DIGITAL TECHNOLOGY REVOLUTIONIZES

BUSINESS TRANSFORMATION

OLYMPIC

INNOVATION
01
04
07

Fintech

Drones

Big Data

FINTECH SERIE BY

02
05
08

Blockchain

Robo advisors

Financial
inclusion

innovation edge

03
06
09

Payments

Internet of the
things (IoT)
Digital
Transformation

01
Fintech madness
In June international experts touched down at
the Innovation Center in Madrid to talk about
the fintech revolution. All concurred that the
digitization of traditional banking gives a great
impulse to the fintech sector, which is
experiencing a historical moment.
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Forbes has stated that the global take-up rate for

fintech understood as the percentage of users in the
digitally active population is currently around 15.5%.
The three main cities dominating the market are New
York (33.1%), Hong Kong (29.1%) and London
(25.1%), according to Ernst & Young.
Goldman Sachs values the fintech market in the
United States at 4.7 billion dollars. At the Fintech
University conference held in the BBVA Innovation
Center in Madrid it was emphasized that
"collaboration between governments, traditional
banking and fintechs is essential to create a new
financial environment".
Among the many fintech companies playing a
prominent role this year, we call attention to three:

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Atom Bank
Atom Bank --The first mobile access bank to obtain a
license in the United Kingdom, in which BBVA has a
29.5% stake allows customers to be registered
completely online. Its use of machine learning to
speed up customer queries is an outstanding feature.
This startup company, based in the city of Durham in
England, also uses biometric technology and
gamification. Its co- founder and CEO, Mark Mullen,
emphasizes that users, "don't care where the
technology used to create the products and services
comes from. They just want a transparent
relationship with services understood as a
platform".

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Las GAFA
Google, Facebook and Alibaba also aspire to
becoming the Uber of banking. The GAFA (Google,
Apple, Facebook and Amazon) companies do not
want the fintech revolution to leave them behind.
With millions of users, they are playing an ever more
prominent role in the financial ecosystem. The
Google Wallet mobile payment system allows
consumers to make purchases online and send
money by email; Apple Pay is a digital wallet and
mobile payments service; Facebook Messenger
allows users to send money to each other; Amazon
Lending offers loans and Alibaba has 400 million
active users monthly for its AliPay Wallet6, highlights
this report by Accenture.

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N26
N26- This year all eyes have been on this Berlin based
startup, which has triumphed with users and aroused
interest in the banking sector. The bank is expanding
in seven countries Germany, France, Greece,
Ireland, Italy, Slovakia and Spain and already has
around 200,000 users despite its short life. One
particular feature it has is that it only takes 8 minutes
using a mobile phone to open an account.
Another of its strong points is the use of artificial
intelligence to offer services to its customers.

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02
Blockchain: the
technology
behind bitcoin
Blockchain technology became famous
thanks to the bitcoin currency, although
it is increasingly looking like
cryptocurrencies will be sidelined and
blockchain technology will be used in
many sectors, not only in the financial
industry.
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Energy, services, telecommunications,

transportation and many other companies will
benefit from blockchain technology, which in 2017
and 2018 independent from the famous bitcoin
currency is expected to extend far beyond the
financial sector, where it is already playing a key
role.
In fact, numerous companies are already embracing
this technology which BBVA Research defines as a
peer-to-peer public accounting system maintained by
means of a distributed network of computers which
requires no central authority or third parties acting as
intermediaries.

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Everledger
The startup that won the latest edition of BBVA
Open Talent specializes in antifraud security. This
English company has created a system to detect
irregular actions in the diamond trading market
thanks to the traceability of the stone. And all
thanks to so-called blockchain technology. The
combination of primary diamonds with blockchain
technology makes it possible to create transparent
and secure accounting with a focus on
commerce.

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Ethereum
Finally, and although it looks like blockchain
technology is set on taking a different path from
bitcoin, we shouldn't overlook the importance of
technology in the financial world. Ethereum is the
new buzzword for candidates looking to replace the
bitcoin currency.
The cryptocurrency created by Vitalik Buterin is
encrypted in the same way as bitcoin, although the
difference is that it not only focuses on currency
exchange but also makes smart contracts.
It currently already has 20 million dollars in
circulation. And rising.

