David Puente: “The use of GenAI could prove even more disruptive than digital transformation”

Puente helms the Client Solutions units in the different geographies in which BBVA operates, working alongside Group-wide areas such as Marketing, Design, Behavioral Economics and Advanced Analytics. There also happen to be exploration units that work on a more long-term horizon, such as the Digital Assets Unit and BBVA Spark, which specializes in high-growth companies.

As Puente sees things, the culture of innovation built into BBVA’s DNA is the differentiating factor that will enable the bank to remain on the cutting edge of digitalization and develop a new value proposition increasingly focused on the client.

“Every interaction with a customer is a test and we must aspire to earn an ‘A’ every time,” remarks Puente, who sees technology as the right tool to continue growing and surprising the market.

Q: Throughout your career at BBVA, you’ve played a key role in developing the BBVA app. What do you like most about it?

A: As soon as I start talking about the app, I can’t stop! First and foremost, it’s the best in the world. The mobile app is the most visible and tangible piece of the Group’s transformation journey. When we approach digital transformation, we do so with two key objectives in mind: transforming the value proposition and transforming the customer relationship model. We wanted to build a different experience. And the cell phone went right to the heart of that. It has evolved a lot since then. If I had to pick out one thing, perhaps it would be the quality of life features. For example, when it’s the end of the month and it’s time to pay the rent for my parking space, the app alerts me and shows me the regular end-of-month transfer I need to make. But the thing I like most—and we owe this to the app—is that when I’m having dinner with friends or just chatting about stuff, it’s the first time they've expressed genuine surprise and spoken very highly about the bank. This positive talk has been all about the cell phone experiences we’ve been developing, and that makes me feel pretty good.

Q: How do you plan to stay ahead of the field when it comes to innovating in financial services?

A: Innovation has allowed us to lead the transformation of the financial industry in recent years: we were pioneers in banking digitalization processes, our global app has been considered the best in the world for several years now... This leadership has made us a benchmark within the industry in the use of new technologies and data to offer a better service to our customers. These achievements are only possible when innovation is not the exclusive domain of a specific unit or area, but permeates across the entire organization and each and every one of its members embraces it. This is the case at BBVA, where we say that innovation is part of our DNA. As long as we maintain this attitude towards innovation, I have no doubt that in the near future we will remain at the forefront of new trends that will transform the financial industry, and therefore maintain a healthy lead over our main competitors.

As things currently stand, sustainability is a much bigger business opportunity than we ever imagined and a fundamental growth pillar for the Group.

Q: We can’t resist asking you about generative AI. What impact will it have on the business and the way we all work?

A: The use of GenAI to hyper-personalize, contextualize and humanize the mobile experience, and to increase productivity across our channels, marks a giant step forward in the relationship model, and in experience and productivity, surpassing even the impact of transforming the pure digital channel.

BBVA is already working on various projects that fall into three main categories: advanced personalization in customer relations, smart automation of internal processes, and maximizing the capabilities of employees without them having to be data experts. All these initiatives are backed by a training plan to teach all employees how to use these new technologies. This will ensure their safe and effective use within the work environment, as we significantly improve innovation, productivity and efficiency in our daily work.

Q: Sustainability is the great challenge that BBVA wants to help overcome for the benefit of society and our clients. What can a bank provide when it comes to products and services?

A: As things currently stand, sustainability is a much bigger business opportunity than we ever imagined and a fundamental growth pillar for the Group. We channeled upward of €70 billion into sustainable business in 2023, twice as much as two years ago and more than five times as much as five years ago.

We are also successfully developing innovative products and services to support decarbonization, which is now the big challenge facing our corporate, SME and individual banking clients. We are accompanying them in this transition by offering specific solutions and bespoke financing proposals. A clear example of this is the carbon footprint calculator, a solution that shows our customers the savings they could make by switching to a more eco-friendly vehicle or using solar panels and aerothermal technology in their homes (we also oversee the installation side of things).

We are acutely aware of the opportunity that decarbonization offers in terms of innovation and growth. That is why we are investing in the most cutting-edge funds in new clean technologies, aka ‘cleantech’. In 2023, BBVA earned, for the fourth year running, the highest rating among European banks in the Dow Jones Sustainability Index.

It is precisely in these geographies where the regulatory conditions are right, and where we think banks have a great opportunity to carve out a strong position within the crypto-assets market.

Q: BBVA is now offering services in the crypto-assets industry, both in Switzerland and Türkiye. Will these services eventually be extended to include other Group countries?

A: At BBVA we have spent more than five years exploring blockchain technology—the technology behind cryptocurrencies— and its multiple uses, from international payments and trade finance, to capital markets with the tokenization of traditional financial assets (money and assets).

As tends to happen with other areas of innovation, in order to unlock the full potential of this technology in such a highly regulated industry as the financial sector, it is important to develop regulations that offer certainty to participants in the crypto-asset markets, thus ensuring investor protection. Countries such as Switzerland have already done so, and the European Union has taken a big step forward with the approval of MiCA, an EU regulation that governs the issuance and provision of services related to crypto-assets and stablecoins. In Türkiye, regulations similar to MiCA are expected to be approved this year.

