Technological highlights from 2019 and a look at the year ahead (Vol. II)

Yesterday BBVA published five interviews with some of the banks tech leaders asking what they thought were their highlights for the past year and what to look out for in 2020. The aim was to take a look at the disruption that is happening across the sector and call out the areas where the digital revolution has had most impact.

Today, in the second part of this two part series, the bank asks five more experts for their views. The focus areas in this article include Open Innovation and the lessons the business can get from entrepreneurs, and how the disciplines of design and digitised brand are impacting the bank. There are also insights from BBVA's data strategy unit as well as the evolution of emerging technologies such as blockchain.

Álvaro Martin: "Customers will demand that companies use their data in a more sustainable, transparent way"

Álvaro Martín is the Global Head of Data Strategy in BBVA Group. He is a multi-disciplinary manager with technology, business, economics and public policy backgrounds. Over the years, he has developed a deep understanding of digital, business and regulatory trends in financial services and led teams with strong analytical skills in different fields and combined them successfully to pursue differentiated strategies.

1. What has been the biggest development in data strategy during 2019?

Even before technology has reached maturity, concerns over whether data and AI can be trusted when deployed pervasively have risen. Deep fakes, fake news, data leaks, discrimination (e.g. Apple Card), mass surveillance (e.g. SFO facial recognition ban) lead to a broader concept of responsible data and AI (Europe has actually produced guidelines on trustworthy AI and is planning to regulate). This involves fairness, interpretability and/or explainability, robustness, security, governance and ethics.

2. How has this, or how will it impact customer and clients going forward?

Trusted companies are expected to make a sustainable use of data, and become more transparent in how they use it to improve their value propositions.On the other hand, advanced data analytics and some humble glimpses of machine learning developments are being already used for product/service personalization and process automation in different industries.

3. Looking to 2020, what potential development excites you the most and why?

Non-technology companies starting to accelerate in the adoption curve of E2E applications of AI (Robot Process Automation or RPA). In 2020 we would see an incremental enhancement of AI capabilities, but probably still not really disruptive developments. As mentioned, the main improvements will be found in relation with personalization of the clients' experience and streamlining of business processes through automation.

4. How will this impact the way in which customers and clients access financial services in the future?

Lower costs and better experience. Given that both employees and customer capabilities will be augmented thanks to the use of algorithms, the cost of certain services focused on decision making (i.e. advisory) will decrease, which at the end could mean the chance to broaden the customer base to which those services can be provided (kind of "democratization" of some premium services).

5. Long term, how do you see data usage heading - if you could peer ten years into the future, what will have changed and why?

Seamless integration of AI capabilities in all types of interactions (H2M, H2H, M2M), with greater privacy and control on the side of consumers. We still need to figure out how to make AI at scale and integrate it across channels in a way that is trust-reinforcing. If we succeed in overcoming the obstacles, we could envision a future in which the relationship between a customer and a bank could be managed by software agents with different degrees of automation (chosen by the customer) ranging from using smart advisory services to totally delegating their finances to the bank's AI+human pieces.

Carlos Pérez: "We hope that BBVA will be thought of as a real digital player"

Carlos Pérez Beruete is Global Head of Digital Sales and Marketing at BBVA. After his experience developing corporate identity and brand strategies in companies such as Deloitte and Ferrovial, he joined BBVA more than 10 years ago. Until 2015 he was responsible for developing BBVA's brand and identity, and in 2018 he became Global Head of Digital Sales and Marketing. He has led the Group's brand identity change strategy, which has involved its unification worldwide and the launch of its new logo, with the aim to deploy a unique value proposition and a consistent customer experience, similar to what customers have come to expect from digital companies across the world.

1. What has been the biggest development in digital sales and marketing during 2019?

For sure it has been launching our new brand. It was a huge project, more than a year in the planning, with in excess of 3,000 people involved, and across all our footprint - so both physical branches, ATMs, and of course cards and everything else we do. But also, critically, our digital footprint too. And really that was the point - the new brand is designed to be more digitally accessible, easier to use in digital channels, and signifies our drive to give customers the best banking experience whether it is online or face to face. Getting that done - and the switch was almost overnight - was a huge task, but super rewarding too.

2. How has this, or how will it impact customer and clients going forward?

The big thing is that we hope customers will view BBVA as not just as a bank but as a real digital player - and one which can provide both financial health and financial advice in their lives.

3. Looking to 2020, what potential development excites you the most and why?

There’s a lot we are working on which is set to come to market in the next year. One of the biggest elements is what we call the Digital Capabilities Maturity Index. What this means is how we continue to evolve the products and services we offer so that people can contract them when, where and how best suits them - with a focus on digital availability. And this will happen for both existing customers, and for entirely new customers too, through our digital channels.