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Provenance
Run by Jessi Baker and Jutta Steiner and
headquartered in southeast Asia, it provides an
important opportunity for transformation in the field
of logistics, transport and other mercantile activities.
The region is home to four of the five most
important transport ports in the world Shanghai,
Shenzhen, Singapore and Hong Kong and this
umbrella includes a wide variety of activities that
Provenance is looking to develop, such as the luxury
goods sector.
Thanks to blockchain technology it has been able to
eliminate intermediaries in one of its potential
markets: the world of art. One of the aims of this
startup is precisely to revolutionize this sector.

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03
Payments: Traditional banking
reacts to new players
Payments are undergoing a revolution in both the emerging and developed markets. Apple,
Facebook, Google and Amazon (the "bad boys" of the technology world) are changing the rules
of the game.

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According to Forbes traditional banks in

developed markets are facing a "triple threat":
Apple, Samsung and "the others." And these
players are generating technological changes at
such a fast pace that no consumer can help
noticing them. In this new context, traditional
banking must prepare its counter-attack.
BBVA Compass, for example, signed an
agreement with the technology platform Dwolla
so that all of the bank's customers can use the
U.S. startup's network in real time to carry out

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transfers. This agreement will guide BBVA's

digital transformation so as to respond to new
consumer habits customers wish to make
payments in real time 24x7.
As for emerging markets, the interoperability of
"mobile" money is taking giant steps forward since
it was first launched in Tanzania. As a result,
there has been a rise in financial inclusion, an
improvement of the customer's life by
streamlining banking activities and transactions
and an increase in speed and convenience during
their day-to-day routine.

Forbes stresses the success of interoperability in

developing markets in Africa. Interoperability reached
Africa in 2014 with a pioneering agreement between
Tigo, Airtel and Zantel, a collaboration which Vodacom
has recently joined. With this agreement, Tanzania
became the first African market with full
interoperability for peer-to-peer mobile money
transfers.
Back in Europe, Spanish banks have just invested 100
million euros in the Bizum platform for peer-to-peer
payments via a mobile application. This application
also makes it possible to make payments in ecommerce retailers as well as contactless payments in
physical stores. This project is a reaction to the threat
posed by technology giants such as Samsung, Apple,
Vodafone Wallet and Orange Cash.

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04

The year of the drones

Drones are conquering the skies thanks to interest from
investors, their appeal to consumers, market possibilities
and favorable regulation.

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Drones have conquered the skies in the first months of

2016. And their rise looks unstoppable. Amazon has
just announced an agreement with the United
Kingdom to launch its Prime Air service for drone
delivery in rural areas.
The Amazon agreement, which will see the service
rolled out in England ahead of the United States, is
designed to deliver packages of up to 2.2 kg within
half an hour or less using drones capable of working in
a perimeter of over 16 km.
The difference between the United States, and what
makes it possible to deploy Prime Air in the UK is that
the latter allows drone flights beyond the view of the
pilot, unlike in the United States.

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Who leads the

drone sector?
According to the consulting company Droneii , the
Chinese company DJI is in first place. A world leader
in the sale of unmanned aircraft, the company,
founded in 2006, manufactures affordable and very
attractive drones priced at under 1,000 dollars and
is known as the Apple of the air. Its Phantom and
Inspire models have been wildly successful. The
company run by Frank Wang currently employs
3,000 people and is valued at over 10 billion dollars.
The French company Parrot is in second place in the
ranking, ahead of the American company 3D
Robotics. In 2015 Parrot sold over 1 million aircraft
and its Bebop2 model costing around 400 euros
has its sights on ending China's hegemony.

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The Spanish company Catuav, which first appeared

on the Droneii list at the beginning of the year,
receives a special valuation. Two of the models it
markets, Atmos6 and Mineos, made the list of the 10
best in the world in the 1 to 4 kg category. Catuav
also featured on the list of heavier drones with its
models Argos Electric and Furos.
The Catalan company, founded by Jordi Santacana in
2003, has won awards for detecting landmines in
Bosnia.

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05
The inexorable
advance of
robo- advisors
In the last five years robo-advisors have made
great inroads in the industry. In spite of some
initial suspicion, investors have come to trust
them as an efficient wealth management
service.
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Traditional industry is being challenged by the

demands of investment in the digital age, and roboadvisors have attracted modern investors because of
their capacity to manage modest portfolios with
figures way below the astronomical ones of the past.
Robots are cheaper than human advisors and manage
smaller sums of money, although all is not yet lost for
the flesh-and- blood variety. After all, humans have an
added value whichto date, at leastfinancial robots
can't match: a direct, personalized manner with
customers.

