The Boston Consulting Group (BCG) recently released research aimed at demonstrating the importance of digital transformation in corporate banking. In the research, BCG underscored the notion that for lasting and meaningful digital transformation, banks need to develop a clear vision for the future of banking, formulate a comprehensive strategy of how they will evolve alongside it, and plan their initiatives accordingly.
In this series, we are taking a look at how BBVA Compass’ digital transformation efforts mirror the four pillars BCG says banks should leverage to have success in digital transformation. In this, the second article, we take a look at the pillar “Leverage the power of data.”
Pillar No. 2: Leverage the power of data
BCG asserts that banks have veritable treasure troves of data, creating a competitive advantage over industry newcomers. In BCG’s estimation, putting this data to work benefits both the customer and the bank, as it allows the bank to present solutions that fit the customer’s unique financial journey, which establishes the institution as a partner, as opposed to simply a supplier.
BBVA Compass
BBVA has stated publicly that the path to success for financial institutions in an increasingly digital world will be access to data - with consumer consent - that helps clients make better decisions about their finances, and allows the bank to become a trusted advisor. To do this, the bank has set it sights on being a data-driven organization, creating a Head of Data and elevating the position to executive management globally and in each country. The unit is headed by Global Head of Data David Puente.
In order to achieve its vision of becoming a data-driven company, the bank has three focus areas - talent, governance and infrastructure.
In talent, the team is focused on upgrading its advanced and business analytics capabilities by investing time and money in heavily training data analysts to become data scientists. It’s a global effort that will result in a global community of data scientists that can generate clean, standardized data and also provide the insight and expertise to turn that raw data into useful, meaningful information by creating the algorithms and models that see patterns and trends in the data and using techniques like machine learning and deep learning to help the business and the customer. From a business analytics perspective, the end goal is to democratize the use of data so each line of business can access and analyze their own data.
In the second focus area, governance, global standards have been established to ensure the right content, quality, lineage and availability of data. The model is decentralized with a network of data owners across the organization that helps ensure the standards are adhered to.
Finally, each country unit will also convert from a traditional enterprise data warehouse -- originally structured and developed to support Financial, Risk and Regulatory reporting -- to its new big data platform. The new platform will provide access to all data in all systems eliminating data silos and with the ability to derive value from massive amounts of data and unlimited types of data in real time.
Taylor: “We can take the step beyond reporting on customer behavior and begin truly understanding their behavior to support them in key financial decisions and life events.
“We are developing tools and capabilities to leverage data on a scale we couldn’t with our legacy platform and workforce,” says BBVA Compass Executive Director of Data Portfolio Management Michael Taylor. “With these, we can take the step beyond reporting on customer behavior and begin truly understanding their behavior to support them in key financial decisions and life events.”
In Taylor’s estimation, big data’s positive impact to customers goes beyond the ability to target specific financial products and solutions for each customer’s unique financial situation, and will enable the bank to identify issues that might arise with their accounts, like fraud, and mitigate them long before it was able to previously.
“Big data works on the principle that the more you know about anything or any situation, the more reliably you can gain new insights and make predictions about what will happen in the future,” Taylor says. “By comparing more data points, relationships begin to emerge that were previously hidden, and these relationships enable us to learn and make smarter decisions on behalf of our clients.”
Next week, we’ll review BCG’s third pillar in a successful digital transformation program: Redefine the operating model.
To read the first article, Reinvent the customer journey, click here.
*Excludes California.