BBVA USA is recognised as a forward-looking financial institution with its finger on the pulse of innovation. TFT recently spoke to Shayan Khwaja, executive director and head of business execution for BBVA USA, about its mission in the US, its work with ‘intrapreneurs’, and how both are connected to its global strategy. Plus, how the coronavirus crisis is changing the financial services landscape.
At the start of this year, BBVA USA unveiled its lofty five-year strategic plan to grow the bank while revolutionising the way it does business through continual improvements in data, technology, and operations.
Its plan for continuous growth included developing solutions that help clients improve their financial health, in addition to focusing on a future grounded in sustainability and technology.
Of course, this strategy was established well before the coronavirus pandemic took hold. Yet, BBVA USA says the ‘six pillars’ on which the plan is built have proven to be even more critical in the face of the coronavirus pandemic and social unrest. Compared to competitors, It’s also put the bank in a better position to serve customers as digital transformation in financial services has been accelerated.
Shayan Khwaja, executive director and head of business execution for BBVA USA, explains: “Globally, BBVA is a retail bank. Our aspirations are similar in the US, in that we want to be a much bigger, retail franchise than we are today. We see a lot of transformation in every industry, but for banking, the world is evolving quite significantly.”
Through its products, services, and digital banking capabilities, the bank says it is creating opportunities for people to recover from the pandemic and prepare for life’s next financial milestone. In fact, says BBVA USA, while the health crisis caused by Covid-19 is accelerating digitisation, the bank plans to grow and transform at the same time.
“We are looking into all areas that will affect our business, but we see the most disruption and development happening on the consumer and the retail side of the business, so that’s why our focus has probably been a little bit heavier than what we see on the commercial side. Even if you look at our portfolio, the purpose of what we are doing is longer-term transformation of the industry versus looking for cheaper capital or cost of funds in the short-term. We should be a larger bank in the next few years,” says Khwaja.
According to Khwaja, although Covid-19 has expedited the migration of transactions from branches to digital channels, for the short term, if not longer, he also believes that banking is primarily a people business. This is why part of its plan in 2021 is to open 15 new branches across Texas, where the bank maintains its largest US footprint.
Khwaja added: “I think we’re a very forward-looking bank, and we have been very digitally savvy for several years, which is showing dividends at this point. Digital transformation is inevitable, it’s happening, and it’s getting faster, especially during these pandemic times. However, if you look at our strategic plan, we will be opening a few branches too. So, how we evolve forward is our digital channels continue to support and become more omnichannel and will be very complementary to each other.”
Other pillars underscoring the bank’s five-year strategic plan include a focus on helping clients improve their financial health as a means to subsequently improve society’s overall health.
According to BBVA USA, banking is a ‘people business, and it’s a relationship business.’ Its goal is to look for a full relationship with a customer throughout their life cycle – from when they’re a student to having a family and growing old.
“With this life cycle approach, we recognise that customers have multiple needs that evolve and to be really successful, specifically in retail, you need to have a full set of products and the right services to really add value to the customer,” says Khwaja. “We’ve got great plans to continue evolving, and you will see a lot of product innovation and enhancements in how we support our customers in terms of their financial health, focusing on sustainability.”
One of the ways BBVA USA says it will achieve this product innovation and evolution is through its partners that are in-house – who Khwaja refers to as ‘intrapreneurs’ – and its open banking initiative, BBVA Open Platform. The developer platform lets the bank, and its partners, acquire and engage customers by embedding financial products that create powerful consumer value propositions.
“At the end of the day, we are always asking ‘are we improving our customer’s financial health? Are we bringing them what is expected from a banking relationship?’. That’s why we are sort of partnering with fintechs because they bring many things that benefit the whole value chain. By bringing a holistic, financial set of products, we’re serving the needs of the customer throughout their life cycle,” says Khwaja.
Beginning in 2014, when the bank acquired US-based neobank Simple, the company has continued to evolve and be a leader in fintech, demonstrated by its partnership with companies, including Google, to develop an AI-based PFM tool in 2018, and in 2019 to provide digital-checking accounts through Android phones.
“We have made a lot of progress already and onboarded a lot of clients,” says Khwaja. “What we are providing is not just an API but banking services to enable fintechs to offer bank products. We’ve been working with some big names, and these use cases are continuing to evolve.”
These moves, and others that Khwaja eluded to, show that BBVA is a bank with an eye on the future and that understands the needs of the next generation banking customer. As it continues to embrace digital transformation and think outside of the categorical box it’s laying the foundation for long-term success.