In spite of the advantages of dealing with humans,

there is no doubt that robo- advisors are here to stay.
According to Morgan Stanley, these automated
advisors are still at the takeoff stage but "have a long
runway for growth".
As proof of this, the pioneer in automated advice,
Betterment, has surpassed $5 billion in assets under
management by robo-advisors. Experts believe that a
hybrid systemthe systematization of robo-advisors
and the personalization offered by human advisors
will make it possible to customize services and offer
customers the best deal.
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Three companies in particular are promoting roboadvisors:

Betterment
Betterment- Offers the most complete services for
people thinking about retirement. Users enter all their
savings and investment accounts into an engine that
calculates their annual spending during retirement. It
also works out how much they need to save each
month.

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Indexa capital
Spain's automated investment manager Indexa
Capital focuses on the passive management of six
index funds. With a minimum investment of 10,000
euros, the algorithm calculates and assigns portfolios
according to the user's risk aversion, objectives, age
and income. It invests in indexed funds which
replicate both fixed-income and equity stock
exchange indices or mutual funds. Indexa builds
portfolios with unlisted investment funds, which are
cheaper than active management funds.

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Vanguard
Vanguard is one of the largest investment
management companies in the world, specialized in
index-linked funds and ETF (exchange-traded
funds). Its hybrid system automates customer data
but also uses human advisors to guarantee safety,
attracting investors who are comfortable with
technology but still want to be able to talk with a real
person.

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06
IoT: Our lives
connected to
the Internet
Devices that are wearable, cars that drive
themselves, household appliances that we can
control via wifi or bluetooth and even clothes
connected to the Internet; what more proof is
needed that we live in the age of the Internet of
Things (IoT), or rather, intelligent objects that
multiply their usefulness and make our lives
easier because of automation and the control we
have over them thanks to digital, wireless and
cloud technologies?.
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The Gartner advisory firm highlighted the fact that there were 5 billion devices connected intelligently in
2015. Cisco, on the other hand, expects this figure to increase to 50 billion devices connected to Internet by
2020. These figures reveal an increasingly exciting scenario for the deployment of more intelligent devices
and settings.
These are some of the players that are betting the most on the Internet of Things:

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Cisco IoT System

Cisco is one of the companies of reference when it
comes to connectivity, wireless access, digital storage,
analytics, security and automation and has all the
necessary features to make a name for itself among
the key players in the Internet of Things.
To do this, Cisco proposes the Cisco IoT System,
which is a comprehensive set of products and
technologies focused on creating secure IoT
applications with the main aim of providing thorough
analytical information and data. Cisco IoT System
solutions are focused on areas such as manufacturing,
gas and oil, transportation, mining and the industries
of the public sector.
Beyond the Internet of Things, Cisco is committed to
the "Internet of Everything" evidenced by its
increasing interest in the creation of intelligent cities
that boost their development based on this
technology.

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Google
One of the most important signs revealed by Google
to show its interest in the Internet of Things was the
purchase of Nest, a company that manufactures
intelligent thermostats; possibly a first step for the
development of homes that are completely
connected, managed and monitored, both
automatically and remotely. Likewise, it has made
great progress in the development of an intelligent
vehicle that drives on its own.
More recently, Google has revealed its Brillo project,
which it develops along with other companies like
INTEL and Marvell and that consists in an Androidbased operating system that is centered on the
Internet of Things.

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Amazon Web Services IoT

Amazon is one of the leading companies in cloud
services, which gives it a significant advantage in
handling data and creating connections between
services, applications and objects on a gigantic scale.
This has made it one of the most preferred platforms
of many startups that explore the IoT.
The AWS IoT promise is based on "routing" messages
and data swiftly and safely to manage and track
devices. It also allows users to create their own
applications for IoT to control sensors remotely.
Amazon recently launched Echo; a voice-operated
device designed for home use to control a variety of
applications, such as lights, thermostats, audio and
video services, news and household orders.

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07
The Power of Data
Information is one of the greatest assets a
company owns, which is why it is so important
to have an organized, scalable database that can
be consulted and, above all, can be used easily
and quickly to identify trends, predict events,
and make decisions based on reliable data and
statistics.

