Eyeing India with ‘simple and transparent products'

Madrid headquartered financial services group BBVA (Banco Bilbao Vizcaya Argentaria) had acquired a 51 per cent stake in Bank of Baroda's credit cards subsidiary BoB Cards in December for €34 million (about Rs 208 crore). The two partners are working on a plan to segment the Indian market so that customers get the credit card product they need and not what the card company wants to sell, according to the Spanish bank's Chief Representative in India, Mr Joiel Akilan.

In an interview with The Business Line , Mr Akilan outlines the way forward for the joint venture.

What was attractive about BoB Cards that BBVA chose to acquire a stake

BBVA believes in growing in new markets with long-term partnerships, as we have done in China with China Citic Bank. We found a solid partner in Bank of Baroda for our foray into the credit cards business in India. It is one of the largest banks in India, very progressive and has a clear leadership with good management. This makes it more attractive for us to partner with them. Credit cards form an important business for BBVA. Hence, the strategic fit with BoB Cards was ideal for us to enter this business in India.

How are you going to grow the credit cards business?

BOB Cards presents an opportunity to build the credit cards business. Bank of Baroda's 36 million customers are a great opportunity for the cards business to leverage upon. We plan to segment the market according to the individual profile.

We will provide customers what they need and not what the card company wants to sell them. Keeping in mind customer preferences, simple and transparent products is what we believe will be the key differentiator for the success of any card operations.

In Latin America, we have used cards as an effective means for ‘bancarisation' (extension of banking facilities) of consumers who did not even have any relationship with banks.

In terms of product design and technology, what support can BoB Cards expect from BBVA?

BBVA brings a wealth of experience, not only from Spain but also from Latin America and the US. Globally, we are handling 50 million cards. We are one of the leading players in consumer finance and cards business in emerging markets which are somewhat similar to India in consumer habits.

We plan to bring a range of card products from the bouquet of credit cards which we are selling in various parts of the world and customise it to Indian consumer needs in order to sell 5 million cards through this joint venture. We will bring sophisticated processes and technological advancements needed to enhance the platforms in the company.

How different is your credit card product going to be from the others?

BBVA has more than 150 years of experience in consumer finance around the world.

We have developed tools and techniques to manage risk. So, we will combine these risk management processes and segmentation techniques with Indian market intelligence.

This will help us to provide the right card to the consumer.

We plan to make things simple by providing simple products and effectively marketing it.

Besides credit cards, what other product segments will you look at?

BBVA can only do credit cards business with this joint venture as this is a standalone credit card company. Of course, within the credit cards space we will have various products catering to various segments of the population.

We could also leverage our global relationships with retailers to start private label or close loop cards.

Will BBVA restrict itself only to credit cards business in the retail segment in India or are there any bigger plans for the future?

At this point of time we are concentrating on this joint venture to make it a success. India is one of the fastest growing economies in the world and it also has a large unbanked population, which presents a great opportunity for institutions to provide financial products to them. BBVA aims to be a significant player in financial services in India.

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