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Fintech Updated: 25 Aug 2020

Finance & Tech: Collaborate and Win

In early August, BBVA USA announced it would be one of a few early adopter banks collaborating with Google on a digital bank account to be offered via Google Pay and launched in early 2021.

BBVA isn’t the only financial institution linking up with technology companies. In recent months, Goldman Sachs and Apple teamed up for Apple Card, as one of a number of announced collaborations between finance and tech.

It would seem that tech and finance are figuring out what BBVA has seen coming for years: By collaborating rather than competing, everybody wins.

"Collaborations with companies like Google represent the future of banking. Consumers end up the true winners when finance and big tech work together for their benefit."

I said this in the initial press release announcing our collaboration with Google. But I should clarify that by adding that there are multiple winners in a tech and bank link up, from consumers to banks and tech.

Javier Rodríguez Soler, president and CEO at BBVA USA

Consumers are arguably the biggest winners, thanks to an experience that banks and tech would each be hard pressed to provide on their own. The wins for consumers include:

  • The increased convenience that comes with a single digital platform that allows customers to access their chosen providers with a consistent user experience;
  • Amazing user experiences that leverage tech companies’ years of building solutions geared to them;
  • Complete digital and physical ecosystems that may include the user experience of tech combined with deep financial insights based on a holistic understanding of customers and their needs, a vast network of ATMs, market leading mobile technology and so much more; and
  • The creation of an intuitive experience that enables consumers to better manage their money and feel in control of their finances.

For banks, the wins have long-term future- leaning implications considering tech’s proven ability to understand and add industries to their portfolios. Some of the wins for banks include: 

  • The ability to achieve scale, faster. These technology companies , with their millions of loyal customers, provide a potential customer base that would take years and millions of dollars for financial institutions to achieve on their own;
  • The halo effect of a global  brand intertwined with the bank’s. We know that consumer brand loyalty is strong among technology companies. Banks, which are traditionally more commoditized, benefit by association with them;
  • It’s fair to say that digital experiences are integral to success in the tech industry. They know what their customer wants and needs, and they build it beyond all expectations. As a collaborator, banks have a front row seat to watch, learn and understand how they do it.

Tech companies win by doing what they do best and what has allowed their surge in growth; Focus on improving and enhancing user experiences. Bank partnerships free them from the task of learning a new, highly regulated industry. You can find some of them here, including:

  • Ability to leverage financial institutions’ institutional knowledge. Banking is a highly regulated industry with regulations that are constantly in flux. Banks not only understand regulatory compliance and the legal framework established by various supervisory authorities, but they are specifically staffed to remain in compliance with them;
  • By working with banks, technology companies do  not need to pursue a banking charter to operate, which can be a time-consuming and expensive proposition. Working with a bank allows these companies to focus on their core business, while providing increased convenience to customers and building customer loyalty in the process;
  • Banking services provided in cooperation with a bank give technology companies the opportunity to diversify and serve a new customer need without the heavy lifting.

So the question remains, if everybody wins, why don’t more financial institutions and tech companies work together?

I believe it’s a matter of readiness.

For years, BBVA has said that in order for banks to thrive in the digital economy and keep pace with evolving consumer demands, we must transform from a profitable analog bank into a digital knowledge service business that innovates across industries.

At BBVA, this meant pursuing a variety of strategies, including investing early and often in our core platform to become the first bank in the US with a real-time core that allowed us to provide a full suite of banking and payment APIs, either as partnerships or as white labels to third parties and built on the cloud, which enables the bank to be more agile.

This platform was put in place in the US nearly a decade ago at a cost of $362 million. At the time, it was the first core platform conversion among similarly sized banks in more than a decade. This type of foresight - out of which grew BBVA Open Platform - is a hallmark of BBVA and the reason we are ready to work with a company like Google.

It’s also the reason, despite their many benefits, more bank and tech collaborations haven’t yet happened. Most banks are quite simply unprepared for, or unwilling to welcome, a future where tech companies encroach on what for decades has been impenetrable: their business.

For those that are ready though, a collaboration between banks and tech will benefit both, and it's happening now.