BBVA: Digital Identity Will Transform KYC

BBVA’s Carmela Gómez Castelao explored one of the biggest challenges in embedded finance today: making KYC as seamless as the purchase itself. When a customer is buying a new phone or applying for instant financing online, the merchant may know exactly who that customer is — but the bank often does not. Before issuing credit, the bank must confirm identity, validate financial capacity, and ensure the individual truly is who they claim to be. For customers who aren’t already clients of the bank, this process can feel cumbersome and slow.

Typically, KYC today involves uploading documents, taking selfies, recording verification videos, or switching between apps. Gómez argued that this friction disrupts the shopping experience and weakens conversion. But APIs offer a powerful solution: embedding identity verification directly into third-party journeys, allowing customers to authenticate themselves right where the transaction happens. Whether buying a phone, a car, or applying for point-of-sale financing, customers can verify their identity in the same interface — without being redirected to a separate banking environment.

The most exciting development, Gómez said, is the rapid evolution of digital identity frameworks. Soon, individuals will be able to carry a secure, reusable digital ID recognised across platforms and industries. KYC checks will become instant — “like having your national ID digitised and verifying yourself with a login or a biometric gesture.” This removes repetitive friction, strengthens security, and creates a universal identity layer that follows the customer from service to service.

Gómez pointed to global successes, especially India’s UPI, where pairing a payment layer with a trusted national digital identity transformed a cash-heavy economy into a predominantly digital one. Once people can identify themselves easily and securely, they can access formal financial services, make payments seamlessly, and begin developing long-term financial habits such as saving. These behavioural shifts ripple through entire societies, accelerating digital maturity and economic empowerment.

For BBVA, the message is clear: KYC may be difficult today, but technology, regulation, and digital identity standards are converging toward a future where identity becomes instant, invisible, and universally trusted — unlocking smoother journeys and greater financial inclusion worldwide.