Central to that "huge change" is the realization of the goal of real-time banking. BBVA recognized that the long-standing batch processing, transaction banking model was an impediment to the type of relationship banking it sees as key to growth. "We had a good sense of the opportunity that was in the universal or relationship banking model, the ability to serve the client [around] more comprehensive aspirations on the financial services value chain," Sanchez says. "This will allow us to be a better relationship bank, to be there for [customers] when they need us."
Not only is batch processing an outmoded technology, he adds, it does not support the kinds of immediacy and transparency that customers now expect. "Try to explain to a millennial batch processing! This is a real-time world we're in," Sanchez says. Real-time thus offers "a very interesting advantage." Getting to real time, and doing so in a way that effectively integrates multiple delivery channels, requires a modern "architecture that allows you to be customer-centric, serve them in real time, and be multi-channel."
[Read more about BBVA Compass' mobile banking strategy.]
There also are operational benefits that come with abandoning batch processing. "Real-time processing means the process no longer divided between what happens in the channel and what happens in the back office," Fidalgo says. "That leads to lower back-office costs, fewer mistakes and smaller reconciliation efforts. It's [improving] customer experience and helping the efficiency of the bank."
BBVA Compass is counting on the Alnova system to help it bring new products to market faster. "The main difference with the legacy system is that, instead of having to code [software], it's parameter-based," Fidalgo explains. "We have to test, but we don't have to recode to create a new product." Pre-rollout tests indicated that on the new platform time-to-market could be reduced by as much as 75%, he reports.
This capability is a "game changer" for the bank, according to Sanchez. "Now we are owners of our own destiny," since BBVA Compass no longer will be dependent on vendor system upgrades in order to develop new offerings and capabilities.
Addressing both the strategic and operational aims of BBVA Compass' core systems initiative,
Bruce Voelker, senior managing director for financial services, Accenture, notes, "They eally did focus on changing the business model, not just the technology. So it's really a combination of people, process and technology. From core banking transformation point of view, that's how you do it."
BBVA Compass remains somewhat unique among U.S. banks in terms of the scope of the project, according to Voelker. "There are organizations looking at making changes, but this is a comprehensive, end-to-end change, and not many organizations have taken that on [because of the] complexity and the risk. The industry will continue to need to make changes [in core systems] to continue to serve customers in the way they want to and need to in the future, and to address the changing environment in which banks are operating in North America."