BBVA AvalBox aims to extend digital transformation to company guarantees

BBVA has become the first Spanish bank to digitize company guarantees thanks to its new digital tool ‘BBVA AvalBox’, which allows businesses to request, present and consult guarantees online.

A bank guarantee is a form of collateral whereby a bank (guarantor), undertakes to meet the fulfillment of a customer’s obligation (guaranteed party), before a third party (beneficiary), in the failure of the customer to do so. Typically, guarantees are contractual obligations entered into with the beneficiary and involve covering the payment of a set amount of money, be it of a trade or loan nature.

Until now, this entailed a long process requiring agreeing a model checked by the legal services of the bank, the drawing up of the documentation on the part of administrative departments, a handwritten signature, physical collection of the documentation by the guaranteed party and its delivery to the beneficiary.

‘BBVA AvalBox’ aims to simplify this whole process.

“BBVA wants to extend the advantages of Digital Transformation to the business world and BBVA AvalBox forms part of this process. It allows clients to perform a task that up until now was time-consuming quickly, easily and simply, thereby making more efficient use of resources”, explains Óscar Vélez de Mendizábal, the head of Transformation for corporate clients at BBVA Spain.

Thanks to the new solution, the digital guarantee can be requested, presented and consulted quickly with the maximum security. The Spanish Royal Mint (La Fábrica Nacional de Moneda y Timbre) acts as a trusted third party and informs the concerned parties of the issue of the guarantee, is responsible for the custody of the document and offers a verification service. The tool also allows the operation to carried out as it currently is on paper. To present a guarantee in this way, all that is required is to request it from BBVA AvalBox and pick it up at a branch office.

The guarantee can also be presented in telematic format at the electronic headquarters of the General Deposit Fund (Public Treasury), with which BBVA has reached an agreement. Likewise, the process can carried out from a website or mobile both by the company as well as the beneficiary whether public or private sector.

BBVA estimates that over 10,000 corporate clients can benefit from this new tool.

In order to manage guarantees online, clients need only be registered with BBVA Net cash and the guarantees module to avail themselves of a line of guarantee and have an endorsement line with an available limit.

The launch happens as BBVA has registered a sharp increase in sales through digital channels. The bank sold over 10 million units through digital channels in the first six months of 2018, marking a nearly twofold rise from the equivalent period in 2017. Sales via digital channels accounted for 38.6% of total sales in the six months through June, compared to a share of 22.4% a year earlier and 14.6% two years ago.

BBVA notes that the growth was not restricted to a certain region and that rather it has taken place in all of the geographical areas in which the Group is active. In Spain, for instance, 42.4% of the units sold in the January-June period were through digital channels compared to 24.9% a year earlier. In Mexico the figure was 32.7%, up from 15.5% a year earlier. In Turkey, the numbers are 40.6% versus 32.1%, whereas in the United States the numbers are 21.7%, up from 17.9%.