BBVA Compass economists: Sharing economy is transforming industries, consumer behaviors

- Peer-to-peer communication technology underlies current success of sharing economy

- Transportation and accommodation first to face disruption, few industries will be untouched

Nov 23, 2015, 15:51 ET from BBVA Compass

HOUSTON, Nov. 23, 2015 /PRNewswire/ -- A confluence of technologies has allowed the sharing economy to grow rapidly in many industries, including the banking sector, and is changing consumer behavior in a way that will have far-reaching consequences, BBVA Compass economists say in a new report.

"The basics of the sharing economy have always existed, as owners of underutilized assets such as a car or an empty guest room searched via bulletin boards or newsletters for those who desired the temporary use of such assets," the economists write. "What has changed is the emergence of mobile software platforms that allow these two parties to easily come together whenever and wherever they wish."

The two highest-profile companies in the movement, Uber and Airbnb, represent the most developed areas of the sharing economy: ride and accommodation sharing. Specialized software has allowed these companies to scale up, gain recognition, and generate strong network effects without having to invest in costly underlying assets, such as cars or buildings. Uber currently accounts for 55 percent of the paid-car-ride market for business travelers in the U.S., write economists Anthony Quinones and Amanda Augustine. Similarly, Airbnb is expected to have more than 80 million bookings by year-end, more than double the year before.

Moreover, these companies focus on the unique experience of the transaction versus solely focusing on the price. Their principles when it comes to the design of the transactional experience emphasize flexibility, ease of use, and transparency, the BBVA Compass economists say.

According to Quinones and Augustine, few industries will remain untouched by the sharing economy. Its effects can already be seen in the banking industry, as "there are already banks that have underwritten auto loans and leases for those who wish to drive for Uber based on the borrower's additional stream of income."

The sharing economy could also pose a risk to banks' core business, with peer-to-peer lending getting intense interest from investors. "By directly connecting borrowers with savers, peer-to-peer lending disrupts the banking industry's main business of transforming an unused asset — savings — into loans by using technology and online data to make quick credit decisions," the economists write.

The economists also say banks have several opportunities to participate in the sharing economy. One way would involve transforming the way banks utilize branches.

"Banks could share their space with those who may need room for meetings, collaborations or just a place to work," the economists write. "Much in the same way coffee chains such as Starbucks have become more than just a place to grab a coffee and go, bank branches could become areas of collaboration. Banks could even create spaces that help nurture startups and small businesses, almost like an incubator."

This in turn will help banks create an atmosphere that is personalized, community-focused, and more in line with consumers' preferences, rather than merely a place to transact.

The flexibility, transparency, individualization and ease of use that characterize the sharing economy should guide banks as they engage with millennials, Quinones and Augustine conclude.

For more from the report, click here.

Led by BBVA Compass Chief Economist Nathaniel Karp, the bank's research team analyzes the U.S. economy and Federal Reserve monetary policy. For its analyses, the economists create models and forecasts for growth, inflation, monetary policy and industries. The economic research team also follows a variety of issues that affect the Sunbelt states where BBVA Compass operates. Follow their work on Twitter @BBVAResearchUSA and @BBVACompassNews and on Podbean.

About BBVA Group

BBVA Compass is a subsidiary of BBVA Compass Bancshares Inc., a wholly owned subsidiary of BBVA (NYSE: BBVA) (MAD: BBVA). BBVA is a customer-centric global financial services group founded in 1857. The Group has a solid position in Spain, is the largest financial institution in Mexico and has leading franchises in South America and the Sunbelt region of the United States. Its diversified business is geared toward high-growth markets and relies on technology as a key sustainable competitive advantage. Corporate responsibility is at the core of its business model. BBVA fosters financial education and inclusion, and supports scientific research and culture. It operates with the highest integrity, a long-term vision and applies the best practices. The Group is present in the main sustainability indexes. More information about the BBVA Group can be found at

About BBVA Compass

BBVA Compass is a Sunbelt-based financial institution that operates 672 branches, including 341 in Texas, 89 in Alabama, 77 in Arizona, 62 in California, 45 in Florida, 38 in Colorado and 20 in New Mexico, and commercial and private client offices throughout the U.S. BBVA Compass ranks among the top 25 largest U.S. commercial banks based on deposit market share and ranks among the largest banks in Alabama (2nd), Texas (4th) and Arizona (4th). BBVA Compass has been recognized as one of the leading small business lenders by the Small Business Administration, and its mobile app recently earned the Mobile Banking Leader in Functionality Award for the second consecutive year from Javelin Strategy & Research. Additional information about BBVA Compass can be found at, by following @BBVACompassNews on Twitter or visiting

Editor's Note: BBVA Compass is a trade name of Compass Bank.

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