4. How will this impact the way in which customers and clients access financial services in the future?

We believe people are going to keep on using digital channels to interact with the bank more and more. We should create a new way to interact with all our customers to continue to have their trust, as the banking industry has been done since the beginning. A lot of this revolves around how we offer them personalised advice in the way that best suits their working or personal lives.

5. Long term, how do you see digital sales and marketing heading - if you could peer ten years into the future, what will have changed and why?

I think the sector will have changed dramatically, not just in terms of providers (there will be mergers and acquisitions and digital players will almost certainly be more active in the market) but also in how people bank. We expect the trend towards digital banking to continue to grow, but more importantly, we expect banks will have to adapt to be more than caretakers of people money. They will have to become real partners to people, offering advice on financial lives in a really personalised way - specific to the individual or business. And, they will have to start helping people get the most value they can from their data - both financial and non-financial. Our job at BBVA is to stay in front of all of this - to predict and understand where the market is heading, what people will need, and have it ready for them before they even know it.

Carlos Kuchkovsky: "Blockchain will have a significant impact on banking’s becoming even more inclusive and sustainable"

Carlos Kuchkovsky is Chief Research & Development and Technology Officer in BBVA New Digital Businesses. He assembles and leads international teams looking to generate competitive advances by exponential technologies, data and science, working on artificial intelligence, data and privacy, decentralized protocols and quantum computing with academia, startups, tech companies, and research centers.

1. What has been the biggest development in blockchain and DLT (distributed ledger technologies) during 2019?

There are a number of things I would highlight. For starters, the Libra and Calibra announcement from Facebook and its partners has accelerated the adoption of blockchain and the discussion, research and focus of regulators, governments and institutions (public and private) on the impact of CBDC (Central Bank Digital Currency) and digital money.

Secondly, the evolution of maturity of consortiums and permission or federated networks moving to production. In tandem with this, the evolution of regulation and maturity of projects working with digital assets. This includes the regulated launches of STOs (security token offerings) around the world.

I would also highlight the significant growth of DeFi (Decentralized Finance), and Open finance projects, as well as the increase in users and protocols surrounding the evolution of Web 3.0 -an the new platforms, protocol and Decentralized Apps (DApps) this will support.

For BBVA, it’s been a continuous process of learning and bringing those learnings into the business. In 2019 BBVA has continued the creation of capabilities moving from the learning paths and PoC of past years to focus on concrete business value propositions for customers and clients.

2. How has this, or how will it impact customer and clients going forward?

For me there are two real core areas: Firstly, in terms of how banks operate. So we will see improvements in UX and how efficiencies (price, cost, traceability, and programmability of assets) are generated. More than that, it has the real potential to improve accessibility to financial services - and that can only be a good thing.

"Web 3.0 and the convergence of technologies is super exciting and has the potential for a paradigm shift in how the online world operates"

3. Looking to 2020, what potential development excites you the most and why?

The evolution of digital and programmable money projects and digital identity initiatives around the world will allow real integration of money and identity in the digital economy and society, and what we now understand as the internet.

CDBC (Central Bank Digital Currency) has the potential to change the relationships between, banks, citizens, and countries.

Regulated services being able to interact with digital assets, will allow users, customers, and investors to interact with assets with more efficiencies, and allow the creation and use of a whole new kind of digital assets (financial and nonfinancial).

Web 3.0 and the convergence of technologies is super exciting and has the potential for a paradigm shift in how the online world operates.

4. How will this impact the way in which customers and clients access financial services in the future?

It’s really about how the technologies being developed are brought to market to improve the experience of customers - either in terms of specific new capabilities (advisory, personalisation, financing opportunities, new types of assets, etc.) or in terms of speed and efficiency for businesses.

One other area though, I think developments in open finance, DeFi and blockchain use cases will have a significant, positive, impact on how banking can become even more inclusive and at the same time contribute more to sustainability. For example, blockchain and digital assets could scale up sustainability by supporting sustainable finance, providing traceability of carbon emissions and fair value distribution on digital platforms over all the stakeholders and not only overshare holders.

5. Long term, how do you see things like blockchain and disruptive technologies heading - if you could peer ten years into the future, what will have changed and why? 

In 10 years from now we will not be talking about blockchain, but about pure digital society, (Web 3.0) and how the combination of different transformational technologies and science has helped to have a more proper, fair, trust-based and sustainable society based around data and AI.

