2017: Latin America, you can be the exception of the global trend.

The end of the year accumulated several duties and the beginning of the year was quite busy and I do apologize to stop writing for a while but now I am ready to catch up the time lost.Let’s start quickly: the end of the year and a new 2017.

The end of 2016 was quite positive for the Fintech ecosystem in Latin America.Here you have some numbers:

  • # of Fintechs in Brazil: 206 according to the Fintechlab
  • #of Fintechs in Mexico: 158 according to Finnovista
  • #of Fintechs in Colombia: 77 according to Finnovista
  • #of Fintechs in Argentina: 60 according to Finnovista
  • #of Fintechs in Chile: 56 according to Finnovista

In 2016, investments in Latin American Fintechs increased (here you have some examples):

  • For Brazil: Nubank (USD 132M), GuiaBolso (USD 20M) and BankFacil (USD 5M)
  • For Mexico: Kueski (USD 10M), Konfio (USD 8M) and Kubo Financiero (USD 7.5M)
  • For Colombia: Alkanza (USD 3M)

Now in 2017, we know that the number of Fintechs in each country have already increased, governments started structured themselves to learn to deal with Fintechs, Fintech associations has been created (Colombia and Argentina) and even the investors organized themselves to follow better the Fintech growth. In January 2017, new investments were done in the region, Ripio (old BitPago) from Argentina received USD 1.9M and Asaas from Brazil got USD 0.8M.

2017 started positively. Trends? Robo Advisors, Blockchain, Regtech…not really I believe more on Insurtech in the region. Big Insurance companies will finally follow the path that Banks started last year and will learn to deal with insurtechs and new technologies related (IoT for example) to reach a population that do not have an insurance culture.

Challenges? A lot! Regulation, higher investments for mature fintechs, scale, more early stage investments …

Banks will finally go beyond observation…will they finally buy one Fintech, two? why not.

International investments should grow because economic situation in most countries of Latin America is improving.

Finally, and my only certitude, Latin America is not the US or Europe. So if the “booming” of the Fintech sector slowed down there, it does not mean that Latin America will follow the same trend. Fintechs are solving issues that big organizations and even some governments did not want to deal locally. On the other hand, customers seem finally ready to use digital solutions. So  initiatives and projects that can finally change a continent should not be stopped and we should work to foster the fintech culture in the region (in English, Spanish or Portuguese). These are my best wishes for 2017!

 

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Source: The Economist 2017

 

 

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Searching innovation… go to the Innovators Summit in Brazil

Some weeks ago, Sao Paulo hosted the Innovators Summit Event gathering international and national speakers. This was the second year that the event took place in Sao Paulo. For one day and a half, attendants immerge in the new trends of innovation within an organization and within several sectors.

Technologies were presented and discussed during the event showing the potential that can be reached if we implement that in Brazil. The different panels were meant to induce attendants to look for innovation thinking outside the box and also learning how to boost innovation when you work in a big company. To sum up there is no more a reverse way, innovation has to be in our companies whatever the size and organizations need to learn how to accept it and seed this new state of mind in all the levels of the hierarchy.

Obviously, if we talk about new trends, panels about fintechs and blockchain have to be presented.

To start, we had the presence of Robert Schwentker from the Blockchain University. It is a university in California that provides blockchain related technical classes and organizes events for developers and the startup community. For beginners, the presentation was a great material to educate the public to the world of bitcoins and blockchain, in few words it is a sort of new internet where all transactions are transparent and we can ensure traceability and therefore safety. Several countries are creating new solutions using this technology and even the World Economic Forum recognized it as a disruptive technology of the future. Xapo and Ewally are South American examples of startup using the blockchain technology. In fact, Robert emphaticized that now we are going to the next level of the technology creating more complex solutions linking blockchain to internet of things or artificial intelligence for example. More organizations have realized the potential of this technology and companies as Citigroup has created its own cryptocurrency and consortiums were created as R3. Blockchain is starting to invade financial products (wallets, investments, merchants, financial data, payroll , insurance…) and big organizations cannot missed it anymore.

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Coinbase also spoke out at the event to depth in the discussion of bitcoins. Coinbase is a digital asset exchange company headquartered in San Francisco, California. It is a global leader in digital currency, and present in 33 countries. There are still some controversies about the real success of bitcoins but its volume and usage are growing globally. Sam Rosemblum, from CoinBase insisted that regulators will be the key drivers to accept the existence and advantages to use a digital currency. He mentioned for example Japan as a model about openness and acceptance of bitcoins and saluted Brazil regulators to start investigating and learning about digital currencies.

coinbase

Finally, there was a conversation with Kay Schmitz from IFC and its investments in Latam and Africa. IFC has performed high level investments in fintechs, by mid-2015, it had invested over $180 million in equity and debt in early- and growth-stage fintech companies around the globe and Latin America is becoming a more attractive place. Kay considers that in the next 5 years (maybe less) the role of banks will definitively change, going beyond credit and deposits…As a specialist of fintechs, he confirms that cooperation of banks and fintechs is crucial and productive to attend client  needs  (from millennials to baby boomers). In Brazil, he sees great potential on fintechs providing loans because the credit penetration is low in the country and has the highest net margins in the world.

