Carlos Torres Vila: “Banks played a key role during this crisis, amplifying the impact of public funding”

Carlos Torres Vila participated in a round table with José María Álvarez-Pallete, Chairman and CEO of Telefónica, and Helena Herrero, president of HP for Spain and Portugal. In his address, BBVA’s Chairman focused on the digitization of SMEs in the context of the recovery and reconstruction of the Spanish economy after the pandemic.

Torres Vila stressed that small businesses and the self-employed, responsible for two out of every three jobs in Spain, are bearing the brunt of the unfolding crisis. In the short term, authorities have focused on the measures rolled out to alleviate companies’ financial burden and safeguard the jobs of their employees, as is the case of ERTEs (furloughs) or ICO loans. “The role of banks has been pivotal, not only amplifying the impact of public money, but also aligning targets. We have leveraged banks’ risk assessment capabilities to ensure that money is adequately used, and devoted to guarantee loans,” he explained.

However, in the medium-term, now is the time to “increase the competitiveness of the Spanish business fabric,” especially among our SMEs, which face this new scenario riddled with significant weaknesses. For Torres Vila, the pandemic has shone the spotlight on the need for a more inclusive social and economic model. “We need to quickly embrace inclusion, diversity, sustainability trends, and the shift towards a new productive model based on new technologies," such as cloud computing and the efficient use of data,” he noted.

Carlos Torres Vila explained that SMEs can benefit in many ways from digitization, and that this should be their “top priority”. For example, he indicated that “it allows them to access more markets and deliver value-added services to customers, as it opens the doors to a world that, until now, it was very hard for them to tap into.” Also, it reduces intermediation costs and allows companies to integrate with each other, for example, through e-commerce platforms. Digitization also allows boosting the efficiency of productive processes and cost flexibility. For example, “cloud computing opens up a new world, but it is a field in which small businesses are clearly lagging,” he explained. In 2019 more than 60 percent of large companies (excluding those in the financial system) consumed a cloud service, while only 21 percent of SMEs did so. In contrast, in the Nordic countries, this figure stands at 55 percent for SMEs. “We need to focus on helping SMEs ride this wave, through a combination of reforms and investment.”

And this will require the proper regulations and level of investment. An to attract investments it is essential to build trust, which is achieved through legal certainty, institutional stability and efficient taxation systems.

BBVA’s Group Executive Chairman also stressed that Spain needs to play a role in data regulation. In this sense, he argued that users should have greater control over their data, while allowing data to flow between businesses. “We need to allow users to leverage their data in their own benefit, allowing also SMEs to exploit them to deliver value-added services,” he said.

Digitalization, a priority for businesses

In short, he explained, digitization should be a priority for businesses – especially SMEs – and any progress in this sense also depends on public investments and the amplification effect derived from private initiatives. “Now that we have a one in a lifetime opportunity to invest €140 billion from the funding provided by the ‘Next Generation EU’ program, we need to rely more and more on private initiatives to increase this money by a factor of ten or twenty,” he explained.

“I believe that we, as large enterprises, can help SMEs a lot. This is something BBVA has been doing for quite some time," he explained. For Torres Vila, OneView is great example of BBVA’s progress. This one stop solution allows users to access aggregate financial information from all the banks accounts they hold with partnering institutions and also provides companies with estimates on their carbon emissions. Carlos Torres Vila also mentioned Open Banking, the API development platform that allows companies to build new digital experiences for customers and suppliers, and BBVA Compartiendo Conocimiento (Sharing Knowledge), a platform through which BBVA employees and leading experts offer insights to help companies, SMEs and freelancers overcome specific issues and find solutions to boost their business.