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Jose Luis Navarro.vtt

English

{{00:00:03}}
David Penn: Hi, I'm David Penn,
Research Analyst with Finovate.

{{00:00:06}}
Joining me here at FinovateEurope
is Jose Luis Navarro.

{{00:00:08}}
He is the Head of Open
Banking Strategy with BBVA.

{{00:00:11}}
Thanks for joining us today.

{{00:00:12}}
Jose Luis Navarro: Oh,
thank you very much.

{{00:00:13}}
I'm happy to be here.

{{00:00:14}}
David Penn: Let's go ahead
and jump right into it.

{{00:00:16}}
What sort of opportunities do
open banking and open finance

{{00:00:18}}
offer to finance institutions?

{{00:00:20}}
Jose Luis Navarro: Okay the first and
main one is to approach the open market.

{{00:00:26}}
Actually the banks, we are spending money
trying to enter in the open market more.

{{00:00:31}}
I will say bringing the open market
to our own webs or our own apps.

{{00:00:37}}
And that's really costly.

{{00:00:38}}
It's really difficult to do.

{{00:00:40}}
But then  open banking help us
to embed our financial services

{{00:00:44}}
into third party experiences.

{{00:00:47}}
And then from there, reach all
the customers of that partner.

{{00:00:52}}
But it is, really much cheaper.

{{00:00:53}}
It's really much better.

{{00:00:55}}
And actually you reach so many customers
you never thought that you will be able

{{00:01:00}}
to reach So that's, the main  advantage
for a financial services institution

{{00:01:07}}
David Penn: Right, now.

{{00:01:08}}
Could you talk more specifically about
BBVA and some of the ways that your bank

{{00:01:12}}
has been able to really capitalize on the
open banking and open finance opportunity?

{{00:01:16}}
Jose Luis Navarro: Yeah, we like
I'm in the open banking team,

{{00:01:19}}
but we really think of ourselves
more like embedded finance team.

{{00:01:22}}
Ah.

{{00:01:23}}
Why?

{{00:01:23}}
Because open banking is more about the
regulatory, like payment initiation,

{{00:01:28}}
account aggregation, which of course
we do because we have to comply.

{{00:01:32}}
But then we found our greenfield
in the beyond, we call it beyond

{{00:01:39}}
regulation or beyond open banking.

{{00:01:40}}
Ah, interesting.

{{00:01:41}}
Okay.

{{00:01:41}}
And then we are trying, like
we have so many countries.

{{00:01:45}}
Have Spain, we have a lot in South America
and Central America and North America.

{{00:01:50}}
So we are trying all of them to
get at speed at the same speed.

{{00:01:54}}
To have a minimum common infrastructure.

{{00:01:57}}
And after we have the infrastructure in
each country, we lay out what are the

{{00:02:03}}
most important services to start building.

{{00:02:07}}
Of course it's different in
the situation in Europe than

{{00:02:10}}
it is, for example, in Peru.

{{00:02:12}}
Because there is more unbanked population.

{{00:02:15}}
They need, for example, wallets
and accounts, whereas in Spain,

{{00:02:19}}
they don't need accounts anymore.

{{00:02:21}}
We have a lot of banking.

{{00:02:22}}
So we have a different distribution
of the required APIs in each one of

{{00:02:28}}
the countries, but we always have the
same fundamental strategy in all the

{{00:02:34}}
countries, which is being important
in the world of open banking and

{{00:02:38}}
don't leave away the opportunity.

{{00:02:41}}
We don't want to lose the
opportunity in the whole world.

{{00:02:45}}
David Penn: That's really an interesting
point that you make given the reach of

{{00:02:48}}
BBVA across the world and how different
regions really have different ways

{{00:02:52}}
of accessing the same basic idea like
you said of the embedded finance.

{{00:02:56}}
Is that a very challenging thing for you?

{{00:02:59}}
Or is that sort of an
exciting opportunity?

{{00:03:03}}
Jose Luis Navarro: Of course, it's really
challenging in each one of the countries.

{{00:03:07}}
The first one, I could
say that is regulation.

{{00:03:12}}
Okay, maybe we can go deeper on that.

{{00:03:14}}
But if the country doesn't have
a regulation, it's difficult.

{{00:03:18}}
It's difficult to kickstart open banking.

{{00:03:21}}
Because the bank doesn't feel that
they are responded by any law or that

{{00:03:27}}
they think a regulation will come
over and whatever we have started

{{00:03:32}}
to build won't be valid anymore.

{{00:03:34}}
So that's the first thing.

{{00:03:35}}
Having a minimum regulation is
good, at least to kickstart.

