The pandemic has forced companies to unite digitally. Banks were not far behind. Digital banking use in Spain has increased by 30% since the pandemic, currently stands at 70%, according to the Funcas and KPMG study “Digitalization as the axis of banking transformation 2023”. Some Spanish banks have already taken the lead in digitalization and this can be seen in the data. Thus, BBVA wins over Banco Santander because 76% of its customers already buy products digitally.

Overall, the level of digital contracts for financial products in 2022 in large Spanish banks was 50%, and in some of the most digital banks this figure even exceeded 70%. This figure is expected to reach an average of 75% over the next 5 years. this means that 3 out of every 4 transactions will be digital. However, due to the nature of the Spanish population, omnichannel remains a competitive advantage in the sector.

When BBVAIn 2022, Spain’s most digital bank, 76% of customers ordered products digitally, up 7 percentage points from the previous year’s 69%. That is, over the year the number of customers using the digital channel to purchase digital goods increased by 10%. If we look at Banco Santander, growth was higher, 21%. Thus, in 2022, 52% of customers purchased a product digitally, compared to 43% a year earlier.

However, this is in KutxaBank, where the volume of contracts for digital products has grown the most. In 2022, 43% of customers did so at some point, up 27% from the previous year when only 34% did so. At Ibercaja, 41% of customers did so, up 11% from 36% in 2022.

The greater investment potential of large Spanish banks has been materialized by achieving digital capabilities superior to other institutions. Santiago Carbo, Director of Finance and Digitalization at Funcas, reflects the importance of the competitive advantages gained by the main financial institutions through digitalization and the heterogeneity of the panorama. “The main thing is to understand that the level of digitalization of Spanish banking is not uniform.. The largest financial institutions have already practically integrated the digital channel into most of their services,” he notes. However, in the mid-market, “digital channel integration, while making significant progress, in some cases may require additional efforts in the near future,” he adds.

While traditional banking continues to digitize, 100% digital banking institutions (also known as neobanks) They reached a market share of 30%., with growth of over 60% in just 3 years. This increase is due to providing customers with superior levels of digitalization and user experience. Maintaining and growing market share of these companies will depend on the ability of these new companies to generate profits and offer a complete portfolio of financial services to their customers.

Regarding the situation of neobanks, Santiago Carbo states that despite the recent growth of their share, “It’s amazing that a major neobank operator hasn’t emerged. “It really makes a significant quantitative difference.” According to Carbaugh, the emergence of this type of competitor will be “what will allow us to see with greater clarity what the future of banking will be like and will force current competitors to accelerate their transformation.”

The digitalization of the banking sector is largely possible thanks to the digital transformation that Spanish society is developing, as evidenced by its seventh position in the EU’s Digital Economy and Society Index (DESI). Since the pandemic, digital banking use has grown by 30% and now reaches 70% of the population, higher than the European average (60%) and second only to the Nordic countries (92%).

In the next five years, the sector hopes to reach a figure close to 85%, i.e. add approximately six million additional customers to digital banking. Coverage of a larger percentage will be determined by the demographic characteristics of the Spanish population. But as Luis Javier Blas, Caixabank’s chief operating officer and media director, warns, this will happen through “inclusive digitalization, that is, tailored to those segments of older clients who require better digital advice from their enterprise in order to improve their digitalization”. “.

The percentage of digital payment transactions has doubled in three years. Despite this, cash continues to be the dominant means of payment, accounting for 65% of total transactions, but e-wallets or digital wallets are already reaching 30% of e-commerce transactions. According to Angel Nigorra, CEO of Bizum, “the pandemic’s momentum has also had the spillover effect of accelerating the use of all types of digital channels, including payments, resulting in a significant shift in the use of cash.” . It is expected that cash will remain the main means of payment.due to our country’s distinctive cultural roots, but its leadership is deteriorating due to the rise of the rest of the media.

The report concludes that digitalization has become a key element for successful competition in this sector. The Spanish financial sector has made significant progress in its digital transformation. however, there are still challenges to be faced, such as heterogeneity in digital adoption, service personalization, cybersecurity, risk management and regulatory compliance.

The authors of the report claim that cooperation between various sector players, including BigTech and FinTech, “There is a need to drive innovation at the business level and improve the customer experience.” To sum up, “digitalization is not only a necessity to adapt to an increasingly interconnected world, but also an opportunity to improve the efficiency, security and personalization of the financial services offered to customers,” they conclude.