Banco Bilbao Vizcaya Argentaria, S.A. (BBVA)
Digital Transformation Case Study
If banks cannot truly be customer intimate, they are doomed to be just dumb commodities, acting behind the scenes, like utilities.
To have a full perspective on the term “digital transformation”, it is necessary to understand that the process is human-centric: it is delivered by human force and in the same time, it aims to satisfy human needs in an easier way.
So as for any other branch, the rule applies in the finance sector also – without diving into the digital transformation process, banks are risking their business to become outdated and not fully utilized.
Realizing the threats that were coming from the technologically superior companies, multinational Spanish banking group BBVA took the first steps towards the digital transformation in 2007. In the last decade, they managed to raise their reputation as one of the strongest online banking companies, having the 19% increase of the new customers on a yearly basis.
It was the more than obvious acquire of the end customers to access the services and products through digital channels; it is expected for the number of the mobile phone users to pass 5 billion by 2019, which requires service providers to adapt their business models to the new needs.
It took almost 6 years to BBVA to create a technology platform that would work for their transformation – from the traditional way of banking, they headed the journey with the root changes: processes and culture that were inborn survived the upgrade that changed the way BBVA was thinking and delivering. The crucial human-resources-related changes made a basis for the next step: technological advantages were about to hit the customer needs – the usage of the real-time analytics combined with big data made the transformation of the core business more efficient. The innovative systems were customer-oriented and had a task to build new high-quality relations based on the statistical data.
However, how does one transform himself into a digital leader? Is it very smooth as it sounds?
BBVA would say it is not, we guess.
It took the long-term commitments to make the radical changes, but still keep the identity; it was the decision that had to cut off the old way of thinking and replace it with new data brought to satisfy the needs of today.
“BBVA will be a software company in the future,” it was said by BBVA chairman Francisco González, and the path to there is certainly grounded with the technological platform which operates in real-time. To make it more approachable, the platform is modular, having several different branches helping the customers accesses it online. The business model is focused on the mobile users, so as it is stated: the number of BBVA mobile users ended with 4.3 million at the end of 2014.
Furthermore, no digital bank could operate without the strong cybersecurity systems – the dedication of IT teams lead to the forming of another service named BBVA Wallet, which gets to represent one of the most-used cloud-based NFC payment apps. The service was enabling BBVA to become the first bank with the payments over smartphones allowed – the technological upgrade gave the chance to the users of Android to make the payments without using the NFC sticker, but with simply placing their smartphones near the POS without the need for the physical contact: simplicity at its best. To compete with the other providers of similar services such as PayPal, Google Wallet or Apple Pay, BBVA added another functionality to their Wallet: Mobile Location Confirmation (MLC) underlines the digital path with even more strength. Oriented to the customers’ needs while moving, the one who enrolls in MLC enables the bank to get the exact information on the location of the cardholders’ devices at the time of purchase – the customers get reassured into the security of their debit cards usage whenever they travel.
So what is the recipe for the successful transformation of the traditional finance company into a digital giant? Where is the border between a bank and an IT company delivering financial services? Will the future erase the limits? The customers’ satisfaction and the simplicity of the interaction is a must-be nowadays; if that is to define the path for a company to take, then BBVA would say – walk the road and digitalize your chances.