{{00:03:39}}
And after having that regulation,
it's good to allow us to breathe.

{{00:03:45}}
What does it mean by breathing?

{{00:03:48}}
I really want a regulation to be able to
set the playing field for our players.

{{00:03:54}}
So are you a bank?

{{00:03:55}}
You need to comply with
these three aspects.

{{00:03:57}}
Are you a FinTech?

{{00:03:59}}
You need to comply with this all three.

{{00:04:01}}
Are you a mediator?

{{00:04:02}}
I think of elbow.

{{00:04:03}}
You have to comply with these three.

{{00:04:05}}
And now this is the ball.

{{00:04:07}}
You play, right?

{{00:04:09}}
So don't tell me what product I
have to offer because the product

{{00:04:12}}
will come naturally with the needs.

{{00:04:15}}
The most immediate need of each country
is not about what the regulator thinks.

{{00:04:19}}
It's all what the people needs.

{{00:04:21}}
So that's why I think that it
is like an even thought, right?

{{00:04:26}}
Among, the like banks, regulators
in each of the countries.

{{00:04:30}}
David Penn: Interesting.

{{00:04:31}}
Are there any other sorts
of challenges you mentioned?

{{00:04:32}}
I thought that was a very great
point about the difference between

{{00:04:35}}
different countries, some with a
very tight or stringent regulatory

{{00:04:39}}
policy, some with almost none.

{{00:04:41}}
Are there any other sorts of challenges
you're unrolling some of this out?

{{00:04:44}}
Jose Luis Navarro: Yeah I will say
maybe it's not a popular opinion for

{{00:04:48}}
bankers, but in reality, the why - why
finance open banking is not going as

{{00:04:54}}
fast as it should is because banks.

{{00:04:57}}
We are not really 100 percent
ready for accepting customers that

{{00:05:05}}
arrived to BBVA through a partner.

{{00:05:07}}
So you can imagine, and I'm talking
about the, how you say, the metadata

{{00:05:11}}
of BBVA not all the API, which
is perfect and not about the open

{{00:05:16}}
banking channel, which is perfect.

{{00:05:17}}
But for example, when we have an
enterprise or company asking us for a

{{00:05:21}}
loan and that company is not my real
customer, it's the customer from my

{{00:05:25}}
partner, I may not have enough information
to give the loan to the company because

{{00:05:30}}
I'm not ready, or maybe I don't know
how to manage it through my processes

{{00:05:34}}
because my processes are used to handle
my customers, my enterprise customers.

{{00:05:40}}
So we found that we need a
fundamental and basic change in

{{00:05:45}}
all the statements of the plan.

{{00:05:47}}
Let's say regulation, compliance,
legally, as well our processes,

{{00:05:55}}
call centers, everything has to
be thought as if it was for API.

{{00:06:01}}
So an API that is in a third party and
right now, banks are not like that.

{{00:06:05}}
They're quite the opposite.

{{00:06:06}}
Right.

{{00:06:07}}
So that's a really big challenge.

{{00:06:10}}
David Penn: Huh?

{{00:06:10}}
Interesting.

{{00:06:11}}
In terms of other channels, I wanted to
talk about a risks, perhaps there are

{{00:06:14}}
regulatory risks that can be involved.

{{00:06:16}}
And I wonder if maybe we could talk
a little bit about those and the sort

{{00:06:18}}
of risks that financial institutions
face because of the regulations.

{{00:06:23}}
Jose Luis Navarro: The regulations,
in fact give you the opportunity

{{00:06:26}}
to perform some actions or
to, externalize some services.

{{00:06:32}}
So that's an opportunity.

{{00:06:33}}
But the regulation as well,
give you some obligations.

{{00:06:38}}
Yeah.

{{00:06:38}}
Okay.

{{00:06:39}}
But now I will say,
banks have data forever.

{{00:06:43}}
Okay.

{{00:06:44}}
We, always were having
data from customers.

{{00:06:47}}
The difference now is that customers have
a degree of decision on how to utilize

{{00:06:53}}
the On their own benefit, that data.

{{00:06:55}}
And that's perfectly okay.

{{00:06:58}}
The problem is not within the bank
because we are used to be regulated.

{{00:07:01}}
And we are used to have the
regulator eyes, okay, in our neck.

{{00:07:07}}
But then it's about how the interaction
of the bank with a third party.

{{00:07:12}}
And the third party is the
one embedding your API.

{{00:07:15}}
And you don't know how is the journey.

{{00:07:18}}
Because it's their journey,
it's their web, their app.

