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Carlos Torres Vila, CEO of Spanish banking giant BBVA, shared his insights on fintech's impact on business strategies at incumbent banks, including BBVA, at a conference on Thursday.

Vila outlined several key ways that the rise of tech-savvy rivals has caused incumbents to adapt:

A greater focus on technology. Vila said technology's ubiquity has changed customer habits, generating demand for easy-to-use, cheaper banking products. This, he said, has caused incumbents to do things like shift more to mobile to avoid being disintermediated. Vila added that more banks are leveraging new technologies to make their back-end operations more efficient and competitive with insurgents' nimbler structures — this is likely partly why BBVA acquired cloud-computing firm Madiva in 2014.

Collaborativeness. Vila said that to successfully leverage new entrants' technology, it's necessary to understand how they work and to collaborate closely with them. He noted that BBVA has already invested in US-based digital-only bank Simple, as well as Atom in the UK. Back in April, Vila told BI Intelligence that it is difficult for big banks to build new products because they are engaged in a wider range of activities that consume resources, and that partnering with fintechs to let them manage hi-tech new product creation is a good alternative.

Improving customer experience. Successful incumbents will be those that can combine consumers' desire for do-it-yourself finance tools with personalized customer support, Vila said, providing both technological change and the in-person service incumbents specialize in. He said that BBVA is now building its strategy around reinforcing consumer trust by using artificial intelligence (AI) and data analytics to personalize products that can boost customer satisfaction and loyalty. In November, BBVA launched mobile account opening with 24/7 customer support from human employees.

Ensuring cultural change. The biggest challenge for incumbents in adapting to a more technological age, Vila noted, is changing management structures and mindsets. He said too many banks have "siloed" departments that don't communicate effectively, and many legacy players are wary of change. One way to address this challenge is for incumbents to adopt the modular management culture of many fintechs. This could help them attract more tech-savvy developers and stay relevant.

Although attracting tech talent is a challenge for incumbents, the bigger problem comes after the talent is onboarded. This is because young tech developers find the staid nature of most incumbents' business environments jarring. In November, HSBC admitted it had to move its digital team out of its headquarters in corporate Canary Wharf to a separate building in London's trendy Southwark due to incompatible work ethics.

For many incumbents, upgrading legacy infrastructure might seem like the most pressing priority, but combating culture clash is arguably a more fundamental problem. Banks should address this issue by getting new innovation units and their core business working closely together, rather than segregating them.

Fintech regulations in the U.S. have been extremely restrictive thus far, but those in Europe have proven successful and allowed the region to become a hub of financial technology innovation. The U.S. would be wise to examine the policies in place across the pond and consider how to implement similar ones within its own borders.

The fintech industry is booming, with VC-backed fintech investment growing 106% to reach £10 billion ($13.8 billion) in 2015. But the new business models fintechs are bringing to market also need to be regulated, and the old models aren't sufficient. The approach regulators take will have a significant impact on how big fintech gets and how fast it gets there.

Sarah Kocianski, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on fintech regulation that explains how regulators in Europe are successfully growing fintech innovation and how it's becoming a model for regulators around the world.

Here are some of the key takeaways from the report:

The financial technology sector is booming, and Europe is a leading region for growth. VC-backed fintech companies in Europe raised £1 billion ($1.5 billion) in funding across 125 deals in 2015.

With this boom in funding comes a need to regulate the nascent industry. There are a variety of approaches — active, passive, and restrictive — that regulators can take. The EU and the UK, in particular, have taken an active approach, in order to encourage growth.

The regulation that will have the most impact on the European fintech market is the Second Directive on Payments Services, known as PSD2. It will force banks to open up their systems to fintechs. This will allow fintechs to act as intermediaries between banks and their customers.

The UK regulator is actively promoting its approach to regulation as a model for other countries to follow. Some of its innovations are already being copied by other regulators around the world.

In full, the report:

Examines the different approaches to fintech that regulators can take

Explains the key EU laws that will affect the European financial services industry in the next two years and beyond

Explores the potential impact of new regulations

Details the workings of the initiative central to the UK regulator's approach to fintech

Highlights what can be achieved when regulators, governments, and fintech companies work together

To get your copy of this invaluable guide, choose one of these options:

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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of fintech regulation.