Commercial success requires an open mind in Open Banking

Speaking at the recent Open Banking Expo Europe conference, Carmen Cuesta, Senior Manager – Enterprise Solutions Strategy, at BBVA, gave a fascinating insight into how the bank are securing their place in the Open Banking customer journey with a multi-faceted approach and an open mindset.

“BBVA’s Open Banking journey started in 2013 when we commenced an initiative to open up to third parties and see how they could introduce innovative services” began Cuesto.”It was so successful, we are now doing it every year in different countries where we have a footprint. Not only have we found innovative new products and services this way, but it has helped us find new talent to bring on board and work within our teams.”

The first steps…

She then outlined the roadmap of development that BBVA have taken on their Open Banking journey over the last six years. “In February 2014, we acquired Simple Bank – a fintech based in Portland, Oregon. They were doing financial services in a different way – not offering products, but offering an experience.  We had plenty of things to learn from them. We wanted them to continue with their roadmap without merging with our brand. We also wanted to be the infrastructure that they needed in order to create their user experience. So, we had to build some APIs in order for them to open accounts, issue cards and move money.”

“The acquisition was the first step towards launching our APIs into the market” she continued. “We first launched in Spain where we had more than 12 APIs. We then repeated the process in Mexico and finally launched our open platform in the US, which is focused on Banking-as-a-Service delivery. We wanted to repeat our experience with Simple Bank and work with other fintechs, but we didn’t need to acquire them all, but to let them build products and services over our infrastructure. This has been interesting for us as it provided a new revenue pool for our bank in the US. It also meant we could enlarge our distribution network because customers coming from partner businesses are also becoming our customers through cross-selling.”

Separating compliance and commercials

BBVA have also chosen to cast their collaboration net further, by joining Red Seas Hub –  a developer portal that many major Spanish banks are involved in from a compliance point of view. “We are trying to develop a high level of interoperability” explained Cuesto. “Joining Red Seas means most of our processes are shared with other banks and we can separate compliance issues from our commercial approach.”

“At BBVA we believe that PSD2 is not just a compliance issue. Of course, we have to comply, but we see a great opportunity to compete. We as a bank also get to deal with data coming from other banks, which helps us know our customers better to give them what they need and create user experiences that give added value. Open Banking requires an open mind. Open Banking is about collaborating with third parties, opening up your infrastructure and showing your assets – that is something that is not always well understood as a bank. Many are afraid of losing business or being cannibalised by those using your APIs. Open Banking is about much more than launching API platforms, or trying to offer BaaS services, or a white-label service – it is about being open to collaborating with third parties and about selecting the partners who can help you tomorrow.”

The path ahead

In closing, Carmen Cuesto shared her vision for what’s next for BBVA: “Our Open Banking strategy is following digitalisation, which is changing the way we consume products and services. We are all getting used to digital platforms, where we can find hyper-customised services. More and more often, we find different players coming together to offer a full range of services that are seamlessly delivered to the end user, with an end to end user experience.”

She went on to explain that for their enterprise customers, this means finding ways to interface with B2B marketplaces, or “The places where our enterprise customers are and where they close deals. This is the place we are playing now and we want to continue to be there.”

More broadly, Cuesto demonstrated that BBVA are actively seeking ways to become embedded in third party customer journeys, giving their recent alliance with Uber as an example. She also hinted that more of this kind of project are in development, so we will be watching closely for more developments over the coming year.