BBVA API Market
Carlos López Moctezuma, Global Head of Business Models, Open Banking and Innovation at BBVA, participated remotely in the Open Banking and Open Insurance roundtable, a panel included in the AWS Executive Exchange series of events, which discussed the current situation of open banking and its future prospects.
This panel was moderated by Mattia Gamberoni, Head of Enterprise Iberia at Amazon Web Services (AWS), and also featured Raimundo Sala Albert, Corporate head of Business Solutions at Bankia and Ángel Salamanca Cardona, head of Open Business at Banco Santander Spain, as well as the contribution of Alfredo Velasco, Business Developer at AWS.
The roundtable began with a short analysis of the situation of open banking in Spain and Europe and its adoption by the main banks, especially following the implementation of the European PSD2 directive.
Both Sala and Salamanca stated that their banks are already complying with the main regulatory requirements established by the current directive, in addition to being immersed in the monetization and launch of new APIs for third parties, although they underscored some obstacles during the adoption process. “There has been a lot of progress, but there’s still a lot to be improved as regards users, since customers are reluctant to share their financial data,” Salamanca said.
López-Moctezuma began with a reference to this adoption by users in Spain by giving the United Kingdom as an example, a country where open banking was welcomed by customers much more quickly and naturally. “In Spain, the customer adoption curve is progressing more slowly. We know this is going to be slow, but business processes in the UK are starting to welcome customers.”
In addition, López-Moctezuma mentioned the international part of open banking, emphasizing the challenge of monetization of applications. “Applications are not monetized on their own with PSD2 APIs; you have to build new business models on top of those platforms. Much of this construction effort occurs through global agreements with large companies that demand the same connection in all countries. This is a challenge, because banks have a different core in different countries and we face a different legacy system.”
The discussion continued with an explanation by the speakers of the main open banking use cases and the platforms on which they are already working. Salamanca began by talking about Santander’s aggregation and financing services, while Sala explained the link between PayPal and Bankia, a fully integrated environment within a single platform.
López-Moctezuma highlighted three models of open banking: B2B, services for companies and corporate businesses, and Banking as a Service (BaaS), where the bank leases its banking infrastructure to third parties and B2B2C (or also B2B2E), i.e. business models for end customers or employees in partnership with third parties.
“A clear example is BBVA and Uber’s partnership in Mexico to provide accounts to their drivers, which is fully APIfied and resides in the third-party ecosystem; or the alliance with Google we announced just over a month ago to create co-branded accounts in the American market. To my mind, these models of interaction in third-party ecosystems are really the winning systems and we should exploit them more at the banks,” López-Moctezuma concluded.
The three speakers talked about the collaboration and interaction between banks and fintech, and explained which business models may arise from this collaboration. López-Moctezuma mentioned Solaris Bank in Europe, a fintech which is doing very well within the Banking as a Service model, developing platforms with a lot of functionalities.
“At the banking level, the winning models will depend on how easily we, the banks, can introduce value-added products into third-party ecosystems and how successful we will be in creating our own ecosystems. We don’t know which of us will be able to develop more effectively, nor whether we will be able to create ecosystems as large and diversified as other companies do. The competition is going to be positive for end users, both for companies and for natural persons, because this generates much more added value for them,” said López-Moctezuma.
Salamanca defined fintech not as an enemy, but as an ideal partner that makes it possible to reach end customers with innovations that banks, by their structure, cannot offer. “It’s good for fintech, because it’s based on your brand and your customer base, and it’s good for us because of development times and hunger for new features.”
López-Moctezuma also spoke of the competition that may arise between banks and these fintech companies. “There are specific businesses where fintech companies are already competing with banks, offering products that are part of the banking core. However, there are many other business models in which complementarity in product creation occurs very naturally. We will compete and cooperate wherever we have to.”
Salamanca also stated the need for the presence of fintech companies in this ecosystem, as they allow an independent agility and vision and some freedom from the regulations in force.
Velasco finished the roundtable talking about the main pillars on which open platforms should be supported. In his view, these are:
Finally, Gamberoni, the moderator, suggested a small reflection exercise and summarized the roundtable, focusing on the priority of identifying needs that customers don’t even know they have and, above all, the challenge of innovation escalating as companies become more and more complex.
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