{{00:07:21}}
And they may use an API in a not
legal way, and that's a problem.

{{00:07:26}}
So there is in reality, the bank
is the ultimate responsible, but

{{00:07:31}}
we need to learn how to monitor the
funnel in the customer's behalf, or

{{00:07:37}}
in the third party's behalf, because
that's where you can have a problem.

{{00:07:41}}
So data is not a problem.

{{00:07:42}}
We are used to be regulated, but we need
to be aware how our partner is behaving.

{{00:07:48}}
And if the partner is misbehaving, we
have to be the first one saying, okay

{{00:07:52}}
guys, I'm going to cancel this out,
but there may have been breach of data,

{{00:07:57}}
breach of security or whatever, but
not from my side, but from the partner.

{{00:08:01}}
So yeah.

{{00:08:02}}
So it's a new layer of responsibility.

{{00:08:05}}
David Penn: Yeah interesting, I'm
thinking by way of by way of wrapping

{{00:08:09}}
up, you talked a little bit about
the customer and the idea of customer

{{00:08:11}}
being empowered now to make decisions.

{{00:08:14}}
What is your sense of what
customers feel about how open

{{00:08:17}}
banking is developing right now?

{{00:08:18}}
Do you feel it's something that customers
are increasingly getting excited about?

{{00:08:21}}
Or do you feel like it's something they're
still trying to get their arms around?

{{00:08:24}}
Jose Luis Navarro: Okay,
that's a ten million question.

{{00:08:27}}
Ten million dollar question, okay?

{{00:08:29}}
Right now, customers, don't
care about open banking.

{{00:08:33}}
It's transparent for them.

{{00:08:34}}
So I don't think there is an
active demand about open banking.

{{00:08:39}}
I'm talking about the end customers.

{{00:08:41}}
But what I feel is that the social
change on how we interact with the bank

{{00:08:47}}
and how we interact with our daily apps
is what is making a passive demand.

{{00:08:52}}
The passive demand is growing.

{{00:08:54}}
We are getting used to pay
through the WhatsApp, through

{{00:08:57}}
the tweets, through the X.

{{00:09:00}}
And that's natural to us now.

{{00:09:02}}
But that natural to us now means
that there is an API behind

{{00:09:06}}
that is helping you to do so.

{{00:09:08}}
We don't realize like end customers,
but we are getting used to do

{{00:09:13}}
banking outside of the bank.

{{00:09:14}}
So that's why I call it a passive demand.

{{00:09:16}}
And there will be a point is like the
mobile banking where mobile banking

{{00:09:19}}
appear to say they will use it.

{{00:09:21}}
Who has a nice mobile to use banking?

{{00:09:24}}
It doesn't seem that will be a boom.

{{00:09:27}}
But it was gradually building
same as I will happen with the

{{00:09:31}}
API and with the open banking.

{{00:09:33}}
So there will be a moment and the
new generations are more than us like

{{00:09:38}}
that they will do banking through
their apps not through the bank.

{{00:09:42}}
So bank will still be existing but the
relationship with the end customers

{{00:09:46}}
will be different will be through
a set of panel array of partners.

{{00:09:50}}
David Penn: Interesting.

{{00:09:51}}
Interesting.

{{00:09:51}}
Just one last quick question.

{{00:09:53}}
Do you think that open banking
or banks that are able to

{{00:09:56}}
really take advantage of it?

{{00:09:57}}
Is that going to be a real
competitive advantage?

{{00:09:59}}
You think going forward?

{{00:10:01}}
Jose Luis Navarro: A competitive
advantage in the first period?

{{00:10:04}}
Yes.

{{00:10:05}}
Because now it's a first arrive for serve.

{{00:10:09}}
If you are the pioneer in
open banking, you get some.

{{00:10:13}}
You have some room to breathe, but the
competition will be fierce in a few years.

{{00:10:19}}
I can foresee that they will
have, will be like marketplaces.

{{00:10:23}}
So a partner will have one bank,
will have an array of banks

{{00:10:27}}
say, okay, do you want a loan?

{{00:10:29}}
Yeah.

{{00:10:29}}
Which bank?

{{00:10:31}}
Because I have the API from
BBVA or Santander, and that

{{00:10:34}}
one, the DBS or whatever.

{{00:10:36}}
You choose, so HSBC.

{{00:10:38}}
Wow.

{{00:10:38}}
Okay.

{{00:10:39}}


{{00:10:39}}
Good.

{{00:10:39}}
Thank you.

{{00:10:40}}
It will come to that, but now it's
difficult to partner and it's difficult to

{{00:10:43}}
do the how to say, connecting to the APIs.

