Disruption in financial service Nov 2017 1 1
Can an incumbent lead the transformation of your industry? Why is this question so relevant?
Communication Transport Retail Auction Finance Real estate Tool Storage Food Others
Incumbents?
Huge challenge 89% of 1955 Fortune 500 companies have disappeared Life expectancy has declined from 75 years in 1950 to 15 years today
Fewer banks in the Top 10 Revenues (Fortune 500) Market Cap No 10 banks 6 tech companies in the top 10
Financial services Mobile Big data Cloud Artificial Intelligence Blockchain Biometrics
Personal finance Payments Lending Wealth management Capital & debt Advisory
Transformation journey 2007 Today
It s all about people Hiring new capabilities Hiring new Engineers capabilities Transforming our workforce Transforming New ways of working our workforce Data scientist Designers Agile organization Values & Behaviours
Our purpose Strategic vision Bring the age of opportunity to everyone 1 2 3 New standard in customer experience Helping customers and clients with their financial lives Digital sales Digital and mobile customer base and digital sales growth New business models New revenue streams 4 5 6 Optimal capital allocation Growth with adequate profitability above cost of capital Unrivaled efficiency Productivity model transformation leveraging technology A first class workforce Develop, motivate and retain
Great challenge Set strategy in 2014 GAP Execution reality
Large organizations complexity Organizational boundaries Lack of focus on delivery Non-prioritized planning
For prioritization, strategic alignment and execution, it is necessary to set a unique agenda (SDA) SDA Single Development Agenda Developmen t of new Strategic framework BAU initiatives solutions Planning: 12 months vision SDA Single Developmen t Agenda Prioritization: according to impact & value delivered Triangle: ensure fully dedicated resources 3-6-9 vision for new projects
Flexibility to changes NEEDS Launch products quicker Emerging needs Changing markets Varied and complex technology Expertise CONTEXT Quality as a differential factor
Over 3.000 people working under Agile (1,100 in South America) Moving away from rigid organizational and functional structures toward a much more collaborative way of working
Scaling process is progressing favorably, increasing execution capacity in every cycle in South America 82% % PI Accomplished + Flexibility 81% # PI Commitments 73% 77% + Speed # PI Commitments Accomplished 69% + Productivity # EMC* + Teamwork # Scrums Note: Included Argentina, Chile, Colombia, Peru and Venezuela * Argentina EMC not included in the last PI
Focus on developing EMCs in Agile methodology Increase # of Scrums EMC delivered in South America 84 x2 41 57 30 53 43 Scrum teams 13 16 From 31 to 63 x2.5 People working on Agile From 222 to 560 340 EMC x3. (vs 2016)
Helping us evolve our value proposition 1Q 2017 2Q 2017 3Q 2017 Referrals Payroll Account opening (Argentina) Adelanto de Nómina App (Colombia) Positive identification (Argentina) PSE on Mobile (Colombia) Remote Chatbot Francés Go (Argentina) ATM hurto (Colombia) Mobile App new functionalities (Argentina) Front Banking Tool (Peru) Digital enrollment from branches (Argentina) Mortgage digital sales (Perú) Digital Open Market sales (Argentina) Tracking of claims (Perú) On/off debit card (Chile) Theft Insurance in ATM (Peru) New UX Mobile (Colombia) ATM Digital Sales (Perú) One click consumo (Chile) Visitame App (Perú) Dinero móvil (Colombia) Provinet Empresas Móvil (Venezuela) BBVA Cloud (Chile) Customer management tool (Venezuela) PSE Payments (Colombia) Buzz:banca móvil (Venezuela)
Supported by a new creation methodology Shappers 3/6/9 rule 7 Layers BUSINESS CX 3days 6weeks 9months Bring shapers together Create and prototype Deliver MVP 01. Best practices 02. User Experience 03. Data & Reporting 04. Front-end 05. API standards 06. API implementation 07. Core systems Design thinking Behavioural economics 533 global ambassadors
New values and behaviour The customer comes first We think big We are on team Culture of metrics Empowerment Accountability Fail fast, fail often & fail early Test & learn
Gradually matching strategy and execution Set strategy GAP + Agile methodology + New creation model + New values + behaviour Execution reality 2014 2015 2016 2017 2018 2019 2020
Improving our value proposition and triggering high positive P&L impact GAP Set strategy + Agile methodology + New creation model + New values + behaviour Execution reality Better value proposition Wallet GloMo Valora PFM etc... Business impact Customers Engagement Satisfaction Attrition Profitable Costs + P&L impact
Wallet
Wallet enhances relevant business KPI Activity Increase transactionality Increase engagement 7 Countries Transactionality in credit card customers in Perú Churn rate by segment in Argentina Segment With FGO Withou t FGO % Dif Premium 1.8% 0.7% -41% 9 Mn Downloads Mass 4.2% 1.6% -39% Financial inclusion 9.8% 5.4% -55% TOTAL 3.9% 1.6% -42% 2 Mn Active users Customers without Wallet Customers that adopted Wallet in 2017 Strengthening relations with customers
BDSA highlights Ongoing AI initiatives AI needs per country Customer s Customer s data is the data is the cornerstone cornerstone to create to create opportunitie opportunities s
Valora
PFM
Driving digitization and digital sales across the group Digital & mobile customers Digital sales % Digital target customers % Mobile target customers % Digital sales / Total sales in units BBVA Group 31% 16% 36% 23% 41% 29% 10% 17% 24% BBVA South America 33% 12% 38% 18% 42% 21% 9% 15% 30%
Boosting Customer Satisfaction NPS Position in ranking peer group 4 1 10 1 4 2 2 1 1 1 1
Complemented by other independent innovative strategies SCOUT BUILD & PARTNERSHIPS ACQUISITIONS INVESTMENT (Venture capital) Transform Open Innovation Innovative (startups) & Infrastructure Co-exploring 29.5% stake Disrupt Venture Creation Open platform
Lessons Learned - It s all about people - Strategic vision - Operative model - New values & culture - Open innovation
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