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How, where and why would you build the digital bank of the future?

It might seem like a strange question to be asking, but given the multiple elements that drive the success of a bank, and given also that increasingly location is a key determining factor in how you deliver great customer experience, its an important topic.


At Money20/20 in Las Vegas this week, it was also a hot area of debate driven by BBVA and fintech banking experts 11:FS - and what follows is a short summary of the debate. On the Leadership Loft stage at the conference in Nevada, BBVA and 11:FS brought together two teams of experts to decide - supposedly once and for all - where is the best place to start a new digital bank.

The elements being looked at were infrastructure, data, regulation and user experience, with two teams representing the U.S. and Rest of the World (ROW) fighting it out for supremacy. Representing ROW were Derek White from BBVA, Melissa Guzy from Arbor Ventures, and Megan Caywood from Starling Bank in the U.K. Representing U.S. were Dan Kimerling from Deciens Capital, Ron Shevlin from Cornerstone Advisors and Jill Castilla from Citizens Bank of Edmonton.

The debate kicked off with the issue of infrastructure and where in the world was more favourable to build a digital bank.

On behalf of the ROW, the argument was made that while only a couple of banking licenses for digital banks had been issued in the U.S., across Europe and Asia it was a very different story with numerous banks now operating, such as BBVA backed Atom in the UK.

For team U.S., they countered that going forward the U.S. would become easier, and it had the money and partners ready to support the building, but acknowledged there was one other fundamental difference. And that was the build is often done independently in the rest of the world, albeit with investment into it, however in the U.S. it frequently involves a joint build with an incumbent.

The use of data

The next area discussed centred around data and where this ubiquitous resources was best used. For the U.S., the argument was that the country has pioneered data through the likes of Google, Facebook and Amazon, and was ideally placed to use that expertise to drive forward the future of digital banking.

But countering for the Rest of the World, BBVA's Global Head of Client Services, Derek White said in his view, Asia and Europe were light years ahead of the U.S.. Asked to explain himself, he said: “Here´s the thing. In the U.S., data sits in reservoirs. . .it just isn't used effectively yet.

“In Europe the battle around data is about ownership - understanding that the customer and client own the data and it is the job of banks and others to help the customer use that data in a way that adds value to them. At BBVA, we already do that, not just through our app or products like Valora, but in the way in which we actively open up APIs to facilitate wider user and marketplaces - which is the way it should be.

“Then in Asia, its another model as well, it's about interactions. The WeChat model is just one example, where data drives interactions which drives services which drives more interactions and so on.”


Turning to regulation, the battle here was more close, with team U.S. citing the different regulatory approaches. For example, while sandboxes were needed in Europe to test products ahead of launch, in the U.S. they said the regulators allowed more flexibility negating the need for the sandbox environment.

However what all the debaters agreed was that globally, there was a need for a more unified and joined up approach, especially when it came to dealing with money and data in the same way.


The ROW team picking up their award: Melissa Guzy (Arbor Ventures), Megan Caywood (Starling Bank), Simon Taylor (11:FS) and Derek White (BBVA).

User experience

Last up was user experience. Here, opening for team ROW, White said that this really went to the heart of the matter, because as the battle for interactions, and ownership of data developed further, the user's experience would define the engagement rates of the digital banking platforms on offer.

He added that BBVA’s banking app, awarded by Forrester as the best banking app in the world for the second year in a row, exemplified this approach and why ROW was the best. “For BBVA it starts with identifying what customers actually want to do in banking, then making all of it available DIY on the app. Making the customer effort minimum, making it available whenever, wherever and however they want to do it, and then making the interactions people have on the app smart and absolutely relevant to them, all wrapped in a beautifully designed package. That focus on the customer experience is why, I think, Europe and Asia are ahead of the game,” White said.

At the end of the session the decision on how and where the best place to build the bank of the future was, was put to the audience, and the winner was, to the dismay of the U.S. audience (well sort of). . . . rest of the world.

Simon Taylor, co-founder of 11:FS and host of Fintech Insider, summed it up saying: “There's a giant opportunity for someone to do digital banking great in the U.S. at the moment, and it might come from challenger banks, it might come from community banks it might even come from outside the industry. But what we are seeing is that currently, the digital banking scene is more developed in the UK, Europe and Asia than it is here.”

To hear the full debate, make sure you check out the 11:FS Fintech Insider podcast which will be live on Monday.