BBVA Brings a Real-Time Core to the U.S.

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Sergio Fidalgo, chief information officer of BBVA Compass, is deploying a new core, real-time transactions across all channels and a new CRM system to support long-term customer relationships, instead of one-off product sales at the bank.

Although he's too polite to come out and say it directly, a theme that emerges when Fidalgo talks about the core banking overhaul he is overseeing is that European banks tend to take a more careful and customer-conscious approach to technology than those in the U.S. The point of this huge project, an upgrade of all foundational technology at the $62.7 billion-asset BBVA Compass, is to build long-standing customer relationships — the refined European way — rather than to innovate on and sell individual products, the American way.

BBVA, of Madrid, bought Compass, in Birmingham, Ala., in 2007. The parent company is gradually shifting the bank from being product-oriented, with one head of deposits and one head of consumer assets, to a management divided by customer segments — there's now a consumer group and a small-business segment. One level below are the product specialists. "This is a clear sign of trying to move the organization from, instead of bringing the product to people, figuring out what customers need, and then from that answer, working on delivering products," Fidalgo says.

To make the bank's technology infrastructure match its customer relationship vision, BBVA is migrating the bank to a new core system, Accenture's Alnova, and deploying a new customer relationship management system created by BBVA Group. "We're breaking the silos we have, not only the product silos but also the line of business silos," Fidalgo says. Before, each division had its own CRM database; the new CRM system being imported from the central BBVA group will be a single storehouse for customer data for retail banking, wealth management and commercial banking. "This will ease a lot of the dialogue between lines of business," he says. The CRM software is up and running for retail and wealth management. The bank is still modifying the commercial portion, which is expected to be ready in the second quarter of 2012.

"We're working to provide employees with that full view of the customer portfolio," Fidalgo says. "We'll be working in the future on referral systems between these lines of business."

The Alnova system has one central customer information file that will store basic information from customers (even commercial customers), such as name, address, Social Security number and phone in one place, which Fidalgo refers to as a "golden file."

The conversion from a fragmented architecture to a single CIF was somewhat challenging, Fidalgo notes. "You have to clean the data, and you have to make sure you're populating the database with the right data that you might have had in six different places," he observes. "But we're already working actively on that conversion. The cleaning of the data is being done as we speak."

The customer data is replicated between current and new systems, so that all will be ready when the bank goes live with deposits on the new system. This will be rolled out state by state. "This is something we're planning very carefully," Fidalgo says.

A Phased Approach
The bank has broken down the project into three releases. First is an infrastructure/architecture release. "It's not a business release, it's not something we put in branches, it's something we have yet to give to our operations people, but it's a foundation for the rest of the modules that are going to be sitting on top of it," Fidalgo explains. The architecture and the customer information file went live at the end of May. "That was a big step. It doesn't really impact the business, but it's absolutely critical to be able to put the rest of the modules in place."

The next release is for deposits, including checking accounts, savings accounts and CDs. The bank is still testing this part of the system. An integration test has already been done. Next to be tested are performance and user acceptance. "It's a complex project; we have people working all over the world, we have 20-hour-a-day support for the development and testing from Beijing, Manila, India, Madrid and Mexico," Fidalgo explains.

This attention to testing is somewhat unusual and may be the key to the success of this project. "You have to test everything, not only your mainframe and backend operations, but also your branch, call centers, ATMs, Internet banking and mobile banking," Fidalgo says. The goal is to avoid any disruption in customer care due to the conversion.

"Their approach is very measured in terms of approaching this step by step, which allows them to be more diligent and to focus more on customers as they go through the process," says Wayne Busch, managing director of financial services at Accenture.

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Comments (1)
I am a rather long time customer of BBVA and I have a very different opinion of the new Real Time banking, that looks to have been in operation for a few weeks. I have several businesses that I own and run each through Compass. With two of the businesses being franchise businesses, franchise companies pull royalties via ACH each week. The problem I have had the past few weeks, I often don't know what the total ACH amount is going to be until the day before. When I know how much it is, I will move money over the following day to cover the ACH amount. Well, I have had over $150 already of NSF charges. Plenty of money was in my account at the end of the day to cover all liabilities, but because of their real-time banking system, the EFT amounts happened to come through in the morning, and I didn't make my deposits until the afternoon, and I was hit with a $38 NSF charge.

I talked with the branch manager at the McKinney TX branch, and his suggestion was that I get overdraft protection, such that it drops all of the NSF charges to $12. Basically, if I stay with compass, because of the nature of my franchise business and having a separate account for ACH amounts, BBVA Compass Bank will end up loosing all of my business. I hope the Real-Time banking brings enough NSF charges into their bank to cover the number of dis-satisfied customers that decided to leave as a result.

I really hope they stop lying and trying to spin Real-Time banking as a positive for the customer. I recently deposited a 20k check, and still had to wait for 10 days to have it clear. How does Real-Time banking help me again?
Posted by mikepol | Saturday, September 22 2012 at 8:13AM ET
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