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Disruption in financial serviceNov 2017
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
Revenues (Fortune 500) Market Cap
No banks
10
6 tech companies in the top 10
Fewer banks in the Top 10
Mobile Big data Cloud
Artificial Intelligence Blockchain Biometrics
Financial services
Personal finance Payments Lending
Wealth management Capital & debt Advisory
Transformation journey
2007 Today
It’s all about people
Hiring new capabilities
Transforming our workforce
Hiring new capabilities
Engineers
Data scientist
Designers
Transforming our workforce
New ways of working
Agile organization
Values & Behaviours
Strategic visionOur purpose Bring the age of opportunity to everyone
3
New business
models
New revenue streams
2
Digital sales
Digital and mobile customer baseand digital sales growth
Optimal capital allocation
4
Growth with adequate profitability above cost of capital
5
Unrivaled
efficiency
Productivity model transformation leveraging technology
A first class
workforce
Develop, motivate and retain
6
1
New standard in
customer experience
Helping customers and clients with their financial lives
Great challenge
Set strategy in 2014
Execution reality
GAP
Large organizations complexity
Organizational boundaries
Lack of focus on delivery
Non-prioritized planning
Development of new
solutions
BAU initiatives
SDA Single Developmen
t Agenda
For prioritization, strategic alignment and execution, it is necessary to set a unique agenda (SDA)
▪ Strategic framework
▪ Planning: 12 months vision
▪ Prioritization: according to impact & value delivered
▪ Triangle: ensure fully dedicated resources
▪ 3-6-9 vision for new projects
SDA Single Development Agenda
● Launch products quicker
● Emerging needs
● Changing markets
NEEDS● Varied and complex technology
● Expertise
● Quality as a differential
factor
● Flexibility to changes
CONTEXT
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
69%
73%
77%
81%
82%
Note: Included Argentina, Chile, Colombia, Peru and Venezuela* Argentina EMC not included in the last PI
+ Flexibility
+ Speed
+ Productivity
+ Teamwork
# PI Commitments
# EMC*
% PI Accomplished
# PI Commitments Accomplished
# Scrums
Scrum teams
From 31 to 63
Focus on developing EMCs in Agile methodology
Increase # of Scrums EMC delivered in South America
x2
People working on Agile
From 222 to 560
x2.5
13 16
41
57
30
84
5343
(vs 2016)
x3.
2
340EMC
Helping us evolve our value proposition
Referrals Payroll
Account opening (Argentina)
Front Banking
Tool (Peru)
Mobile App new
functionalities (Argentina)
“Adelanto de Nómina”
App (Colombia)
1Q2017
Positive
identification (Argentina)
Customer management
tool (Venezuela)
Digital enrollment from
branches (Argentina)
PSE on Mobile(Colombia)
Mortgage digital sales (Perú)
BBVA Cloud (Chile)
2Q2017
Remote Chatbot
Francés Go (Argentina)
ATM hurto (Colombia)
Digital Open
Market sales(Argentina)
Tracking of
claims (Perú)
Buzz:banca móvil (Venezuela)
Visitame App (Perú)
PSE Payments (Colombia)
One click consumo (Chile)
3Q2017
New UX Mobile (Colombia)
ATM Digital Sales (Perú)
Provinet
Empresas Móvil (Venezuela)
Dinero móvil (Colombia)
Theft Insurance in
ATM (Peru)
On/off debit card (Chile)
Shappers
Supported by a new creation methodology
7 Layers
01. Best practices
02. User Experience
03. Data & Reporting
04. Front-end
05. API standards
06. API implementation
07. Core systems
CX
BUSINESS
3/6/9 rule
3days
6weeks
9months
Bring shapers
together
Create and
prototype
Deliver MVP
Design thinking
533 global ambassadors
Behavioural economics
New values and behaviour
The customer
comes first
We think big We are on
team
Culture of metrics
Empowerment AccountabilityFail fast, fail often & fail
earlyTest & learn
Gradually matching strategy and execution
Set strategy
Execution reality
2014 2015 2016 2017 2018 2019 2020
GAP+ Agile methodology+ New creation model+ New values +
behaviour
Improving our value proposition and triggering high positive P&L impact
Set strategy
Execution reality
+ Agile methodology+ New creation model+ New values + behaviour
GAP
Better value proposition
● Wallet
● GloMo
● Valora
● PFM
● etc...
Business impact
↑ Customers
↑ Engagement
↑ Satisfaction
↓ Attrition
↑ Profitable
↓ Costs
+ P&L impact
Activity Increase transactionality Increase engagement
9 MnDownloads
2 MnActive users
Countries7
Customers
without Wallet
Customers that adopted
Wallet in 2017
Transactionality in credit card customers in Perú
Churn rate by segment in Argentina
SegmentWith FGO
Without FGO
% Dif
Premium 1.8% 0.7% -41%
Mass 4.2% 1.6% -39%
Financial inclusion 9.8% 5.4% -55%
TOTAL 3.9% 1.6% -42%
Strengthening relations with customers
Wallet enhances relevant business KPI
Ongoing AI
initiativesBDSA
highlights
AI needs per
country
Customer’s data is the cornerstoneto create opportunities
Customer’s data is the cornerstoneto create opportunities
BBVA Group
BBVA South America
Driving digitization and digital sales across the group
Digital & mobile customers Digital sales
29%23%
16%
41%36%
31%
21%18%
12%
42%38%
33%30%
15%
9%
24%
17%
10%
% Digital target customers % Mobile target customers % Digital sales / Total sales in units
Boosting Customer Satisfaction
4 1 10 1 4 2 2 1 1 1 1
NPSPosition in ranking peer
group
ACQUISITIONSINVESTMENT
(Venture capital)BUILD &
PARTNERSHIPSSCOUT
&
Transform
Disrupt
Open Innovation Innovative (startups)
Infrastructure
Co-exploring
Venture Creation
Open platform
29.5% stake
Complemented by other independent innovative strategies
Lessons Learned- It’s all about people
- Strategic vision
- Operative model
- New values & culture
- Open innovation
35
Disruption in financial serviceNov 2017
35
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