BBVA says EU bonus cap hampers tech talent acquisition

BBVA says EU bonus cap hampers tech talent acquisition

Spain's BBVA has written to European commissioners to complain that the new EU bankers' bonus cap is hampering its efforts to hire top technology talent and acquire fintech startups.

Under the EU CRD 4 legislation, bank staffers who are considered material risk takers or earn more than EUR500,000 a year have their bonuses limited to 100% of their fixed pay, although this can be lifted to 200% with shareholder approval.

The rule was intended to stop incentivize excessive risk taking among staff such as bond traders but BBVA says that techies in areas like data analytics are getting caught in the crossfire.

According to the Financial Times, the bank has written to two European commissioners to voice its concerns and ask for a "tighter definition of risk-takers" so that technology experts and entrepreneurs are not treated the same way as FX traders.

Juan López Carretero, head, digital M&A, told the FT: "In some cases we compete against US banks or tech companies on acquisitions. Their bonuses are not capped, so we may lose out. If you can design an app so a payment is done in two clicks instead of eight clicks that is valuable but it isn’t putting the bank at risk."

BBVA has been at the forefront of banking's digital gold rush, with chairman Francisco Gonzalez predicting that in the future the company will be a software firm and that few players will be able to survive the ongoing challenge from non-bank competitors such as Google and Facebook and fintech startups.

From its San Francisco outpost, the bank is looking to bring all of its digital talent together under one roof, opening new offices in the city’s Embarcadero Center office complex. BBVA’s New Digital Business unit will be located there, along with its Digital Sales and Marketing teams and Spring Studio, a user-experience firm it acquired last year. The teams are all expected to play outsize roles in supporting BBVA’s goal of transforming itself through technology.

Teppo Paavola, BBVA chief development officer and general manager for New Digital Business, says: “We’re continuing to build our future here, and this puts us at the center of many overlapping circles — fintech, investors, tech talent — that we’re going to be drawing from as we power ahead.”

When fully staffed, the Embarcadero offices are expected to house more than 200 BBVA employees.

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