It is precisely in these geographies where the regulatory conditions are right, and where we think banks have a great opportunity to carve out a strong position within the crypto-assets market. This is down to the fundamental and intrinsic virtues of the banking business, including its ability to comply with regulation, generate trust and guarantee operational security.

Along these lines, BBVA has developed innovative solutions in those markets that present the right regulatory conditions and where there is a growing demand for these services. Examples include the cryptocurrency custody and trading service in Switzerland; or in Türkiye, where BBVA Garanti, through its subsidiary BBVA Garanti Digital Assets, has launched a cryptocurrency platform in the country.

Regulatory and market conditions permitting, BBVA will continue to expand these services to other geographies and propose new innovative solutions in this regard.

Q: One of the bank’s latest big bets has been BBVA Spark, as it looks to offer financial services to high-growth companies, with disruptive models that are not necessarily profitable. As things stand now, what value do you attach to this new endeavor?

A: BBVA has had a close relationship with the entrepreneurial ecosystem for many years. and this has grown even stronger following the launch of BBVA Spark. Now, we can cater to all the financial needs of these companies, from a single place and through an end-to-end solution (online banking, payroll, payments, cards, insurance, etc.). And it goes without saying that we offer financing solutions tailored to their prevailing business needs, depending on how mature the business is.

In what has been almost two years since its launch, BBVA Spark is already present in four geographies (Argentina, Colombia, Spain and Mexico), has more than 1,000 customers and has granted close to €300 million in financing, both for working capital needs and long-term investment projects. It is also the only bank in South America that has a 100% specialized segment for these high-growth tech companies.

This direct contact with the entrepreneurial ecosystem and providing financial services to high-growth companies allows us to learn first-hand about new technological trends and anticipate how they can be used to improve the financial industry’s own processes.

In tandem, we’ve managed to increase our range of services thanks to the agreements reached with the likes of Capchase, whereby its customers can connect to BBVA through APIs with an agile and digital process. Or BBVA Spark Rewards, a new marketplace for tech enterprises where clients can earn discounts and benefits on services such as cloud computing, legal advice or human resources.

BBVA Spark also boasts a team that leads all of the BBVA Group’s strategic investments in private equity funds. In 2023, it continued to focus heavily on positioning itself in high-growth areas such as decarbonization and innovative entrepreneurship.

This direct contact with the entrepreneurial ecosystem and providing financial services to high-growth companies allows us to learn first-hand about new technological trends and anticipate how they can be used to improve the financial industry’s own processes.

Q: Any projects you are working on this year that you would like to highlight?

A: We are closing one strategic cycle but opening another. In the cycle we are now closing, we have made excellent progress in our strategy of bringing in customers to our digital channels, as well as SMEs, payments, companies and sustainability. And the opportunity remains enormous.

Looking ahead to the new cycle, highlights include a cultural and operational transformation program, which is switching up everything from how we behave in all customer service channels (digital and human), to the design of products, processes and communications that impact the client. Every single interaction with a client is a test. And we must aspire to achieve an ‘A’. We have a ton of things to get done across all units of the bank. We need to prioritize them accordingly and get them in our sights. I think it can be once again our next big competitive edge.

Q: Profitable growth is one of the focal points of BBVA’s strategy, thanks to which we have turned digital channels into the main avenue for sales and new customer acquisition efforts. Is there still room to further digital growth?

In the first quarter of 2024, 67% of new customers signed up through our digital channels. In 2023, we captured 18% more customers through these channels than in the previous year. In addition, 79% of our sales are already made through digital channels. These figures speak volumes for the strength of our digital capabilities. At these levels, I believe that the margin for growth compared to other channels will gradually shrink. But not so when it comes to absolute value, where I see enormous potential thanks to our ongoing efforts to improve the user experience across our digital channels and because of how highly our customers value us. This much is clear from our net promoter score, which is a valuable indicator of customer satisfaction and has improved significantly in recent years.

In all these segments and products, revenue capture and revenue growth have multiplied and we have been achieving double-digit compound annual growth rates in all of them since 2019.

Meanwhile, the results of the 2021–2024 strategic cycle have shown that our decision back in the day to focus on customer acquisition was spot on. We also did the right thing in choosing to strengthen our model in segments that generate immense value for the bank, such as SMEs, and to target certain product verticals, such as payments or insurance. In all these segments and products, revenue capture and revenue growth have multiplied and we have been achieving double-digit compound annual growth rates in all of them since 2019. This growth has also enabled us to gain market share in the vast majority of the geographies in which we operate. We will surely continue to pursue this successful approach in the medium run, while reviewing at all times which segments and products we want to focus on.

BBVA continues to target growth, as it looks to accompany and support its customers, wherever they are, both through its own and third-party channels. These alliances are a win-win for everyone involved, because by integrating our range of products and solutions into our partners’ portals and platforms, we get to solve their financial needs while opening up a much larger universe of customers. And the client also stands to benefit because our solutions deliver a much more complete and comprehensive experience. For this reason, we are making major efforts to expand the financial services we offer through APIs. And a prime example of this happens to be Spain, where this business model is generating enormous interest and where, in 2023 alone, 42 alliances were forged with third parties who have made more than 4.2 million calls to our APIs.