BBVA Chairman Carlos Torres Vila this week strongly criticized the technology companies that use consumer data to offer financial services but won’t share their data.
“Today data is being hoarded by the companies that gather it, and we have to change that,” Torres Vila said Tuesday at the Money2020 conference in Las Vegas. “We can change it to bring in a new age of disruption, innovation and competition, bringing a more inclusive society and a more sustainable planet.”
Torres Vila’s remarks turned the tables on the many critics in the tech and fintech community who have accused banks of being unwilling to share data.
Banco Bilbao Vizcaya Argentaria is based in Bilbao, Spain, and its BBVA USA unit in Birmingham, Ala., has more than 600 branches in seven states. It has been a pioneer in open banking and data sharing. To some extent, it has been forced to do so because of the PSD2 regulation in Europe, which requires banks to share bank account data with accredited third parties whenever customers request it.
But Torres Vila also positioned open banking and data sharing as part of a social mission.
“Technology and data will be essential to address equality and financial inclusion,” he said.
BBVA wants to help clients make better financial decisions around money and meet their personal and business goals, Torres Vila said. Fifty percent of people do not regularly put money aside, he said.
“We can improve decision-making, support people and support businesses,” he said.
The bank could do all of this more effectively, he argued, by having access to different kinds of data beyond banking data.
“Large digital players base business models on data they collect from millions of interactions,” he said. “They create value by personalizing the experience. That added value drives more business and generates more data. It’s a virtuous circle of data.”
But mostly those companies are hoarding that data, he charged.
“They’re keeping it for themselves, they leverage it to enter more businesses, they’re ever expanding their reach and gaining immense market power,” Torres Vila said. “Data is the new oil — the more data you have the more value you have.”
But where oil gets exhausted with use, data use can be repeated, to the benefit of society, he said.
“The only limit to this should be privacy,” he said.
Data belongs to the data subject, and it should only be used if that person knowingly consents to its use, he said.
“Sharing that data with other companies, including competitors, should be mandatory,” Torres Vila said. “The dynamic changes with this view. Data no longer becomes a proprietary asset. Consent appears as the gateway. Consent implies trust, more business means more data ready to be exploited, bigger wave of disruption.”
The value created should be returned to the data subject, he said.
“When a lot of people talk about breaking up fintechs, I vouch for opening up the data,” he said.
There is a lot of opportunity for banks in shared data, he said.
“Banks are placed like no other to play this game,” Torres Vila said. “People have entrusted banks with their money for centuries.”
Banks could use telecom, purchase, e-commerce and travel data, for instance, to enhance their offerings and create new products.
“Mandatory data sharing would kick-start competition, provide new opportunities and help us understand customers better and develop new products,” he said.
There is a need for worldwide regulation to make this possible, Torres Vila said.
“It’s a messy situation,” he said. “More than 100 countries have different rules,” he said.