Ana Botin, the recently appointed chair of Santander, recently told the FT that the banking industry’s large branch networks give traditional financial services firms an edge over their deeper-pocketed competitors.
Botin believes that a significant retail presence will give banks the advantage over technology companies such as Apple and Google, which are circling the financial services market seeking to dis-intermediate banks in key areas such as payments. Investing in the branch network, along with a $3 billion global IT investment, is Botin’s bet on the future of banking. In particular, she believes that customers will prefer to make key decisions like choosing mortgages in a retail environment.
Meanwhile, at BBVA, Chairman and CEO Francisco Gonzalez has declared that up to half of the world’s banks will disappear through the cracks opened up by digital disruption of the industry. Gonzalez is betting on digital transformation and moving customers to online and smartphone banking as soon as possible, noting a 104 percent growth rate in mobile banking customers over the past year. Of particular interest in the context of Botin’s bet is that BBVA already sells 15 percent of mortgages online; that is forecast to rise to 40 percent by 2018.
Which bet would you stake the farm on?