Casimiro Gracia, Executive President, Axis Corporate, moderated a breakfast discussion on the Evolution and Revolution of the Financial Sector – Lessons from the Crisis with José Antonio Álvarez, CEO, Banco Santander.

The event took place at the Westin Palace Hotel in Madrid, with the participation of Mr. Rafael Miranda, president of APD.

José Antonio Álvarez discussed the political landscape in Italy and Spain along with Brexit in the UK as contributing factors to the current market instability. He suggested that the Spanish banking system will see further consolidation and supported the view that new banking entrants are regulated along similar lines as traditional banks.

José Antonio Álvarez outlined five key insights from the financial crisis:

  • There are new priority risks such as reputational threats and liquidity squeezes which were previously seen as secondary risks.
  • The need to act in a counter-cyclical way to avoid herd mentality in the sector.
  • The importance of income and coverage diversification.
  • The new dynamic of placing the customer at the centre of the business model
  • The value of a strong leadership team with robust governance.

Faced with this new paradigm, José Antonio Álvarez described banks’ digital journey as a vital component in their transformation, placing particular emphasis on improving profitability in the financial sector in Europe to be able to compete with other markets such as the US, with new digital players such as FinTechs, and to continue to redefine the customer relationship.

Mr Alvarez highlighted that Santander has placed great emphasis in front office transformation, and is now focusing on developing new back office systems to enable more efficient, secure and valuable management of its data. With a view to minimising the technical debt issue, Banco Santander´s CEO cited emerging technologies such as Blockchain, pointing to their ´attractive and disruptive´ potential, but also urging caution that they still lack the maturity and sharpness to become mass adopted solutions for the Financial Services sector.

In the post-briefing session, moderated by Casimiro Gracia, the CEO of Banco Santander highlighted the cultural transformation required in order for firms to pivot towards a mode transparent and efficient model of communication, both with their clients and their staff.

Casimiro Gracia, Axis Corporate, Executive President, added “This is precisely the type of challenge that Axis helps its clients to address, offering digital and technology consulting services to financial services firms embarking on their own transformation journey.” This point was reinforced also by José Antonio Álvarez in his observation that the development and management of talent through training and attracting staff with new, more digital skillsets, is a critical task for firms.