Digital Transformation in Spanish Banking: Barriers and a Path Forward
Digital transformation has become a top priority for Spain’s banking sector. iAhorro Technologies, a pioneer in end-to-end mortgage digitization for banks in Spain, has highlighted the main obstacles that Spanish banks face when modernizing and digitalizing their mortgage products. The latest report, titled Barreras de la digitalización hipotecaria en el mercado español, points to legacy technology, cultural resistance, and a complex regulatory framework as the central challenges in this transition.
One of the report’s key findings is that “tech legacy” — the inherited technology many banks still run on — constrains the integration of new digital tools such as real-time data analytics and machine learning essential for end-to-end digitalization. These legacy systems have provided stability for decades, yet they now hinder the flexibility and adaptability needed for internal mortgage process digitization.
Additionally, legacy systems are not designed to meet modern customer expectations. Clients today want agile, transparent, and fully online mortgage processes with access from any device or location. In practice, this reduces the competitiveness of Spanish banks. Studies suggest the negative effects of tech legacy can impact up to 40% of companies within the country.
Another major barrier highlighted by the iAhorro Technologies report is cultural resistance within banking institutions. Frequent mergers and acquisitions in the Spanish sector complicate the issue by forcing harmonization across disparate digital platforms and databases, which slows the digitization of mortgage processes even further.
Furthermore, the digital skills gap among bank employees represents a substantial challenge. A study by Digital Banking Report shows that 58% of financial services executives regard a lack of digital skills in their workforce as the greatest risk to innovation. A significant portion of bank staff in Spain is over 45 years old, a demographic less likely to have received training in digital competencies needed to rapidly adapt to new technologies, according to the Randstad Research report on the job market in Banking and Insurance.
Regulatory requirements also pose obstacles to adopting new technologies. The Ley Reguladora de los Contratos de Crédito Inmobiliario and the Reglamento General de Protección de Datos protect users applying for mortgages but can be perceived as hurdles to continuous technological upgrades. The need to continually adapt to changing regulations requires substantial time and resource investments, which can push digital mortgage initiatives to the back burner.
In response to these challenges, outsourcing mortgage digitization emerges as a viable and necessary solution for Spanish banks. iAhorro Technologies’ Mortgage-as-a-Service enables banks to implement 100% digital mortgage processes from customer intake through signing and post-signature, without major internal system or team changes. This approach helps banks overcome internal friction and accelerates the path to fully digital mortgage operations. [Citation: iAhorro Technologies]