Finally, it is here, and everybody can feel it: banks are facing the impact of the technological revolution.
Customers have already changed and demand new, innovative services and ways of accessing them. And hundreds of new entrants to the banking business are catering for these needs, attacking different links in the banking value chain.
And all this is happening in the midst of a puzzling global economic environment of subdued growth, very low inflation (even negative, in many countries) and interest rates hovering around -or below- zero.
This, together with the impact of post crisis banking regulation overhaul, has shrunk banking profitability.
Thus, technological advances add to the urgency for a radical transformation of the banking industry. But, at the same time, it facilitates improving both the efficiency and the quality of the customer experience.
We are already moving towards a new banking industry and the pressure of technological progress will be the real driver behind the dramatic improvement of productivity and efficiency that the industry needs more and more urgently.
The transformation in banking, supported by technology, is equivalent to a structural reform that will bring enormous benefits for customers and a strong stimulus for investment and growth.
We are at the initial stage of an explosion of the so-called exponential technologies: Smartphones, Cloud Computing, Blockchain, Artificial Intelligence, Big Data, Internet of Things (IoT), Biometry, Natural Language Processing, etc. All of them offer the possibility of drastically cutting operational costs per client and improving user experience.
Hundreds of start-ups are offering specific products of services supported by these technologies; the tech giants (Google, Amazon, Facebook, Apple, etc.) are staying for the moment on the fringes of the financial industry, but in time will make profound inroads on it.
They all add to the 20,000 + banks operating in the developed countries. The industry's offering is being unbundled and is becoming more fragmented.
But this process will eventually result in a correction. As the banking marketplace evolves, many banks and startups will disappear. User convenience will create opportunities for banks, and also for other companies, to rebundle products and offer the customer more integrated, global solutions for their needs.
Rebundling the offering means adding products and services from different specialists. The financial industry will evolve to a complex ecosystem with a relatively small number of "platforms" where different providers compete and, frequently, cooperate.
In the center of these ecosystems will be those who "own" the platforms and validate the offering of all the providers in the platform. They will need to meet two conditions: first, an excellent reputation, based on prudence, utmost integrity and zero conflicts of interests. And, second, outstanding technological capacities in order to be the "masters" of the platform development.
BBVA has been working on this since 2007, when we started to make substantial investments to completely overhaul our technological infrastructure. But this is not simply a matter of upgrading hardware and software. It is a multidimensional transformation, including organizational structures, processes, human capital and corporate culture.
This is why, in May 2015, we announced a new organizational structure that places our transformation at the forefront of the business. We have made good progress in new products, processes and channels and in building the capabilities we need. And on the basis of these advances, we are already building a platform that will be opened to third-party developers.
We aim at what we call "exponential banking", i.e. banking supported by exponential technologies, that enhances exponentially the contact we have with our customers and the number, scope and quality of the services we can offer. And, finally, that expands our business exponentially, giving it true global reach.
Nobody can be successful in such an ambitious transformational process without a clear vision, principles, strong committed leadership and, of course, time.
We do not know what the future will bring but we feel we are ahead of the pack, gathering everything we need to gain customer trust, which in the end is what will decide who the winners will be in our industry.
Francisco González is the Group Executive Chairman of BBVA.