Only banks that become ‘digital houses’ will survive forthcoming disruption – BBVA chief


BBVA chairman Francisco González says that banks need to shed their past and image as ‘incumbents’ and transform into new digital technology companies if they are to prosper in a banking environment dominated by technologically astute competitors.

Speaking at the MoneyConf in Madrid, González said that transforming the bank “is not just a matter of platforms. The big challenge is changing an incumbent into a new digital company”.

He says that BBVA began its transformation journey in 2007 and has had the luxury of a head-start in adapting processes, corporate culture, management structure, and customer innovation to meet the forthcoming challenges.

“We started this long digital journey with bankers, and over time we had to bring in the digital talent and now we have a new ‘hybrid’ class of professionals in the house, which is a blend of the best of banking with the digital world,” he says. “We realised that we alone were not able to go on in our digital journey, so we dedicated a lot of time and management efforts to understand the digital world and fintech in particular.”

An active participant in the innovation ecosystem, BBVA runs a global fintech competition, a VC fund for investing in startups and has taken strategic stakes in a host of new digitally-driven fintech companies and app-based banking startups. More recently BBVA also launched its API Market, which enables data sharing and collaboration with third party companies.

BBVA’s executive chairman stresses that, when venturing into the fintech sector, operations cannot be assessed in economic terms alone; it is essential to learn and allow companies to apply their business model and see how they meet their goals.

Speaking about the outlook for the financial system, González believes that a new league of competitors is emerging, comprised of those few banks that become digital houses, in addition to some technology giants and probably some startups. He warned that many banks will disappear “because they will no longer have the time or the money to become digital players” and we will be in a world with narrower margins of profitability.