is currently underway. He also mentioned the so-called digital ecosystems, platforms that deliver services across a number of industries, which have become especially relevant in Asia, and which are already offering financial services. In his opinion, collaborating with these ecosystems is essential.
In fact, more and more, BBVA’s customers are operating through digital channels, as an alternative to traditional channels. For example, in September this year, digital sales accounted for almost 40 percent of the Group’s total unit sales. Also “interactions with our customers have doubled since 2016,” thanks to the rise of mobile banking. The bank is also embracing open banking and APIs with an eye to start embedding third-party products into its offering, said Carlos Torres Vila.
Alongside with the external change, BBVA is in the midst of a cultural shift. And a number of levers are supporting this internal transformation: values – customer comes first, we think big, we are one team – of which he noted “their tremendous transformative power”; a more dynamic organization thanks to the implementation of the agile work methodology; and faster development cycles to expedite the roll out of new customer solutions.
Finally, Carlos Torres Vila spoke about BBVA’s responsible banking model, that aims to make a difference in people’s lives. This model is built on four pillars: establishing balanced relationships with customers, sustainable finance, responsible practices with employees and other stakeholders, and investing in the community. One of the most recent examples of BBVA’s commitment it its accession to the UN Principles for Responsible Banking.
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