18 October 2022
Transaction Banking Conference: Creating value in times of transformation
On September 29, BBVA’s Global Transaction Banking area held its second virtual international conference, which addressed such relevant issues as the initiatives being implemented by companies to achieve their net zero objectives, the new formulas for collaboration between company and client to build a joint solution that meets the client’s needs, and the current economic scenario.
At the start of the conference, Eva Rubio, Head of Global Transaction Banking, highlighted the factors that are currently impacting our activity: high inflation, return to positive interest rates in Europe, geopolitical risks, and regionalization. She also outlined the more persistent trends that are key levers for the transformation of our businesses: the sustainable transformation of all industries and economies and digital transformation and innovation in a transaction-based world.
Clients from more than 10 different countries, high-level BBVA experts and guests from prestigious institutions that are benchmarks in their industries gathered at this second transaction banking conference, which addressed various key issues for this business.
Economic outlook in a VUCA environment
David Cano, CEO at AFI, analyzed the economy under a VUCA (Volatility, Uncertainty, Complexity, Ambiguity) environment.
The VUCA analysis comes amid an environment of high public indebtedness, which poses a challenge when it comes to funding the expenditure needed to meet the challenges ahead.
The global pandemic and the war in Europe have major implications for the world economy by creating bottlenecks and pushing up commodity prices. On top of this, there is rampant inflation, which has prompted central banks to raise interest rates sharply in just nine months.
This situation has fueled fears that the only way to achieve a reduction in inflation is to endure a recession. The challenge now is to make it as short as possible (two quarters) and to cushion the impact (in the order of 0.5%).
More sustainable supply chains to achieve net zero
Marina Andrés, Global Head of Advisory GTB at BBVA, moderated a round table featuring Virginia Ocio, Head of Circular Economy at Endesa, and Juan José Pardo, Head of Corporate Affairs at Nestlé Mexico.
Both Nestlé and Endesa are benchmarks in corporate sustainability. Just over half of Endesa’s emissions, as a power generation company, are estimated to be Scope 1. In contrast, Nestlé’s GHG emissions are almost 90% Scope 3, meaning that they emanate from its supply chain and the end use of its products.
While both companies aim to become carbon neutral, they pursue different sustainable and responsible supply chain strategies because they belong to different sectors.
Virginia and Juan talked about their respective companies’ GHG emissions targets and how they are meeting the challenge. It will certainly be a profound transformation for both companies and the road is long, yet we must reach the winning post and get it done hand in hand with our suppliers.
They went on to explain how Supply Chain Finance programs can help align suppliers with these objectives.
Notably, Endesa has linked its SCF program to Circular Economy objectives, whereby suppliers that meet these requirements earn additional price discounts. Nestlé has also linked its SCF program to sustainability objectives, although it relies on an ESG questionnaire provided by BBVA Mexico to assess its suppliers.
In both cases, the success of using this tool is based on providing an incentive to suppliers to meet sustainability targets and thus make the supply chain more sustainable.
Innovation based on co-creation
Since the adoption of the Agile culture across the entire BBVA Group, at Cash Management CIB we are committed to exploring new ways of engaging with our clients so we are no longer considered just another financial services provider, but rather a key strategic partner for the growth of our clients and their businesses.
We can define co-creation as the process of building experiences of cooperation and dialogue with groups of existing or potential clients. This allows the company to learn more about how its products and services are perceived by the users themselves, while also getting these end users actively involved in shaping the company and its value proposition.
Alexandra Lara, director of the Netflix payments team for Latin America, told us that one of the biggest challenges for Netflix today is reaching those segments where cash is still the main means of payment. To succeed, it is important to partner with banks to include this large component of the population in the electronic payment system, thus ensuring that all clients are able to enjoy the same experience from this streaming giant.
Sustainability and business-client collaboration are key factors behind the growth of companies and are an integral part of the transformation process at BBVA and indeed across most sectors. And at BBVA we want to work toward these aspects alongside all of our clients.