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Alation
Alation's mission is to help its customer find,
understand and create data management policies so
that they can make better decisions faster. Its solutions
include data search and discovery, collaborative
analytics, and data governance, all with a view to
capturing information about the data they describe,
where it comes from, whos using it and how.

SEE VIDEO

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BigML
BigML 's goal is to innovate in machine learning
technologies: in other words, in machines and
programs that learn on their own, grow and become
more intelligent to the point where they can make
predictions based on the data used to train them.
Besides, the information gleaned from the data can be
consulted in a user-friendly manner.
In an article on the portal KDNuggets comparing the
performance of Amazon ML, Google Prediction API,
PredicSIS and BigML, it was this latter tool that was
ranked the fastest.

SEE VIDEO

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Sqream
Sqream is renowned for creating an SQL-powered
technology that claims to analyze big data 100 times
faster "than any other competitor on the market". With
large-scale data management solutions targeted at
genomic research, finance, cybersecurity,
telecommunications and the Internet of Things, the
company delivers its services from the cloud, on
premise, or as a hybrid combination of both.
Forbes,The Huffington Post, The Next Web, Fast
Company and The Wall Street Journal have all carried
stories on the innovations and achievements of
Sqream, and the company is also a recipient of the
Red Herring Global Award.

SEE VIDEO

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08

The importance of
financial inclusion

Access to financial services is a key element for

rising out of poverty, and technology is heralding a
range of new models that provide a variety of
services and products that can be adapted to the
needs of each population sector.

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BBVA Microfinance Foundation

The World Bank estimates that around two billion
adults have no access to banking services in other
words, 38% of the world's population. In Latin America
this affects 210 million people. The BBVA Microfinance
Foundation (BBVAMF) distinguished by the United
Nations operates in several Latin American countries
to bring Responsible Productive Finance to vulnerable
individuals by offering them a model of personalized
service and advising them throughout the whole
process. 83% of its customers are poor or vulnerable,
and 61% are women.
Since its creation in 2007, the BBVAMF has granted
loans worth over 7.2 billion dollars to almost 5
million entrepreneurs. 32.5% of the entrepreneurs
supported by the BBVAMF escape poverty two years
after joining, and after three years their sales increase
by 57%.

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ONGD
This situation is being tackled by the Fundacin frica
Directo (Africa Direct Foundation a NGO for
development) with its PrestAD project, which allows
people from Spain to help directly finance projects by
African women.

SEE VIDEO

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AFI
Another highlight is BBVA's agreement with the
Alliance for Financial Inclusion (AFI) to promote
projects to help SMEs and low-income individuals gain
access to banking services. The result of this
agreement is the Open Talent financial inclusion
award, which last year went to the Chilean startup
Destacame.cl.
The startup enables people on low incomes to gain
access to credit. All they have to do is register free of
charge and using a simple procedure and provide
information on what they spend on water, light, gas
and telephone services. Once this registered, the
Destacame.cl platform checks this data to decide
whether the user is a responsible payer and a good
candidate for receiving a microcredit.
The World Bank also notes that women are 20% less
likely than men to have a bank account and 17 % less
likely to have received a loan from a formal financial
institution.

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09
Striving for digital
transformation
The number of customers who communicate with
banks via digital channels goes up every day.
Digital transformation is the goal and main
challenge faced by large companies; it affects all
enterprise areas.

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Digital transformation plays a key role in

corporate survival. According to Accenture
Strategy, the digital economy will represent 24% of
GDP by 2020. And organizations are accelerating
their transformation process so that they are not
left behind.
Through its alliance with Red Hat (provider of
corporate solutions), BBVA is able to expedite its
innovation, manage the increase in financial
operations based on mobile devices and offer
digital banking services to its customers across the
world.

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BBVA invests in technology with the aim of

becoming a more flexible, scalable and customerfocused bank in a cloud environment, with
maximum service automation.
The hotel chain Meli Hotels is another example of
an enterprise with a clear path toward digital
transformation. The company from Mallorca won
the award for Best Digital Transformation
Enterprise at the Digital Enterprise Show
(DES2016). The award was given in recognition of
its shift from the traditional model to the digital
business.

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Technology companies come

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Biometric systems voice, face

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The advance of bitcoin and

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