Disruptive Innovation in the Banking Industry: A Case Study of BBVA

This report discusses the concept of disruptive innovation in the banking industry and its impact on incumbents. It focuses on a case study of BBVA, a Spanish multinational organization providing financial services. The report analyzes BBVA from a 3C perspective (customer, competitors, and corporation) and identifies the problems it needs to solve. It also explores the potential for BBVA to gain a competitive advantage through digital transformation and provides recommendations for preparing for digital disruption.

Disruptive Innovation
At- BBVA

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Critically discuss digital transformation in the banking industry and the ensuing risks for
the incumbents............................................................................................................................1
2. Analyse BBVA from 3C perspective and identify the problem BBVA has to solve.............1
3. Can BBVA gain competitive advantage as a result of digital transformation?......................2
4. Recommendation for BBVA to prepare for digital disruption................................................2
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Disruptive innovation involves generation of new market and new values through which
changes are created in the market. Disruptive innovation do not involves something new but with
slight change it made goods and services more accessible (Dedehayir, Nokelainen and Mäkinen,
2014). In this project Banco Bilbao Vizcaya Argentaria (BBVA) is considered which is a
Spanish multinational organisation providing financial services. It was founded in the year 1857
in Spain. The report consists information regarding disruptive innovation for BBVA.
MAIN BODY
1. Critically discuss digital transformation in the banking industry and the ensuing risks for the
incumbents
Digital transformation is the process through which new and fast methods which for
accomplishing number of activities are made using different types of digital technologies.
Transformation in the digital area has made a grate impact on different types of businesses. One
of the biggest example of digital transformation is cloud computing. As it minimises reliance on
any form of storage system for information. Digital transformation in the banking industry leads
to generate change in the fundamentals of operating system of financial institutions
(Kumaraswamy, Garud and Ansari, 2018). This transformation leads to reduction in operating
cost of business and made every service hassle-free. As economy is growing and developing at
large scale this enhances involvement and importance of different banks. This digital
transformation is an asset for banking sector as huge number of benefits are available with them.
Quick adaptation of technological changes enhances trust worthiness of online system,
access to new consumers become cheaper for banks. This digital transformation in biggest
financial system of the economy has generated number of risk. Data security risk is one of the
most threatening among all as it is a means for generation of other risks. Availability of
information regarding bank accounts and their password are available on online system and this
generates risk for financial risk to a grate extent. Banks are using this transformation for finding
new opportunities and risking each person involved through online banking system.
2. Analyse BBVA from 3C perspective and identify the problem BBVA has to solve
3C analysis business model was introduced by Kenichi Ohman, a management
consultant. This model focuses on analysing 3C's which are the customer, the competitors and
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the corporation. These three elements of business is analysed so that key success factors of
business can be evaluated for viable marketing strategy.
Customer analysis of BBVA organisation helps to make a complete research for
consumers and identify best way to serve target market (Nagy, Schuessler and Dubinsky, 2016).
This analysis of BBVA organisation provides information regarding shifting needs of consumers.
Consumers in present time demanding for grater value added service which are based on new
needs. Technology is contributing to meet such requirements. Competitors analysis is made so
that level of competition in the market is accessed. This also helps in accessing types of
competition available in the market. Actions to deal with competition and to minimise such
competition is made. At the last corporation analysis is performed which helps in analysing
strengths and scope of improvement available with business. Marketing strategies which are
applied and their success rate is evaluated to find variance.
By making consumers analysing form BBVA perspective level of satisfaction of
consumers is analysed and a problem is recorded that consumers keeps on demanding changes in
the digital technology to become advanced among all. Competition analysis of BBVA provides
that there is huge amount of competition available in the industry and together with this threat of
new competition is constant. Corporation analysis helps in accessing number of strengths such as
Disruptive innovation which can be used as a tool for grabbing different market opportunities.
3. Can BBVA gain competitive advantage as a result of digital transformation?
BBVA is named as one of the best digital service provider in the world. Using digital
transformation scheme BBVA organisation has introduced 11:FS which is world-beating mobile
app the bank has produced (Reinhardt and Gurtner, 2015). Focus of this application is made on
speed of delivery of products and services. This organisation was the first in 2018 to offer both
retail and business consumers ability to view accounts from multiple providers using this
application. This digital transformation turned out as a biggest achievement for organisation as
disruptive innovation has been introduced to the public at large. Usage of digital technology
made organisation services more suitable and acceptable by public at large and results in gaining
competitive advantage among all.
4. Recommendation for BBVA to prepare for digital disruption
Digital disruption is a transformation that is caused by emerging digital technologies and
business models. Innovative new technologies and models of business have a impact on the
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value of existing products and services offered in the industry. In order to be prepared for digital
disruption BBVA organisation is provided with following recommendations-
 Develop a network of collaborators: As a digital leader BBVA organisation must
develop a network of collaborators so that at the time of high competition collaboration
can be made for competing effectively (Stimson, Thom and Uhl, 2014).
 Data analysis must be done by BBVA organisation in accurate manner so that decisions
must be taken on relevant basis.
 Development of digital technology is done which is future-proofed so that changes in
future can be made in most efficient manner.
CONCLUSION
From the above project report it has been concluded that disruptive innovation through
digital technology is one of the most effective tool for gaining competitive advantage in the
industry. Usage of digital technology is increasing in banking system and lots of risk is involved.
This risk is managed and controlled with new technological ideas. Analysis of various problem
for BBVA organisation through this innovation needs to be find and appropriate solutions must
be provided for positive results.
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REFERENCES
Books and Journals
Dedehayir, O., Nokelainen, T. and Mäkinen, S. J., 2014. Disruptive innovations in complex
product systems industries: A case study. Journal of Engineering and Technology
Management. 33. pp.174-192.
Kumaraswamy, A., Garud, R. and Ansari, S., 2018. Perspectives on disruptive innovations.
Journal of Management Studies. 55(7). pp.1025-1042.
Nagy, D., Schuessler, J. and Dubinsky, A., 2016. Defining and identifying disruptive
innovations. Industrial Marketing Management. 57. pp.119-126.
Reinhardt, R. and Gurtner, S., 2015. Differences between early adopters of disruptive and
sustaining innovations. Journal of Business Research. 68(1). pp.137-145.
Stimson, G. V., Thom, B. and Uhl, A., 2014. Disruptive innovations: the rise of the e-cigarette.
International Journal of Drug Policy. 25(4). pp.653-655.
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