Traditional banking invests more than ever in technology, but the competition to offer financial services is increasingly fierce with calls fintech and the threat that big platforms like Google, Amazon, Facebook or Apple take a portion of that market. A third rival has emerged strongly in recent years: cryptocurrencies and their promise of decentralized finance without intermediaries. Neither banks nor supervisors. The president of the European Banking Authority (EBA), José Manuel Campa, has admitted that his irruption cannot be ignored: “they come from an innovation, and innovations once they appear you cannot pretend that they do not exist”, he said this Wednesday at the 17th Meeting of the Banking Sector organized by IESE and EY. In said forum he made a curious comparison about the use that could be given to technology blockchain: “drugs It has two meanings in English: drugs and medicine. The underlying product is the same, a chemical. The difference is how it is used.”
Campa has warned that its positive uses contrast with market prices that are not clearly justified, a volume that does not stop growing and greater adoption by small investors. “The EBA has been warning about the use of cryptocurrencies for seven years. The focus had been the banks because we believe that they are assets that they should not buy or recommend to their clients because they have characteristics that are difficult to understand”. Campa welcomes the fact that banks have limited exposure, but warns that the same has not happened with retailers. “The goal is not to kill innovation, but to use it properly,” he said. It does detect that Europe is going faster in its attempt to regulate them – it hopes that by the end of the year it will be achieved and that it will be defined if they should be considered means of payment or investment -. “A lot of those instruments fall into the middle ground of no regulation,” he explained.
Subsequently, some of the main names in the Spanish universe of cryptocurrencies drew a panorama of profound change. The CEO and co-founder of Bit2me, Leif Ferreira, a Spanish platform for buying and selling digital currencies, predicted a boom for this type of asset. “In this decade, directly or indirectly, the whole world is going to be involved with the technology that underlies bitcoin.” Jesús Pérez, from Crypto Plaza, believes that this technology will make the payment of commissions unnecessary. “We’re going to go to a world with financial services that are going to be worth zero, and that’s going to change a lot of things,” he predicted.
The CEO of BBVA, Onur Genç, admitted that blockchain technology can replace the bank in some fields, but stressed that the bank’s 164-year history and the fact that they are a well-known brand play in its favor. Genç pointed out that the blockchain it is still a nascent technology, but the entity he manages is already seeing its possible advantages for his business. “We are experimenting with blockchain, we are getting into that world.”
“We are missing a critical opportunity with European funds”
He knows in depth all the sides of the coin.
Spanish banking executives paraded throughout the day through the IESE auditorium. The CEO of Banco Sabadell, César González-Bueno, was especially concerned about the management of the 140,000 million euros that Spain should receive from Brussels. “We are missing a critical opportunity with European funds. They are not reaching SMEs or the business fabric”, he lamented. “It would be important that we don’t miss the opportunity. May Spain not fail. Do not use these funds for public investment or current spending, but for modernization”, he insisted.
More optimistic in this regard was Gonzalo Gortázar, CEO of CaixaBank. “It is more important that the aid arrives well than that it arrives quickly; that they are applied well and that we do not waste them. We are on time, but we have to make an important effort”.
José Antonio Álvarez, CEO of Banco Santander, stressed the need for Europe to move towards a banking and capital market union. “The issue is how we are going to be able to develop a correct single market for these services that allows us to be as efficient as possible to be able to compete on equal terms with other jurisdictions in the world, especially the Chinese and American ones,” he pointed out.
José Manuel Campa, from the AEB, admits that this is a pending issue, but that now may be a bad time because the Russian invasion of Ukraine has diverted priorities towards issues such as defence, immigration and energy. On the positive side, he said that banks’ exposure to Russia and Ukraine is low, although the geopolitical crisis may hit them in another way. “The context has increased macroeconomic uncertainty. The banking sector is linked to macro developments and that is more decisive than the direct impact of conflict zones”. Manuel Menéndez, CEO of Unicaja, defended that his entity is prepared for the worst scenarios. “We have high coverage levels in the face of a deteriorating economic situation and a low risk profile.”
On the situation of the banking sector, Francisco Botas, CEO of Abanca, stressed that there are no signs that loan defaults have increased. “We are not seeing signs of credit in difficulty neither in the moratoriums nor in the ICOs.”