Goirigolzarri: “We have received 4.6 times more mortgage applications since we abolished mortgage fees”

• 30% of the total number of applications for mortgage loans received by the bank are from non-customers
• The Bankia chairman drew attention to the fact that mortgages in Spain have the lowest rates in Europe

'Bankia multiplied the number of home loan applications by 4.6 in March, after launching the no-fees mortgage in mid-January.' José Ignacio Goirigolzarri, Bankia's chairman, announced this result in his speech to the XXVIII Elkargi Business Gathering, held this morning in San Sebastián.

The bank's chairman explained that this performance is an example of the success the bank is having with its SIN comisiones ('No fees') strategy, which already applies to individuals and self-employed professionals with direct deposit of income, digital customers and, more recently, mortgage customers.

As another example of this successful performance Goirigolzarri cited the fact that '30% of the total number of mortgage applications received by the bank come from non-customers'.

As a result of the growth in mortgage applications, the volume financed in March was 2.1 times greater than in March of the previous year, while the number of loans granted was up 1.8 times year-on-year.

Thus, in the first quarter Bankia increased mortgage lending to Spanish households by 87% to a total of 326 million euros.

The Bankia chairman drew attention to the fact that mortgages in Spain have the lowest rates in Europe. In 2016 a Spanish household with an average mortgage saved 1,125 euros compared to a German household. Over a period of eight years, the saving would amount to 8,341 euros, which is more than 7% of the total amount of an average mortgage.

Spanish SMEs also benefit from the lowest funding costs in Europe, after adjusting for risk premiums. Goirigolzarri pointed out that SMEs in Spain are financed at the same rates as their counterparts in Germany, even though the risk premium in Spain is 130 basis points higher.

This means that the Spanish financial system compares very favourably in terms of service quality with those of the other European countries.

Digital transformation

During his talk at the business gathering, Goirigolzarri also addressed the challenge of the digital transformation facing the banking industry. 'This challenge is often seen as a threat, but in my view technology is a great opportunity: it is the lever that will transform the industry,' he said.

Technology, he said, will affect the banking business model in various ways. First of all, it will affect costs, with increasingly rapid digitisation of banking processes. 'That is a key point,' he said.

The second vector of the banking business model that is affected by technology is the customer relationship.

The Bankia chairman cited various figures to show that banks' relationship with their customers is already a multichannel relationship. 'More than 90% of Bankia's transactional operations take place outside the branches,' either at ATMs or online. Goirigolzarri also noted that '30% of all the bank's transactions are already carried out by customers via mobile phone'.

And yet, however virtual the relationship may have become, 'if there is anything that has emerged clearly from all the studies on banking consumer behaviour it is that customers' satisfaction increases if they have a person to talk to in the bank, through whatever channel; someone who can also be proactive in offering advice.'

The bank has recently announced that it aims to practically double the number of customers who are served by a personal account manager, so as to reach 3.3 million by 2019. Of these, one million will be served by remote account managers.

In this digitisation process, 'banks must invest massively in getting to know their customers, because that is the only way the advice they offer can meet customers' expectations and thus be valuable to them,' Goirigolzarri said.

For Bankia's chairman, the banks that succeed in this digitisation process will be 'the ones that respond appropriately to the challenge of adapting to customers' growing demands for multichannel service and, also, the ones whose teams are most motivated, committed and close to customers'.

'Digitisation and our team of people are the levers that will help us maintain our leadership in efficiency, which is essential for the Bankia project to continue to be a success,' Goirigolzarri concluded.