BBVA’s Four-Step Guide To Digital-First Transformations

Banks worldwide are leveraging various tools and technologies as they move toward digital-first branch locations.

Cloud computing, advanced ATMs and data analytics are just some of the offerings being employed by financial institutions (FIs) to meet customers’ demands for digital experiences.

Bankers are also using their extensive knowledge of customers’ financial lifestyles to create laser-targeted product recommendations, or deploying complete core system replacements to consolidate their banking channels onto a single platform.

BBVA USA, the Alabama-based subsidiary of Spanish multinational FI Banco Bilbao Vizcaya Argentaria and the 30th largest bank in the U.S., is currently undergoing a major digital transformation. It is shifting all of its 649 branch locations to a digital-first model to “create amazing experiences for the customers,” said Murat Çağrı Süzer, head of retail banking for BBVA USA.

“We are also providing customers … tools so that they can finalize their transactions without actually being in contact with a human,” he added.

The bank recently began a four-step digital-first transformation that affected every stage of its in-branch experiences, impacting both customers and employees. The strategy offers BBVA USA a number of front- and back-end benefits, but implementing it had its challenges.

A Four-Step Transformation

The first step in BBVA USA’s digital evolution may have been the simplest, but it was the most widespread. It eliminated as many paper processes as possible from its branches. The FI now uses digital tools for each part of customers’ financial journeys, reducing how much time they spend in banks and encouraging them to engage with additional services.

“[Whether they are] opening a checking account or a credit card, … customers find an iPad, click on some buttons, and then finalize transactions for all of those [financial offerings],” Süzer explained. “[This helps] not only from an environmental perspective, but we’ve also made it easier for them to finalize the account opening process.”

Paperless processes mean less time is spent filling out and filing forms, giving employees more time to spend on their customers. BBVA USA took this a step further with a capability that frees remote call center teams from having to find new customers. In-branch employees are now directly responsible for that process, which helps foster relationships and encourages customers to engage more with the bank.

“Customers don’t always want to visit the branches, or they don’t have the time to go,” he said. “Now, a banker could reach out to the customer or the other way around, and the branch employee can finalize that [interaction] over the phone — even if it’s an account opening.”

The bank plans to extend this capability to credit card applications — a move it hopes will boost efficiency for this normally time-consuming process and encourage more customers to apply for credit cards.

Those who do not have the desire or ability to visit bank branches but still want face-to-face interactions with employees can take advantage of BBVA USA’s third major digital innovation: a tool that allows sales staff to conduct core banking functions off-site.

“In the past, [customers] would take a paper application to the branch,” Süzer explained. “What’s happening today, though, is the branch employee joins [a customer at a prearranged site] outside of the branch with an iPad, and they do the full customer onboarding and account opening at that location.”

Employees interacting with customers off-site or at branch locations can also use a mobile banking demonstration to educate customers, Süzer said. The tool performs every digital banking functionality BBVA USA offers without actually moving consumers’ funds, enabling them to practice and become familiar with the solutions via mock transactions.

Digital-first systems have numerous benefits, such as targeted product recommendations, decreased transaction times and increased likelihood that customers will use additional services. These benefits build customer trust, which could potentially provide the FI with lifelong customers.

Data and Efficiency Benefits

One of the most important digital-first transformation gains has been BBVA USA’s improved views into customers’ financial journeys, Süzer explained. The digital enhancements gather increased amounts of data, allowing employees to make consumers much more relevant offers for new products and services.

“We are trying to estimate what the customer may need from a financial perspective, and we use that data to show them what they need,” he said. “In some cases, they don’t even know that they had the opportunity to [access a given] product or service.”

The digital push helped BBVA USA improve its back-end processes as well. Banking operations have traditionally involved tedious clerical work, with uncaught errors having vast ramifications. Every calculation had to be checked and rechecked, and a recent study found that up to 40 percent of all paper applications contained errors. BBVA USA’s digitization and paper-reducing efforts have allowed it to automate many of these processes, reduce the number of required staff, and decrease errors and inefficiencies that manual processes cause.

“For example, we had more than 100 employees working offshore for document collection and validation efforts,” Süzer noted. “Through digitization and automation, we are doing the same thing with only 12 employees.”

These benefits are only realized if customer-facing technologies and back-end processes work in harmony, which is much more difficult than many realize.

Digital-First Challenges

Designing intuitive, effective digital banking and customer relationship interface is difficult, as is automating behind-the-scenes processes, but any digital-first bank can attest that both are worth the effort. Banks need to prioritize both customer-facing and back-end efforts, rather than emphasizing one or the other, to achieve that necessary balance.

“Some organizations are spending a lot of effort on making very beautiful, do-it-yourself front ends for the bankers to start processes or account opening, but that is typically the easier piece of it,” Süzer said. “The question is: ‘Once [we have started] a transformation, how are we going to make sure that the back end is going to be aligned with the speed and quality of the content?’”

He added that the key to solving this problem is ensuring all personnel involved have thorough understandings of each aspect of the digital-first transformation. BBVA USA accomplished this with a global prioritization methodology that allowed its multitude of teams to work in tandem.

“Even if I’m doing something in retail banking, … IT, engineering operations [or] fraud, as long as those priorities are aligned globally and locally, then everyone has the exact same priority,” he explained.

FIs may have different ends in mind when undergoing digital-first transformations, but having a unified in-house objective is necessary. Accomplishing this can help these institutions reap digital-first banking’s many benefits, including improved customer service, targeting marketing and greater operational efficiencies, while improving customer service and adding the positive financial experiences for which banks strive to be known.