Blockchain has the potential to disintermediate all the industries, but especially offer everyone access to financial services; and make real the transition from data silos to data atmosphere were all the people could benefit in a trusted and fair way utilising the power of AI.

Anxo López: "We strive to push boundaries and enhance the role technology plays in the future of banking"

Anxo López is the Design Strategy Manager at BBVA's global Design team. Anxo holds a Ph.D. for his dissertation covering the topic of design as an economic activity in the Spanish industry of the 21st century. From his position as a designer doing a variety of projects, he started to care about design as a strategic function. He has taught classes and conferences in places such as IE, IESE, SCAD, IED, ESNE, UAX, BAU, among others. He is a member of the Madrid Designers' Association (Dimad) Board of Directors and a member of the Galician Design Association (DAG).

1. What has been the biggest development in design and UX during 2019?

Defining financial KPIs for the design activity at BBVA. This has been critical because it has allowed us to benchmark the performance of how we design things both with ourselves - to test the impact we have especially around designing for the digital world - but also others, the recognised digital design leaders.

2. How has this, or how will it impact customers and clients going forward?

More consistency across products and services, more speed delivering solutions, less waste from a production perspective. Overall, giving a great banking experience and really pushing the boundaries of how we serve those that bank with us, and the role technology can and will play in the bank of the future.

3. Looking to 2020, what potential development excites you the most and why?

Having global products and services and a working design system. When you look at the world leaders, the Apples, Amazon’s, Google’s of the world, they build seamless globally similar, best practice solutions. As a bank we need to, and are now doing that too using the best talent we have, wherever they are based, to give a more homogenous experience with our products and services.

4. How will this impact the way in which customers and clients access financial services in the future?

Better user experience and a service provider supporting their needs on a regular basis who is able to adapt to changing environments.

5. Long term, how do you see design heading - if you could peer ten years into the future, what will have changed and why?

Less effort on pure production tasks due to UI design automatization and more time allocated to service and product strategy. It’ll be about deeper understanding of customers needs and how we can meet them.

Elena Alfaro: "I would like to see startups scaling up and working in collaboration with big businesses like BBVA"

Elena Alfaro is the Global Head of Data & Open Innovation in BBVA Client Solutions, which functions include the generation of machine learning algorithms that constitute the intelligence behind BBVA’s digital products, as well as the transformation of BBVA’s skills and culture into a data-driven organization. She also leads the Group's efforts to make the most of Open Innovation, both for the Bank and for our partners in the external ecosystem. Before that, Elena was the CEO of BBVA Data & Analytics, the Group’s Center for Excellence in Data Science and Advanced Analytics, position that she held during three years.

1. What has been the biggest development in Open Innovation during 2019.

From the Open Innovation perspective, specifically in BBVA, the biggest development this year has been focused on making a real impact on the business and in the key projects that BBVA is developing, through the promotion of collaboration with fintech startups. We have worked very hard on understanding the business’ specific needs regarding technology, and then on scouting the best solutions to tackle them from the startup community. We have looked inside to find opportunities, and then we have gone outside to find solutions for those opportunities.

2. How has this, or how will it impact customer and clients going forward? 

Thinking of our Open Innovation internal and external customers (business units and startups), we think that the change has been very relevant, not only because the matchmaking has worked much better, but because the whole process has been improved. Now a business unit starts working with a startup in just a few weeks after their first meeting, compared to the +6 months that this used to take us. Thinking of BBVA’s final customers and users, the purpose of all this is to be better and more innovative in the products we deliver and also much faster in terms of the time it takes us to put them in customers’ hands. And here we have also improved a lot and in very tangible ways.

3. Looking to 2020, what potential development excites you the most and why?

Fintech is in continuous evolution and its startup ecosystem is still very vibrant. For me the most exciting potential in 2020 is to see a lot of, not startups anymore, but scaleups, that are ready for business and that have many ways to help a big corporation like BBVA.

4. How will this impact the way in which customers and clients access financial services in the future? 

In terms of specific areas of impact, I think that we will see a lot in the true personalization of the experience, and also in making financial services more and more transparent and easy to use. In the internal process side we will also see a lot in the usage of AI and RPA (robotic process automation) to make them much more efficient and lean.

5. Long term, how do you see Open Innovation developing - if you could peer ten years into the future, what will have changed and why? 

My hope would be that working with the startup and external ecosystems was something natural for all areas and business units, so eventually the Open Innovation function related to identifying needs and finding solutions would be developed directly by them - by the business units themselves - it will become embedded. This does not mean that Open Innovation would disappear, as we will always have areas of innovation, new trends and actors that the core business cannot dedicate time to, and here is where we will continue being helpful for them.