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1 BBVA - Thinking Ahead Money 2020 Europe Copenhaguen, April 4 th 2016

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Page 1: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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BBVA - Thinking Ahead Money 2020 Europe

Copenhaguen, April 4th 2016

Page 2: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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Index

Reshaping of the Financial Industry

Our Transformation Journey

Conclusions

1

2

3

Page 3: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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1 Reshaping of the Financial Industry

Page 4: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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Big Data Blockchain Cloud A.I. Biometrics

New disruptive entrants transforming each vertical

New technological developments

Banking Changing at a Fast Pace

Lending Wealth Management Payments

Unbundling by new players: category killers

Superior value proposition

Lower cost of operations

Lower barriers for customers to switch

Page 5: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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Mobile Banking Exceeds Branch Banking Percentage of banked customers - US

Technology Shifting Customer Behaviors Exponential growth of

mobile banking

Distribution model under disruption

Banking anytime, anywhere

Unsatisfied demand

40%

30% 29% 30%

28%

24%

9% 9% 11%

22%

27%

30%

2010 2011 2012 2013 2014 2015

Branch banking Mobile banking

Source: 2015 GA Javelin LLC

Page 6: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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Incumbents Face Many Obstacles to Succeed in this Context

Conservative risk approach

Risk aversion as a standard within the industry

New competences

Lack of capabilities necessary to compete (Design, UX, Big Data…)

Cultural shift Transformation requires embracing cultural change

Legacies IT platforms, costly branch networks, pain points…

Opportunities for banks in this new environment

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Page 7: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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Our Transformation Journey 2

Page 8: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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Redefining Our Value Proposition:

Assist our customers in their business and throughout their financial life

Help them achieve their goals

Having a true impact on people’s lives and companies’ businesses

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Major Causes of Stress

More than a bank, engine of opportunity

Our purpose is to bring the age of opportunity to everyone

Money PersonalPressure

Health andRest

#1 #2 #3

Source: GfK survey among 22 countries – multiple answers

Page 9: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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1 New standard in customer experience

2 Digital sales

3 New business models

4 Optimal capital allocation

5 Unrivaled efficiency

6 A first class workforce

Strategic Priorities

Page 10: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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Ambition to become leaders in customer recommendation

Focused on Providing the Best Customer Experience

Design New Design and UX capabilities

Data Leveraging data to customize value proposition

New functionalities Revolution of the small things

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Source: BBVA; Peer Group: Spain: Santander, CaixaBank, Bankia, Sabadell, Popular/ USA: Bank of America, Bank of the West, Comerica, Frost, Chase, Regions, US Bank, Wells Fargo // Mexico: Banamex, Santander, Banorte, HSBC// Peru: BCP, Interbank, Scotiabank// Argentina: Banco Galicia, HSBC, Santander Rio// Colombia: Bancolombia, Davivienda, Banco de Bogotá// Chile: BCI, Banco de Chile, Santander // Venezuela: Banesco, Mercantil, Banco de Venezuela

NPS Position in ranking peer group

#1 #1 #6 #3 #1 #1 #2 #1

Relationship Model Seamless across channels

Page 11: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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9.3

17.9 19.2

2.4 7.5

29.6

5.4

16.1 20.3

Jan.15 Jun.15 Dec.15 Jan.15 Jun.15 Dec.15 Jan.15 Jun.15 Dec.15

Consumer Loans Sold Digitally (%)

Spain Mexico South America

Driving Digital Sales and Launching Digital Products

Digital Onboarding

One-click products

Digital offer

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Mobile customers

9M 45% growth from Dec-14

to Dec-15

Digital customers

15M 19% growth from Dec-14

to Dec-15

Source: BBVA

Page 12: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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Developing New Digital Businesses

Lending Payments Wealth Management

Open Platform

Vertical Banks

Identity Insurance

Areas of focus

New independent business models and revenue streams, while supporting the wider transformation within BBVA

Page 13: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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Adapting to this New Ecosystem by Creating, Partnering and Investing in Disruptive Business Models

Open Platform

Internal Incubation

Strategic Partnerships

Digital M&A and direct investments

Venture Capital

29.5% stake

Page 14: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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Internal Incubation Design, build and grow new ventures

Internal Incubation

Strategic Partnerships

Digital M&A and direct investments

Venture Capital

The Foundry

Incubator of internal initiatives

Entrepreneurs in Residence

In house development of external ideas

Venture Co-creation

Partnering for joint development

Leveraging BBVA assets and the innovation ecosystem

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Page 15: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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Strategic Partnerships with FinTech Players

Internal Incubation

Strategic Partnerships

Digital M&A and direct investments

Venture Capital

Current Partnerships New business opportunities

Exploring new technologies

Knowledge sharing

Areas of focus

Lending Payments Identity Risks

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Page 16: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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Digital M&A and Direct Investments Building new capabilities and acquiring innovative business models

Internal Incubation

Strategic Partnerships

Digital M&A and direct investments

Venture Capital

Nov-15: UK’s first mobile-only bank licensed by the PRA. Launch early 2016

29.5% stake

Apr-15: Leading UX and Design firm

Dec-14: Spanish startup specialized in Big Data

Feb-14: Digital bank focused on CX

Mar-16: Online banking service for SME’s

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Page 17: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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Venture Capital Fund Investing in startups that are rethinking financial services

Internal Incubation

Strategic Partnerships

Digital M&A and direct investments

Venture Capital

$250 Mn Venture Capital fund

with global scope Portfolio

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Page 18: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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Modularization of finance Enable new developments combining BBVA’s APIs, client’s technology and other building blocks

Open Platform Strategy as an Enabler Supporting financial innovation

API Client

BBVA Open API’s 3rd party API

BBVA Open APIs A unique set of services (banking product, compliance, risk, legal, etc..) Competitive advantage

API Client API Client

3rd party API

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www.bbvaapimarket.com

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Conclusions 3

Page 20: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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Conclusions

BBVA is taking an active role in the innovation ecosystem

• Developing internal ventures

• Establishing strategic partnerships with FinTech

• Acquiring or Investing in innovative players

• Opening our platform as a lever for growth

Banking industry is undergoing a structural transformation with mobile as key element

BBVA transforming into a better bank for our customers

• Clear vision and roadmap around 6 strategic priorities

• Offering the best value proposition to our customers

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Page 21: BBVA - Thinking Ahead · Spanish startup specialized in Big Data Feb-14: Digital bank focused on CX Mar 16: Online banking service for SME’s. 17 Venture Capital Fund Investing in

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BBVA - Thinking Ahead Money 2020 Europe

Copenhaguen, April 4th 2016