Business Intelligence in the Worldwide Expansion of Spanish Bank
Snapshot
| Organization Banco Bilbao Vizcaya Argentaria (BBVA), Spain's second-largest banking group, with US$281 billion in assets, US$10 billion in before-tax profits, and 108,000 employees in Spain and Latin America. |
| The Challenge Reducing risk and streamlining operations in midst of rapid mergers and acquisitions. |
| The Strategy Invest in IT, particularly in customer information systems, leveraging Information Builders' technology so business managers can uniquely distribute and analyze information in every country. |
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| Information Builders Solution WebFOCUS, FOCUS. |
The world of Banco Bilbao Vizcaya Argentaria has changed dramatically over the last 20 years. At first it was a small world, focused on Spain. But through mergers and acquisitions, its horizons expanded significantly.
Dramatic expansion into Latin America added holdings in Argentina, Brazil, Chile, Columbia, Mexico, Peru, Puerto Rico, and Venezuela.
One of its most recent mergers, with Argentaria, Caja Postal & Banco Hipotecario, created Spain's largest banking group. A deal with an Italian partner formed the European Union's first cross-border banking partnership. And after the merger of nine financial markets in Spain, BBVA became one of the largest shareholders in the resulting exchange.
Standardized on FOCUS
In spite of these shifting markets, and challenging economic and regulatory environments, one thing hasn't changed at BBVA: the enterprise information systems (EIS) and business intelligence applications that the bank's central information systems run on.
BBVA standardized on FOCUS from Information Builders at the time of the bank's first significant merger. Since then it has trained many knowledge workers and business analysts to generate their own reports in FOCUS. BBVA counts 2,500 users who are adept at writing FOCUS programs and another 17,000 employees who take advantage of "insight information" programs written in FOCUS, including the bank's board members and senior managers.
Used primarily for budgets, monitoring product activity, and generating financial reports, FOCUS is the core of the management information system developed by the bank. Through international mergers, the development of radical new products and offerings, and broad international partnerships, FOCUS has kept the beat of BBVA's management information system.
"They use this system to enter their objectives, get data on the results of those objectives, and see how well new initiatives, such as a new credit card, are doing," says Carmen Iñarritu, systems and information technology director for the bank's financial services division.
BBVA makes unusually broad use of FOCUS: Although many companies use FOCUS in concert with relational databases from major database vendors, BBVA continues to use Fusion, a high-performance database also from Information Builders that, in one case, hosts more than 250 million records on a mainframe.
WebFOCUS Power for Users
As the bank began to span two hemispheres, and its staff grew from a few thousand employees to more than 100,000 – 72,000 of them in Latin America – BBVA turned to WebFOCUS, which gives users browser access to data and reports built with FOCUS technology.
Some 1,500 bank staff use WebFOCUS reports to measure productivity, monitor trends such as the number of new accounts, assess loan risks, and get alerts about loan defaults. It's also the application of choice for monthly reports such as profit and cost by branch, product, and customer.
The benefits of WebFOCUS are twofold, says Iñarritu:
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The bank has been able to better tailor its products for local markets and to identify the best customers, which increases customer loyalty and revenues |
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Costs have been reduced as the bank has been able, to reduce loans to higher-risk customers; WebFOCUS has also reduced the number of staff engaged in extracting data used for making management decisions |
"The bank that has lots of systems has lots of problems," says Iñarritu. "The evolution from FOCUS to WebFOCUS has been very smooth. We got a lot of synergy when we installed WebFOCUS. It offers the same security, the same way of controlling applications, almost the same code that we have been using."
BBVA has continued to propagate use of FOCUS, and more recently WebFOCUS, because of the power it offers users.
"Users are a bit apprehensive at first," Iñarritu explains. "It's a shock to come to work and discover that your information system has changed. But when we start working with them and they understand that we are really giving them a powerful solution and will work with them to make sure it delivers the results they need, they get excited and involved."
One of the keys to BBVA's extraordinary success with expansion and mergers is its willingness, in the highly ordered world of banking, to use software that gives staff independence and control. Iñarritu says static, canned reports are acceptable for people who need to look at data only for reporting purposes, but the bank wanted to put the best solution it could in front of departments that need to make decisions.
"You always find that your users need special access to data." she notes. "Sometimes they need to know something you have not thought about. They ask questions that haven't been asked before, and that aren't answered by the reports you have prepared."
Expanding for the Future
Such capabilities have been critical to the bank during its expansion. Most mergers are fraught with dangers and complications for banking information systems. Different business processes, varied client software, and incompatible databases can add a host of complications to the already difficult task of blending people and corporate cultures into a smoothly functioning entity.
BBVA has benefited significantly from the popularity of FOCUS in the Spanish banking sector: many of its mergers have been with other banks that also used FOCUS and WebFOCUS, substantially easing the hitches that typically hold back a merged company.
The result has been what one analyst has called "model mergers" that have given BBVA a leg up on its competition, preserved shareholder and customer value, and positioned it to take advantage of new opportunities in the European market.
