Banking of the Future through Digitalization
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Banking of the Future through Digitalization

Hugo Najera Alva, head of Client Solutions, BBVA Mexico
Hugo Najera Alva, head of Client Solutions, BBVA Mexico

Hugo Najera Alva, head of Client Solutions, BBVA Mexico

Technology has changed the way we perceive the world. Information processing and storage capacity impacts consumer behavior, which today allows people to go from being digital migrants –customers who have adapted to digitalization- to digital natives who were born with intuition and abilities to the use of technological tools, immersed in a universe of innovation kept and available in cellphone only at one click.

It is well-known that the technological transformation has been essential for different sectors as it allows them to adopt a constant digitalization process that is reflected in the internal evolution of companies, in the fast development of products and services, as well as in the design of business strategies. Based on data as a key piece to know customer needs and design solutions to accomplish them.

The Covid-19 pandemic boosted digitalization in almost all industries, but disruption for the banking industry was already there before. For instance, the financial sector was already prepared to face lockdowns and supporting users and clients by delivering financial support and services during the pandemic.

As for BBVA Mexico, these changes and disruption led to different experiences. First, the product and service distribution model that was previously only offered through branches has migrated to a new digital model, with a value offer that connects the bank with 17.8 million customers who operate through digital channels, making products and services available at lower costs, with greater accessibility and with tools that help them make better financial decisions. As of July 2022, the financial institution has 26.7 million total clients and 67 percent transact through mobile phones or on the web.

The bank is customer centered; clients are in the center of all decisions allowing them to reach all the opportunities of this new era to everyone. It has adopted Open Banking in order to be competitive in a changing market and also understanding the importance of alliances with new digital players (Startups, Fintechs, Bigtechs and Neobanks), rethinking the purpose, defining strategic priorities based on the financial health, reaching a greater number of customers and digital sales, offering operational excellence, being the best banking team, being data-driven, and constantly innovating.

The digital transformation of BBVA Mexico is leveraged in four strategic pillars. The first is design, which is clear, friendly, and consistent. Currently, the bank has more than 250 designers working in the creation and improvement of end-to-end processes in all digital channels.

Changing the mindset has been essential to adopt new tools that allow the consolidation of the bank of the future in the country, and these steps into the transformation: A corporate culture that, under the agile methodology. By using this method the bank has arranged collaborative and multidisciplinary teams that have a different perspective of the customer behavior. Using the agile methodology allows the prioritization of projects complying with quality and effectiveness and simplifying the customer experience.

 The transactional footprint left by banking users is a strategic advantage because it helps understand consumption patterns 

A third element that remarks the bank's leadership in the financial sector is efficient data management. The transactional footprint left by banking users is a strategic advantage because it helps understand consumption patterns. Thanks to its interpretation, BBVA Mexico offers specialized and personalized advantages that make the bank more competitive in the market and with the challenge to increase customer understanding through reliable, timely, and organized data.

In this line, it can be highlighted that for BBVA Mexico, it is important to maintain a continuous technological investment and innovation as well as infrastructure and digital solutions. In 2022, 7 billion pesos have been allocated. This amount is part of a five-year investment plan (2019-2024) of more than 63 billion pesos divided into innovation, technology, digitization, physical infrastructure, financial education, sustainability projects and scholarships to promote education in the country.

This evolution of digital transactions carried out by customers during the first half of 2022, resulted in 943 million. In this sense, the number of transactions within digital channels (mobile and web) represent 59 percent of the total (compared to 52 percent in 2021) with a growth of 43.7 percent in the last 12 months. Digital sales represent 74.3 percent of total sales (measured in units) as of the second quarter of 2022.

The fourth capacity that strengthens the digital transformation of the financial institution is based on the global vision that is operated through a platform focused on optimization and cost reduction, which reuses over the 50 percent of a digital development made in Mexico and tropicalize it for the rest of the geographies where the BBVA group has a presence.

The bank will continue to develop breakthrough solutions to expand its digital offer, exploring the capabilities like open banking and blockchain, using artificial intelligence as a complement to increase security, reduce execution time in operations, and thus migrate from branches the sale of more specialized products, implementing processes that allow efficient and timely contracting. It is also working to consolidate itself in two main lines of action in the field of sustainability: climate change, with products and services that help customers towards a transition to a greener future; and inclusive growth, to provide opportunities to less favored segments, stimulating economic growth, committed to leave no one behind.

BBVA Mexico is a pioneer in the transition from traditional to digital banking, a change that keeps the bank in constant evolution. Likewise, technology opens up the possibility of addressing highly relevant issues such as achieving greater bancarization, bringing financial services closer to more people, and also contributes to the reduction of cash, which is necessary for Mexico to advance in the same direction as one of the major financial systems in the world. Finally, digitization is a fundamental element for customers and users of banking services to improve their financial health.

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