Technological innovation has played a fundamental role in the digital transformation of Mexico’s banking sector and has brought customers new ways of managing their finances. As a result, it has created the need to connect customers and service providers, and find common objectives that can be translated to a more attractive value proposition. Making this connection will create more attractive investment opportunities within the banking arena.
BBVA Bancomer is at the forefront of this innovation, leveraging its offering with disruptive elements which constantly adapt to new trends in consumer behaviour. The use of technology is causing a shift in culture within leading companies across all sectors, and the banking industry is no exception. Today, banks are approaching consumers with new products and services according to their individual needs, creating fresh appeal with mobile digital solutions.
This ever-changing era of commerce brings with it a new competitive landscape for banks. BBVA now not only competes with other banks but with fintech companies and startups. The biggest challenge for BBVA Bancomer is to change its focus from simply being a financial intermediary and facilitator of transactions, to becoming a “financial companion”, creating opportunities to improve the customer experience. BBVA Bancomer aims to become integral to its customers’ financial development by providing the right products at the right time.
New technologies in the financial industry are breaking the paradigm: the greater the number of branches and ATMs, the greater the market share. Now, the design of new products and services to better suit customers’ needs is the real differentiator among banks. This new emphasis requires elements such as big data to strengthen market knowledge; as data analysis capabilities and the use of cloud computing increase, it becomes possible to analyse consumer behaviour more effectively.
Embracing technological change, BBVA Bancomer has placed special emphasis on the challenge of digital transformation. The bank is using all its channels of interaction to integrate with BBVA Group’s global strategy, a global strategy based on six key points:
The first is related to the evolution and migration of the distribution model of products and services to the bank’s customers from the bank branch to mobile channels. The second key point is to use BBVA Group’s capabilities in terms of product development between countries with elements like the Glomo platform, which allows the development of mobile-based products and their launch to market in very short timeframes. Third, is the reconversion between platforms, transforming data into information, information into knowledge, and this knowledge into an offering of products and services aimed at different markets and customers.
As a fourth measure, BBVA Bancomer is now gearing its customer relationship management policies towards treating each client individually, taking into consideration their specific needs. The fifth key point is based on the vision of new digital businesses, going from the basic concept of financial inclusion to the idea of building the “Bank of Billions of BBVA Group”. Finally, the sixth key point is reinforcement through a single global brand presence.
At the forefront of change Building strategic alliances is key to the future of banking in an era of technological innovation. Fintech companies should not be seen as competition but as companies that offer new opportunities to the financial system, and as companies that can help banks incorporate products and services in a short time and at a low cost. Partnerships, or in some cases acquisitions, can facilitate collaboration and create new payment models, savings and credit products to generate added value for the customers.
BBVA Bancomer is working tirelessly to collaborate with Mexico’s fintech network. The group is implementing a global strategy of open innovation by becoming “the bank of entrepreneurs and startups”, providing an ecosystem of tools and platforms to aid their development. In Mexico, BBVA Bancomer is the only bank of its size helping to develop companies of this nature, working with them side by side, improving their business plans and strategies.
The bank has become a strong supporter of entrepreneurialism by promoting initiatives such as Open Sandbox; an open innovation programme that tests new technologies in alliance with startups. There are Open Talks – one-day conferences where experts highlight the latest issues and trends affecting the entrepreneurial and fintech ecosystem. The Hackathon is an event for entrepreneurs and developers seeking to support the digital transformation of the bank. The API Market is an open global platform of APIs that allows the access to financial solutions in an agile and easily accessible way to third-party companies. Finally, the MindsetLab is an intra-entrepreneurship programme to develop collaborators with digital and entrepreneurial DNA.
Along with these initiatives, the bank is seeking to expand its global reach through BBVA Open Talent – an international competition that looks for the most innovative solutions to support the transformation of the financial sector in
the different countries where the BBVA Group operates. To date, the competition
has attracted participants from more than
80 countries.
Another important contribution for the entrepreneurial ecosystem is the Open Space located in the BBVA Bancomer Tower in Mexico City. It is a meeting point for the innovation and entrepreneurship community to explore, discuss and find new approaches to banking and create an environment conducive to the exchange of ideas and knowledge.
The Open Space is one of the pillars of the bank’s open innovation strategy and, during 2018, it will work on the development of three pillars to achieve an impact on the ecosystem, consisting of strengthening and enriching the local ecosystem, connecting the main business with all the initiatives and establishing a global footprint.
Another of BBVA’s key initiatives is facilitating financial inclusion and ensuring banking reaches all sections of society. BBVA Bancomer uses social responsibility strategies in harmony with focused business models that can be replicated across all the regions where the bank operates – not only regionally but globally. In order to serve those with restricted access to financial services, banks and fintech companies should develop the capacity to gather and process information about this section of society so it may offer better solutions.
Forward thinking
Until recently people failed to recognise the pace of change within Mexico’s financial system – BBVA Bancomer was the only player that embraced fundamental digital transformation in its processes. This places the bank as the Mexican financial institution leading the development of an open and secure banking system, and as one that works alongside customers in their financial decisions, operating through four key drivers: design, data, mobility, and openness.
BBVA Bancomer’s vision is in fostering a series of reforms in the financial regulatory framework to promote the implementation of new digital models and position Mexico as a digital banking leader in Latin America. In this regard, Mexico’s new Fintech Law provides an opportunity for a new generation of Mexican entrepreneurs to gain a foothold in the financial system, strengthening the sector and enabling competition among the different actors in the financial industry. New technologies should be an advantage, driving the creation of digital mechanisms, along with a legislation that will gather the interests of the authorities, banks and companies of the fintech ecosystem.
For BBVA Bancomer, being at the forefront of banking means maintaining the highest security standards, so customers will total have confidence in their daily interactions. It also means supporting customers in their financial management within the branches, through mobile applications and with the development of digital solutions to cover the needs of all segments of the population.
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