The Paypers interviews Carmela Gómez Castelao, Global Head of Open Banking at BBVA, to learn more about the Open Banking journey at the bank
How do you see Open Banking playing out in Europe, both in terms of adoption and regulatory support?
Banks can have two different (and somewhat conflicting) roles in the Open Banking ecosystem: on the one hand, they want to protect the payments information they hold on their clients, which gives them a competitive advantage. On the other hand, they may want to take advantage of Open Banking and operate as third-party providers (TPPs) in order to offer new services to their clients.
Authorities should be aware of the competitive imbalance Open Banking creates and the possible impact on financial stability, so that the industry can seek support for a wider data-sharing right that goes beyond just financial data.
When talking about APIs, there are some conversations pending in the industry, such as standardisation and sandbox. We think that standardisation will make the market grow faster, centring the effort around providing a better service, not around the connectivity, format, and language issues. A regulatory sandbox can also help create a network of regulators who share experiences and collaborate on policy work.
BBVA was praised as one of Europe’s most innovation-centric banks; its initiatives include an open innovation unit that works with fast-growing companies. Could you provide more details about the open innovation journey at BBVA so far and the most recent developments and fintech collaborations?
In the last two years, BBVA’s strategy around open innovation has shifted to improving and strengthening its process for collaborating with startups, thanks to the change of mindset and internal processes as well as a much more mature startup scene. It’s key to consider that banks are regulated entities and we need to collaborate with companies mature enough to provide confidence to all stakeholders.
Starting from our bank strategy and our execution roadmap, we identify possible areas of collaboration. We search through BBVA Open Marketplace for the most innovative proposals, and we get them linked to the most suitable business areas in BBVA. Then, we implement an internal process to help the bank and the startup dialogue within the same parameters, define the project jointly, and share it with the control areas in a record time of only four days. This allows us to approve or discard projects in a very lean way.
In 2019, we carried out 18 global pilot projects, five of which are already in production. A few examples are the POS mobile solution by Izipay in Peru, or the improvement of internal processes in the GMV Colombia Wealth Management area. Finally, with the Spanish company BDEO, we’ve been working with extreme success for the past two years on a streaming solution for traffic accident claims that significatively reduces fraud.
What Open Banking propositions does BBVA develop for SMEs and corporates?
BBVA will seek to provide all services to SMEs and corporates that can facilitate their integration with BBVA, streamline processes, and promote their own ecosystems.
Our partnership approach allows us to discover their needs, so we can plan accordingly which services we should develop to help them solve their main pain points. We work with the community in understanding deeply their processes and which ones can be streamlined with BBVA’s help.
Could you please provide more details about BBVA’s API products and the API monetisation strategies at BBVA?
BBVA’s API offering encompasses different types of APIs through BBVA API_Market, depending on the underlying business model we want to solve. Monetization strategies can vary very much depending on the value the partnership provides to BBVA. It ranges from getting leads whose value depends on the market and the leads’ quality, to providing specific and valuable services.
In the US, for instance, our APIs aim to help third parties in the development of financial services (Banking-as-a-Service model), but we have many other examples in Mexico and Spain in which we seek to co-create digital journeys with our partners or enhance the digitalisation of our client’s processes.
Our monetisation schemes are actually adapted to each type of API and the business model behind them.
How would you see the shift to Open Finance playing out? What are the benefits?
Open Finance will allow banks and other companies to become part of bigger ecosystems, where clients will perform their activity. The way we consider our operation today will probably change in the future moving to a much more open and interrelated world, where banks as financial providers will become an important piece in the clients’ life, to plan for their finance and future needs. This will be combined with a more connected approach to their lives and activities, where finance will be a critical piece, but much more valuable thanks to this connection.
The editorial was originally published in Global Open Banking Report 2020, which follows the journey from Open Banking to Open Finance and Open Data Economy, and provides key insights about the benefits of Open Finance for different areas of financial service.
About Carmela Gómez Castelao
About BBVA
BBVA is a customer-centric global financial services group founded in 1857. The Group has a strong leadership position in the Spanish market, Mexico, South America and USA. Its responsible banking model aspires to achieve a more inclusive and sustainable society.
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