Engineering and Digital Transformation
In 2015, the Group organized its Engineering and Digital Transformation activity around the following lines of action:
- Developing the technological architectures toward more uniform models, boosting the adoption of cloud computing.
- Transforming the Technology production function by incorporating elements of new technologies.
- Optimizing processes in search of improved customer experience, efficiency and operational control.
- Guaranteeing integrated management of security, as well as control of operations and information security.
- Facilitating the integration of Catalunya Banc Group and Garanti Group.
Infrastructure
The increasing use of digital channels by customers has exponentially increased the processing needs of technological infrastructure. In 2015 the Group continued to make progress in its plan to construct a network of four new next-generation data centers, two in Madrid and two in Mexico, which will operate on a crossed Business Recovery Services (BRS) model. In 2012 the first Data Processing Center (DPC) became operational in Madrid and in 2015 the first entered service in Mexico. In 2016 two additional ones will begin operations in Mexico and Madrid.
In 2015 the BBVA DPC 1 in Madrid obtained Tier IV certification in construction from the Uptime Institute and the LEED® Gold Sustainable Building Certification granted by the U.S. Green Building Council (USGBC). In Mexico, rooms 1 and 2 of the DPC obtained Tier IV certification in construction from the Uptime Institute.
A number of projects have been completed over the year, with the aim of boosting the construction of new corporate headquarters in Spain, Mexico and Chile to improve efficiency, corporate culture and digital transformation. With this aim, work has been carried out on the design of "new forms of work" and the implementation of technological teams to respond to these designs with the aim of creating spaces that favor collaboration, simplicity and improved user experience.
Of note is the technological renewal of the equipment in the branch network in Spain, which has involved the renewal and update of 19,402 pieces of equipment, the replacement of 3,600 financial printers and the acquisition of 2,600 personal scanners. The Ulises Project has been a highlight in Mexico, culminating with the successful installation of more than 1,600 devices (ATMs and "practicajas") in over 600 branches that have been completely refurbished.
Architecture
Continuing with the technological transformation project begun by BBVA in 2007, the role of Core Banking systems has been strengthened in each of the geographical areas (Spain and Portugal, Mexico, the United States, South America and CIB at global level), with the aim of having modular technological platforms available with a customer-centric vision.
Our main core banking platforms have continued to gain power in products and functionality (product catalog, configurability, etc.), and the migration and/or shutdown of old applications has continued. The data platforms have also carried on their development under the boost from the Informational Platform project, with particular emphasis in Spain and Mexico, also incorporating new technologies that use Big Data into our capabilities.
Similarly, with respect to Architecture the rate of improvement in the channels has been maintained, above all the web channel (bbva.net) and the mobile app channel, with the incorporation of new products and functionalities such as one-click purchase of products and services. There has also been work on the continuous improvement of user experience, with technological foundations that are both solid and innovative (for example, the use of the HTML5 language in the digital channel). Specifically, in Spain there has been progress in migration toward a robust multi-channel architecture focused on integrating Net, Mobile, Branches, etc., and acting as a launching pad for plans in the rest of the countries.
In most of the Group's geographical areas, there has been significant progress in the expansion of three-layer ASO Architecture Services designed to simplify, modularize and reuse our technological services.
In the area of architecture and infrastructure, a new low-cost and scalable processing architecture (APX) has been extended in Spain and Mexico to absorb the exponential flow of transactions efficiently and migrate some of the loads with the biggest impact on processing costs.
Looking forward, an architectural transformation plan has been implemented in two phases:
- The first phase includes a new boost to the adoption of technologies and models for Cloud operations. Infrastructure with low-cost servers, automation and operational scalability (SW-defined everything), platforms constructed "as services" (Middleware, Data, Core Banking, SaaS), with open-source systems and code reuse (global and more uniform developments).
- The second phase focuses on artificial intelligence to capture all the potential for extreme automation of the processes, based on machine learning and cognitive computing technologies.
The aim of this plan, on which the Group is already working, is to provide an architecture that can improve the productivity and reliability of its platforms: process high volumes of transactions at low cost and with the highest levels of stability; develop quality software globally and efficiently; increase the delivery times of our products; and work on automating our productive life cycle.
Process transformation
In 2015 significant progress has been made on process transformation, providing many processes with multi-channel capacity and aiming to increase the level of customer satisfaction and loyalty. This goal involves a clear commitment to invest in projects designed to increase customer satisfaction, regardless of the channels through which customers operate. These projects include:
- Progress in implementing BBVA Wallet in Spain, Mexico, various parts of South America and Turkey (where it is called BonusFlas).
- The development and implementation of one-click strategies, which allow quick and easy product purchase.
- Complete renewal of banking websites in Chile and Uruguay and the implementation of the NetCash website for companies in Chile.
- The BBVA Provincial Onboarding project, which aims to improve customer experience, starting from the time the customer makes initial contact with the bank.
- The implementation of the Ekip platform for loans to retailers in Mexico and Chile.
- The development and implementation of the Digital Signature, both in Spain, Mexico and countries in South America.
Finally, it should be noted that the magazine Money chose BBVA Compass as the "Best regional bank in the South and West of the United States" and its BBVA Compass Mobile Banking app as the best mobile application in its annual Best U.S. Banks awards in November 2015.
Operational and Technological Risk Management
In 2015, as part of the organizational reconfiguration of the Engineering area, a Control function called Engineering Risk & Corporate Assurance was set up to develop and maintain the control model, and to manage the active risks related to business and technological processes, within the framework of the Corporate Assurance model.
As part of the business process control model, in 2015 the Operational Control function has focused on implementing a new scheme of standardized control in all the Group's companies and businesses, with the focus on the most relevant processes and risks. At the same time, significant progress has been made in managing the main operational weaknesses.
In terms of Technological Risk, the Group has continued to make progress on the three pillars that make up this discipline: information security, technological fraud management and IT risk management. It is worth highlighting the effort made in 2015 in terms of adapting the levels of information protection to the new challenges arising from the Group's Digital Strategy.
At the same time, in 2015 BBVA CERT (Computer Emergency Response Team) has consolidated its position as the nerve center of BBVA Group's cybersecurity and fraud strategy. CERT carries out all the monitoring, immediate response, limitation and investigation of incidents 24/7, supported by sound analytical and intelligence capabilities to handle both cybersecurity and fraud threats.
In addition, a technological risk measurement methodology was developed and implemented in 2015, based on indicators linked to the international Cobit 5.0 standard. BBVA has also initiated a process of adopting the standard issued by NIST (National Institute for Standards and Technologies) relating to cybersecurity, as a framework of reference for management and control.
Lastly, in the area of Business Continuity improvements are being made to the different procedures for recovering content in the Continuity Plans in the case of low-probability but very high-impact events. Work has been done to update and improve the plans through technical and crisis management tests that also allow training of the people involved in these situations. Some of these plans were fully or partially activated during the year, as in the following cases: the eruption of the volcano Calbuco on the border between Chile and Argentina; the threat posed by Hurricane Patricia in Mexico; and minor seismic movements that nevertheless affected operations in the state of Mérida (Venezuela) and the north of Chile.
Catalunya Banc and the Garanti Group
In Catalunya Banc, one of the relevant milestones achieved in 2015 has been the creation of a complete Business Recovery Services (BRS) environment for its DPC 2 systems in Madrid, with the aim of ensuring the uninterrupted continuity of operations in case of a disaster. The Garanti Group also serves as a key point of reference for best practice in the development and operation of technology through Garanti Teknoloji.