Data is often cited as being the new oil when it comes to the question of what is the world’s most valuable resource.
Yet for BBVA’s CEO Carlos Torres Vila, that assertion fundamentally misses the point.
Because, as he explained to pack audience in a keynote address at Europe’s biggest fintech conference today, it's not about the data itself, but rather about what you do with it that creates the real value and the opportunities.
The bank’s Chief Executive was addressing more than 3,000 people at Money20/20 Europe, this year held in Amsterdam, on a theme of 'How Data will change the world, again'.
He started by outlining how for him, the real value in data lies not in its intrinsic value, which unlike oil is practically nothing, but solely in the value you derive from analysing the data and then how you personalize that analysis to build customer specific services.
However, therein also lies a fundamental issue that needs, he said, careful management.
The challenge is that the data market is prone to huge information asymmetries that have been successfully exploited by the big tech platforms. Big tech has, historically, been great at linking together diversified data sets, from closed systems, and without necessarily the owner of that data being aware.
He said: “From a competition standpoint, data is an essential input in certain activities - personalized advertising, credit scoring, insurance, for instance. However, when a business has been built on exclusive access to a certain dataset, it will likely be disrupted at some point. Competitive advantages must be built on how we generate value on top of that data.”
Carlos Torres Vila was then asked, by interviewer and former CNBC reporter Louisa Bojesen, how the usage of data will progress in the future.
BBVA’s CEO Carlos Torres Vila and journalist Louisa Bojesen.
He said that one thing BBVA was working on was the idea of a personal data bank. BBVA's view, he said, was that it starts with the firm belief that data fundamentally belongs to the customer or client. The bank’s role, he continued, was to work hard to protect that position and to build out business models where this didn't contradict.
By way of an example, Carlos Torres Vila cited recent scandals that had beset other big businesses, especially around privacy, and particularly where companies expect the consumer to hand over their data for free, with access to that company’s service given in return.
"There is an opportunity to expand the trust that customers deposit on banks to safeguard their money to manage their personal data"
He said: “We believe that privacy is a fundamental human right, and the price for any service should never be your privacy. If you opt out, that shouldn't mean you are shut out.”
Equally importantly, BBVA's CEO said that while some people have argued that EU regulators have come down hard on industries with the implementation of GDPR and PSD2 in Europe, his view was the reverse. He said his view was that the regulatory bodies had also recognized the right to privacy - and the directives were a starting move in that direction.
He added: “In Europe we have the GDPR provisions and we are a big proponent of that and believe it is the right way to go. But we also think this needs to be extended to cover all sectors and all geographies. Currently there simply isn't a level playing field - for example while other industries will be able to access the data that banks protect for people, banks can’t access it the other way, and that prevent people getting the true value from their data.”
Trust and real value
Lastly, the session then discussed BBVA’s vision for data and how it intends to use this resource in the future. BBVA’s CEO said it starts, quite simply, with trust.
The bank’s vision was firstly to leverage data to provide the best solutions for its customers and clients. Secondly, that using this data required ongoing consent. Thirdly, that based on this consent, BBVA would then be able to provide actionable insights for customers - ensuring their data added real value to them, either in terms of helping with decision making, or making money work harder for them.
Asked about what that meant in real examples, he said if you look at products like BBVA Valora –which allows customers to explore the area around a house they are thinking of buying, look at upkeep costs, insurance, real time valuation comparisons– these are products built on data analysis and delivered because of consent.
However the trust that this generates, by always putting the customers needs first and working on their behalf, is what will enable the bank to grow and do more for people.
Asked how it develops further he added that there is an opportunity to expand the trust that customers deposit on banks to safeguard their money to manage their personal data in their own interest. BBVA believes that data belongs to the individual, and that will mark any future developments, he said.