Dive Brief:
- "Data is being hoarded by the companies that gather it, and we have to change that," BBVA's group executive chairman, Carlos Torres Vila, told an audience last week at the Money20/20 conference in Las Vegas.
- Giving individuals the power to control their own data would fix an imbalance in the current power dynamic and may even be a social imperative, Torres Vila said.
- Among banks with a U.S. presence, BBVA is positioned as a leading advocate for open banking. Because the bank is Spanish, it has to comply with Europe's second payment services directive (PSD2), which requires financial institutions to share bank account data in real time, given that the customer consents to it, through secure, direct and standardized channels.
Dive Insight:
"The more data you have, the more value you have," Torres Vila said in Las Vegas. But that statement sets up a varying power dynamic depending on one's geography and regulation.
Europe's open banking system empowers consumers by giving them more control of their data, according to Torres Vila. The U.S. lacks such a framework, giving the holder of data greater power.
To that end, the BBVA chief advocated for a "global, cross-sector regulator" that follows the path set by PSD2.
"While PSD2 created some backlash amongst banks in Europe, I think it is a great idea and should be extended to all data, in all sectors from telecoms to online purchases, and e-commerce to travel, anything," he said.
In contrast to Torres Vila's stance, tech companies have long argued that banks have been the less forthcoming party in sharing customer information. Some companies have accused banks of cherry-picking fintechs to work with — and leaving the rest out in the cold — and thus going against data-sharing principles the Consumer Financial Protection Bureau (CFPB) put forth in 2017.
Although it's based in Spain, BBVA has more than 600 branches in seven states, forcing it to abide by multiple sets of regulations. That's hardly unique for a global bank. But Torres Vila said the lack of uniformity in regulation — and consequently, access to data beyond just the banking sphere — hinders BBVA from its mission to help people meet their financial goals — particularly, to save more.
"Mandatory data sharing would kick-start competition, provide new opportunities and help us understand customers better and develop new products," he said.
But such data isn't merely important for business. It can bring on positive disruption, Torres Vila said.
"Data and technology can and should be used to create a more sustainable world, significantly contributing to address two major concerns: the climate crisis and the social challenges related to inequality," he said.
"Data is an extension of the individual's identity: the places you have been, what you like, what you buy, etc.," Torres Vila said. "Large digital players base business models on data they collect from millions of interactions ... That added value drives more business and generates more data. It's a virtuous circle of data."
