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“Transformation and disruption. Are we evolving fast enough?”


BBVA | New Digital Businesses | We're Banking on Disruption
Eduardo Garbayo, Director of Strategy at the NDB

I recently had the privilege of taking part in a “MoneyLive” panel, an event that brought together strategic leaders to analyse innovative trends in the world of finance, and to explain BBVA’s vision of disruption.

As with Darwin’s theory of species, it is not the strongest of the companies that survives nor the most intelligent, but the ones that are most adaptable to change. Numerous indicators show that the rate of change is accelerating and the leading companies don’t lead for as long as they used to.

Over the last five years the list of the most capitalized companies in the world has changed radically; seven of the top ten companies are now big technology companies. These big technological companies are amongst those investing most in innovation, building platforms, and attempting to conquer each and every area of people’s lives, with the consequent dis-intermediation of the service companies; among them the banks. The banks are at great risk of losing their direct relationship with their customers, although new business opportunities are opening up for banks capable of becoming the major global partners of large ecosystems.

Finally, the banks are subject to wide-ranging technological trends (artificial intelligence, blockchain, quantum computing, etc.), as well as changes in people’s lives (the shared and decentralized economy, the ageing of the population and new models of interaction, like Fortnite, which has changed the model of youth interaction), economic, geopolitical and regulatory trends and so on. All of these can drastically change the rules of the game in banking and the banks have to be ready to address them.

“How ready are the banks to adapt to the changes in the ecosystem?”

At BBVA we have two levers to deal with disruption of the environment. Firstly, internal transformation, which is proving very successful: improving and digitalizing our subsidiaries’ operations with retail customers, using four pillars of transformation, as well as with our enterprise clients. The second lever involves “reinventing BBVA from the outside”. This is the mandate of the NDB, the New Digital Business unit headed by Ian Ormerod. The NDB builds, partners, investsand acquires, and manages a portfolio of start-ups and digital companies. Its aim is to build the bank’s long-term future, by test and scale new disruptive business models, attract new customer bases, test new solutions in the market to respond to new trends and technologies. It brings the skills and knowledge obtained from the ecosystem to the rest of the bank, thus contributing to the acceleration of its internal transformation.

Throughout this journey at BBVA we’ve learnt to create and launch new start-ups like Azlo, Covault and Denizen, with the implications in processes and incentives required to build and test quickly in the market, and to understand the importance of attracting and retaining entrepreneurial talent. We are becoming a reference for digital companies and a renowned investor within the entrepreneurial community. Finally, we are learning to extract value from our investments beyond financial returns, capitalizing on our participation in the ecosystem to accelerate our internal transformation. This journey, embarked on by the NDB, and the internal transformation process, have turned BBVA into a company in an on-going process of change.

In the words of Jack Welch, “if the rate of change outside exceeds the rate of change inside, the end is near.” Are we evolving fast enough?

Eduardo Garbayo is Director of Strategy at the NDB, the BBVA unit responsible for dealing with disruption of the external ecosystem. Eduardo had the opportunity to present this vision at MoneyLive Spring 2019 during a panel discussion titled “Transformation VS Disruption. Are we evolving fast enough?”

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