What Lies Behind Successful Digital Transformations?

April 13, 2021

Digital transformation – using technology to improve internal processes and enhance how businesses deliver value to their customers – is becoming an essential process for companies to survive in the competitive information age. To understand what separates success from failure, we look at a firm that has undergone a renowned and successful digital transformation programme.

With the pandemic having sped up the digital transformation process worldwide by three to four years[1], it is no surprise that Hong Kong companies are increasing their technology budgets[2] . Market analysis reveals that the top-performing digitized businesses earned up to 80% of all digital revenues in their respective industries[3] – an excellent example of the “winner takes all” dynamic that is a feature of the new economy[4]. The ability to quickly and successfully change to exploit this dynamic has become vital.

Learning from a winner

As a case study, we will highlight a company that has delivered a successful digital transformation project. Spanish multinational banking giant BBVA has gone from being a traditional lender to one that has embraced digitalization at all levels of the organization. According to the company, this is what has been achieved[5]:

  • More than doubled its digital customer base from 15.3 million in 2015 to 32.1 million by 2020
  • Holds the top Net Promoter Score in six of its operating countries while placed second in two others
  • The first bank in Spain to offer digital enrolment to potential customers – which it could easily roll out to other markets thanks to effective internal processes
  • 94% of retail products and services are now available as do-it-yourself transactions

BBVA’s efforts have rightly won the group various innovation in technology awards. By studying its success, we can identify four key factors that can also be broadly applied elsewhere.

#1: Commitment from the top leadership

Companies that have a management team that is entirely focused on achieving an efficient transformation tend to be the ones that see the process through to its successful completion.

Much of BBVA’s digital evolution was guided by the vision of its then-CEO and Chairman, Francisco Gonzalez. In 2015, he famously announced that “BBVA will be a software company in the future”. Amid all the potential challenges, he could clearly see the opportunities, noting that “banks must urgently undertake a far-reaching technological and cultural transformation. The industry is swiftly advancing towards a new ecosystem”[6].

Such committed and visionary leadership was a critical success factor for BBVA. Although he has since stepped down, this continues to be a guiding principle – with the business stating that data and technology remain a central strategic priority[7].

#2: A willingness to invest heavily

The financial returns from any digital shift can be uncertain, and many companies are understandably hesitant about investing heavily. Yet, there is proof that the best course of action may be to go “all in”[8]. BBVA is a testament to this, with Capgemini observing that the bank has spent billions of euros on building its technology capabilities over the years[9].

The bank has created what it calls its “3,6,9 process” – three days for team creation, six weeks for prototype development, and nine months for it to reach the customer. Because it has built out a global development platform, it only needs to develop products once. It can then reuse them multiple times across different countries.

#3: Focus on being agile

The Covid-19 pandemic has emphasized how important it is for companies to be agile. Even putting the pandemic aside, client requirements can change in an instant. Firms must be swift enough to adapt.

BBVA has shown a good deal of agile thinking by creating a “Single Development Agenda”, which it refers to as one of the key drivers of a deft transformation. As reported by the bank, the plan ensures it only commits to projects that are both in line with its strategy and can be executed with its current capacity[10]. Underlining its commitment to this approach, BBVA disclosed that it had replaced all static departmental budgets with the agenda[11].

BBVA has also developed “digital factories” – dedicated groups that focus on high-priority change-focused projects[12]. Such groups could encompass many departments, allowing the bank to overcome the so-called “silo mentality”. This enables it to channel resources toward the highest-priority projects at any given time, ultimately contributing to a more outcome-driven organization.

#4: Strengthening regulatory relationships

Companies in tightly regulated industries, such as banking, can help support a digital transformation programme by actively strengthening their regulatory relationships. BBVA itself established a Global Supervisory Relations Unit[13] to coordinate its interactions with the supervisory authorities.

Digital Transformation – an ongoing process

A study by the Hong Kong Productivity Council, titled Research on Digital Transformation in Hong Kong Business Sector, issued a stark warning to companies – go digital or be replaced[14]. Companies must avoid thinking of digital evolution as a “one and done” event. As the case of BBVA shows, it is an ongoing process, meaning a mindset shift from senior management downward is required to make it successful.


[1] https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever

[2] https://www.globaldata.com/despite-covid-19-enterprises-in-hong-kong-set-to-increase-ict-budget-on-digital-transformation-says-globaldata/

[3] https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/digital-transformation-improving-the-odds-of-success

[4] https://news.un.org/en/story/2017/10/567612-winner-takes-all-dynamics-digital-economy-could-widen-income-gap-un-report

[5] https://www.bbva.com/en/bbva-doubles-its-digital-banking-customers-and-triples-its-mobile-banking-customers-in-just-four-years/; https://www.bbva.com/en/bbva-will-offer-digital-customer-enrollment-everywhere-it-operates-by-the-end-of-2019/; https://www.bbva.com/en/bbvas-digital-journey-where-we-are-coming-and-where-were-heading/

[6] https://www.bbvaopenmind.com/en/articles/transforming-an-analog-company-into-a-digital-company-the-case-of-bbva/

[7] https://www.bbva.com/en/results-4q19/

[8] https://www.mckinsey.com/business-functions/transformation/our-insights/the-numbers-behind-successful-transformations

[9] https://www.capgemini.com/consulting-no/wp-content/uploads/sites/36/2017/08/bbva_pov_v6_03-03-16.pdf

[10] https://www.bbva.com/en/single-development-agenda-the-solution-to-aligning-strategy-and-execution/

[11] https://www.bbva.com/en/weve-replaced-static-department-budgets-resource-management-that-is-dynamic-and-global/

[12] https://www.bbva.com/en/agile-at-bbva-a-journey-of-continuous-transformation/

[13] https://accionistaseinversores.bbva.com/microsites/bbvain2015/en/performance-in-2015/primary-stakeholders/regulators/

[14] https://opengovasia.com/hkpc-releases-digital-transformation-study/

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