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Kay points out Mexico as the second country of fintechs in Latam due to the size of the market and a high need of credit for all the population. Then he mentioned Colombia and Peru, emerging countries which focus on financial inclusion. To conclude, banks are confronting big challenges in the close future because digitalization is imminent but still do have a big number of clients that refuse or are in the transition period to stick to an agency. In addition to that, customers claim convenience and customization so banks have to invest in user experience too. How to find the balance between modernization and old structures? … Unfortunately, there is no a sole answer.

To finalize speakers recognize that Brazil has a special place in the heart of investors, (besides economics figures and political disappointment), it is quite difficult to not like this country. These are encouraging words for every Brazilian startup and a chance to not miss with international investors.

I would like to thank +Innovators and CI&T for the event because they did choose carefully the speakers and it is great to listen new points of view about the fintech environment in Brazil, its positioning worldwide and of course its potential.

Thank You +Innovators and CI&T and we look forward the next year with more innovations (certainly not yet discovered) in the agenda.

 

 

 

Seedstars in Brazil and the winner is…

I would like to write about an international initiative that arrived in Sao Paulo two weeks ago and is travelling around Latin America.

Seedstars organizes the world’s biggest startup competition in emerging markets, visiting 65 countries to find the best national startup that will later go to Switzerland. On April 2017, all the winners will be gathered in Lausanne to share a unique experience and participate to the competition of the global winner.  The last year, the global winner was Giraffe, a South African mobile application that enables businesses to hire medium skilled staff faster and cheaper than any other recruitment network and also connects job seekers to these opportunities.

Romulo and Julianne are the regional leaders for Latin America and they have the hard mission to travel around most of South American countries to find out the best national startups. The job looks quite appealing but there is a lot of work behind: searching about each ecosystem, connecting with local influencers and organizing the events in every country (usually in a very short time).

After a national call for applications, the team has the difficult task to select 10 startups that will participate to the final local selection. For Brazil, there was one final in Sao Paulo and then another one in Rio de Janeiro to select the best startup of the country. Two days before the competition, the 10 selected startups were invited to receive a session of mentorship with the organizers and some of the sponsors, Swissnex and Grant Thorton. The goal of this session is to give some advices to prepare the pitches and to provide some guidance about the search of investments, one of the most difficult tasks in the life of a startup. The final of Sao Paulo was organized at the Google Campus Sao Paulo, to keep the spirit of technology and entrepreneurship …of course. Besides the pitches of each startup, two panels were presented during the event. The first one was a presentation of Aliança Empreendedora that showcased the evolution of its activities boosting social entrepreneurship and empowering women entrepreneurs. The second panel was a discussion about financial inclusion in Brazil and Latin America. It was a great conversation about diverse initiatives abroad, mainly in Africa and Asia and the beginning of some interesting projects in Latin America too as Compartamos in Mexico and Bim in Peru. The panel was composed by the ex CEO of Payleven, the Director of Marketing from PayU, the head of Innovation of Accenture and the founder of Avante. I wanted to give a special remark for Avante because it is a great Brazilian example of financial inclusion that can disrupt the local market. This startup has recently acquired Sling, an Israeli fintech that provides mobile financial services to small entrepreneurs. I do certainly expect a rapid growth and impact of this startup for the coming years. One interesting point highlighted is that beyond an excellent technology, the human contact is very important to penetrate the market of the unbanked people. I do agree with this point because technology will help a lot to fill the gaps of the current financial institutions but human contact will still be crucial to convince low income people that financial services worth it and can really beneficiate them.

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Going back to the competition, the finalists of the Sao Paulo event were: MGov Brasil / EduqMais , MeuCambio, QueroQuitar, ToGarantido, IU, Foxbit, MeuTicket, Veerbet, Mecasei.com and ReacHR. All of them presented a great pitch of their startups and answered the questions of the jury that was composed by investors, sponsors and the organization committee. …And the winners were:

  • Foxbit, a bitcoin broker, had a special recognition for having the most “likes” on the social medias during the event.
  • MGov Brasil / EduqMais, the winner for the education prize is a SMS platform for school-family/parents communication and engagement to foster participation in children education.
  • GoodTicket, the winner of the second place, is a solution uses the cellphone to do the payment and the reception of meal vouchers.
  • QueroQuitar, the winner of Sao Paulo, is a platform that modernizes the collection process using technology to alleviate and empower the debtor during this painful journey.

 

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After the final of Sao Paulo, Juliane and Romulo went to Rio for the finals of the country. For this last Brazilian competition, Bit.one won the second place. Bit.one is a platform that uses blockchain technology to perform payments (gateway, wallet, pre-paid cards, trade-exchange…).  And finally the competition in Rio confirmed the national winner, QueroQuitar. Natalia Alexandria, the representative of QueroQuitar will fly to Argentina in November for the regional summit and then to Switzerland next year to join the international network of Seedstars national winners. Great work Natalia and good luck for the next steps!

