"We need to get our act together to create consistency in data regulation across the world"
BBVA Chairman Carlos Torres Vila has told the biggest start-up conference in Spain that authorities around the world need to take action to unlock the true potential of data.
Speaking at South Summit in Madrid, the BBVA leader called on world regulators to address the increasing asymmetry surrounding how data is managed to ensure the digital-based global economy is able to prosper.
The Chairman highlighted the importance of data sharing to negate the impact of network effects in big tech business and to promote productive competition.
Torres Vila also explained how innovation makes the world a more sustainable place, adding: “We can really progress as a society to solve problems – old and new – including ones associated with making the world a better and more sustainable place. I think innovation – and the innovators here today – can have a real impact on solving that problem.”
Torres Vila began the data discussion by noting that the use of this resource in business was not new, for example financial services companies had used data to make decisions on things like underwriting for decades. He also explained the positive impact data usage had on BBVA itself, outlining how BBVA’s use of data in things like its mobile banking app – which he noted had just been named the world’s best for the third straight year – had dramatically increased the banks Net Promoter Score. This, he said, was linked to how you use data to deliver more personalised services that help customers make better decisions in support of their goals. He also highlighted how the bank was going to cross the tipping point of digital sales sometime during 2020, noting how digital sales were now at 44 percent while they were at 10 percent three years ago.
He added: “Clearly, data is exploding. And we're in the data revolution. It's affecting every business all the time, every business, more and more as we go forward. But there is quite a mess in terms of what the rules are for using data in business - and because that is so critical for every business, I think we need to get our act together at a global level and really develop a consistent set of rules worldwide.”
He stressed that the advance of digitization had brought with it a huge increase in the frequency and scope of data being created. But with that had come the emergence of dominant digital ecosystems that benefit from strong network effects and a subsequent gatekeeper role.
BBVA Chairman Carlos Torres Vila during his intervention at South Summit.
He said: “Right now, it's not being shared correctly. It's not even explained correctly and the way rules are set now it will lead to huge network effects, gatekeeper roles by companies that will continue to concentrate power instead of introducing competition.”
He added: “So regulation is very necessary to ensure that there is a level playing field, and that we mitigate the potential negative effects of concentration because of this positive network effect. Now, right now, we have quite a dispersed set of rules. More than 100 countries have passed data regulation rules, but they're different, even within the same country, they are different”.
“And that creates a lack of customer protection and a non-level playing field. There is an asymmetric reaping of the benefits of data between the customer and the service providers and we need to change that.”
"The bank is going to cross the tipping point of digital sales sometime during 2020"
Asked by Spain Startup CEO Maria Benjumea what was now needed to manage this change to ensure everyone could take advantage of the data resource, Torres Vila said that unlike, say oil, the same data sets can be used over and over again in different ways to generate different sets of value, insight or ultimately products and services.
This mattered even more in an era when industry lines and geographic lines were blurring, and where customers, who are actually the creators of the data in many cases, expected to be able to contract services from wherever suits them best. More than that, businesses needed to recognise that it was the customer’s data - not theirs simply because they collected it - and that as the customer’s data, with the right consents in place, it should be allowed to flow freely across sectors.
Asked by Benujmea how in practice that could work, Torres Vila said there was already a partial framework in place that could support this. He said: “In some sectors, like banking in Europe, we have pieces of that regulation, for example we have the payment services directive that mandates that customers transaction data for the last two years, is accessible through API's in a standardised format, real time by registered payment providers. It's a great idea. “This should be extended not only to transaction data, but to all data. And it should be extended not only in banking but to all sectors, telecoms data, purchases, online, ecommerce, travel, anything.
Maria Benjumea then challenged him on how he thought regulation could work in practice, especially given, as he had noted, the diminishing importance of geographic barriers. The BBVA Chairman conceded it was tricky, and that divergent geopolitical interests made it tougher, but he also stated he was positive things could be done.
He said: “I'm quite optimistic that data regulation could follow the same path that trade did 30-something years ago, so we're doing our best for sure to try to influence policymakers in Europe and around the world to push on this direction.”