Big tech’s threat to banking is no longer a headline. It is close to consensus. China is the clearest example: Tencent and Ant Financial absorbing huge parts of the payments market, and a new league of competition is in the making.
Some investors are undervaluing banks and paying over the odds for shares in fintech companies that they think will supplant them. Dutch fintech group Adyen is due to float shortly at a price that would give it a valuation of up to €7.1bn. It posted net profits of €24.1m in the first quarter. By contrast, Spanish bank BBVA has a market capitalisation of €40bn and net profits in the first quarter of €1.3bn.
No doubt, the threat is out there. But at BBVA we have been trying to transform ourselves to meet the challenges of the digital age for more than a decade.