{{00:10:47}}
So it's normal to have
one to one interactions.

{{00:10:49}}
I see.

{{00:10:50}}
Interesting.

{{00:10:50}}
It will be like, yeah,
it will be a marketplace.

{{00:10:53}}
I can feel that.

{{00:10:54}}
David Penn: Yeah, that
makes a lot of sense.

{{00:10:55}}
Very interesting talking with you.

{{00:10:56}}
And it's a huge topic
here at FinovateEurope.

{{00:10:59}}
Another big topic all around the world.

{{00:11:01}}
So it's going to be interesting to
see how this continues to develop.

{{00:11:03}}
Jose Luis Navarro: Okay, yeah, sure.

{{00:11:04}}
Let's talk in a few years.

{{00:11:06}}
And then we can compare.

{{00:11:07}}
That sounds good.

{{00:11:08}}
It's a deal.

{{00:11:08}}
Thank you very much.

{{00:11:09}}
Thank you.

{{00:11:10}}
And thank you for joining us as well.

{{00:11:11}}
Thank you.

David Penn: Hi, I'm David Penn,
Research Analyst with Finovate.

Joining me here at FinovateEurope
is Jose Luis Navarro.

He is the Head of Open
Banking Strategy with BBVA.

Jose Luis Navarro: Oh,
thank you very much.

David Penn: Let's go ahead
and jump right into it.

What sort of opportunities do
open banking and open finance

Jose Luis Navarro: Okay the first and
main one is to approach the open market.

Actually the banks, we are spending money
trying to enter in the open market more.

I will say bringing the open market
to our own webs or our own apps.

But then  open banking help us
to embed our financial services

And then from there, reach all
the customers of that partner.

And actually you reach so many customers
you never thought that you will be able

to reach So that's, the main  advantage
for a financial services institution

Could you talk more specifically about
BBVA and some of the ways that your bank

has been able to really capitalize on the
open banking and open finance opportunity?

Jose Luis Navarro: Yeah, we like
I'm in the open banking team,

but we really think of ourselves
more like embedded finance team.

Because open banking is more about the
regulatory, like payment initiation,

account aggregation, which of course
we do because we have to comply.

But then we found our greenfield
in the beyond, we call it beyond

And then we are trying, like
we have so many countries.

Have Spain, we have a lot in South America
and Central America and North America.

So we are trying all of them to
get at speed at the same speed.

And after we have the infrastructure in
each country, we lay out what are the

most important services to start building.

Of course it's different in
the situation in Europe than

Because there is more unbanked population.

They need, for example, wallets
and accounts, whereas in Spain,

So we have a different distribution
of the required APIs in each one of

the countries, but we always have the
same fundamental strategy in all the

countries, which is being important
in the world of open banking and

We don't want to lose the
opportunity in the whole world.

David Penn: That's really an interesting
point that you make given the reach of

BBVA across the world and how different
regions really have different ways

of accessing the same basic idea like
you said of the embedded finance.

Is that a very challenging thing for you?

Or is that sort of an
exciting opportunity?

Jose Luis Navarro: Of course, it's really
challenging in each one of the countries.

The first one, I could
say that is regulation.

But if the country doesn't have
a regulation, it's difficult.

It's difficult to kickstart open banking.

Because the bank doesn't feel that
they are responded by any law or that

they think a regulation will come
over and whatever we have started

Having a minimum regulation is
good, at least to kickstart.

And after having that regulation,
it's good to allow us to breathe.

I really want a regulation to be able to
set the playing field for our players.

You need to comply with
these three aspects.

So don't tell me what product I
have to offer because the product

The most immediate need of each country
is not about what the regulator thinks.

So that's why I think that it
is like an even thought, right?

Among, the like banks, regulators
in each of the countries.

Are there any other sorts
of challenges you mentioned?

I thought that was a very great
point about the difference between

different countries, some with a
very tight or stringent regulatory

Are there any other sorts of challenges
you're unrolling some of this out?

Jose Luis Navarro: Yeah I will say
maybe it's not a popular opinion for

bankers, but in reality, the why - why
finance open banking is not going as

We are not really 100 percent
ready for accepting customers that

So you can imagine, and I'm talking
about the, how you say, the metadata

of BBVA not all the API, which
is perfect and not about the open

But for example, when we have an
enterprise or company asking us for a

loan and that company is not my real
customer, it's the customer from my

Jose Luis Navarro, Head of Open Banking Strategy, BBVA, joins us at FinovateEurope to discuss open banking strategies. He talks about the biggest challenges across multiple geographies and shares his vision for the future of open banking.