One of the sponsors of the event was PayU who will also support the events in Argentina, Mexico and Colombia. As you may know PayU is an international leading online payment service provider dedicated to create an efficient payment process for merchants and buyers. As an International fintech, PayU is involved in initiatives to boost the fintech and startups ecosystem. Present in 7 countries of Latin America, we celebrate when fintechs contribute to the development of innovation in Latin America.

Following the itinerary, nexts stops of Seedstars Latam are Argentina, Mexico, Colombia, Panama and Santo Domingo. Keep tuned for the dates if you want to apply to some of the countries.

As Juliane and Romulo, there are other Seedstars ambassadors travelling around Africa, Asia and Europe searching for disruptive startups. Where do they find this energy? According to Juliane, the team shares the values of any entrepreneur: proactivity, autonomy and passion for their work.  Certainly, thanks to these teams, Seedstars has become a reference of innovation and startups knowledge within the emerging markets.

All the winners can be happy to go to Switzerland to meet the Seedstars teams and investors. But more than that, nothing can compare the amazing experience of meeting the other founders: from Nepal, Bolivia, Korea, Brazil, Nigeria and 60 more countries…after all, diversity always brings more innovation.

Great job Seedstars!

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seedstars_argentina

Are you ready to be the bank of the future?

Last week, I attended the AIM Banking Brazil 2016 event that gathered banks and financial institutions of the country. During three days of conferences and workshops, the speakers triggered the audience to think about what could be the bank of the future.

Brazil is a big digital country. The internet penetration in 2015 was around 66% (source:internetlivestats.com). In 2020, GSMA forecast 72% of smartphone penetration in the country. More alarming, Brazilian population is addicted to smartphones: two in five would rather give up electricity and water than their device (source:emarketer.com).

How should banks respond to this social transformation? The AIM conference tried to provide a light to understand step by step what will be the bank of tomorrow.

First of all, let’s talk about Banco Original, the first 100% digital bank in Latin America. The bank has become an example of how a bank can disrupt the market. Banco Original deals with its clients without paper or doing lines in agencies because all the operations can be done online by cellphone or with a computer. Officially launched in March 2016, its first marketing campaign showed Usain Bolt to defy the public about how original can they be. The bank has an innovation lab that follows the last trends in technology and products. The head of innovation of the bank Guga Stocco, who has not a financial services background, pointed out that innovation today comes from all the sectors and any new actor as a coffee chain for example can become a direct competitor of a bank one day. The launch of Banco Original had also created disruption because at the same time regulation was updated by the Central bank of Brazil allowing to do the entire opening and closing process of a bank account by internet. This is an example that the local regulator is aware of the new trends of technology and it is willing to evolve. Financial institutions (banks or fintechs) have the responsibility to guide the regulator to accept new solutions that will boost innovation and at the same time protect the client and the economy.

AIM_BancoOriginal

 

Banco do Brasil, the oldest bank in the country and controlled by the Brazilian government, presented its innovation case too. Created a year ago, the innovation department has already created disruption within the historic institution. The team started slow and had some difficulties at the beginning but with the time they settled new methodologies and creative processes to change some internal practices and thus the culture of the bank. Innovation is not only about the final product for the client but how the bank works on the delivery of this one. Banks are starting practicing design thinking or lean startup methodology with new projects …But can a bank pivot quickly? As a startup?

Proactivity and allowing themselves to make mistakes are some new practices that banks have to learn. For that, the market designed some approaches to “learn innovation”:

  • Co-working space/incubators: Itaú opened the CUBO in Brazil, a co-working space where the startup community gathers. For the bank, this is an opportunity to have an overview and be close to a boiling local startup ecosystem.
  • Accelerator programs: Bradesco created the InovaBra Program two years ago. During 10 months, a group of 10 startups will work with the bank to improve their MVP. Startups have access to the resources of the bank and the bank learns about their technology and the way they work thanks to continuous interaction between both sides along the program.
  • Corporate Ventures: Santander created Santander InnoVentures. It is a fund that helps fintech companies grow from a very early stage (i.e. seed) to a more mature stage. So far there is no investment in Latin America, only in the US and Europe. In Brazil, Bradesco has recently announced the creation of a venture to invest in fintechs.
  • Acquisition: The most active bank in the world with acquisitions is BBVA who recently acquired Holvi, a Finnish online only bank. The integration process is still in process so the results of this type of relationship are still under assessment.
  • Innovation Labs: Banco do Brasil and Banco Original have decided to create their own innovation lab. All the innovation process are led from the own teams of the banks.

There is no evidence of a better approach, that’s why some banks bet on several options at the same time.

Whereas the innovation topic arises in the conversations, there is an expression that is repeated, “user experience”. All the revolution of the innovation leans on who is your customer and what can the bank do to create a unique relationship.

Let’s start with millenials…

They are a generation that today doesn’t trust banks, believe in sharing economy and prefer to spend most of the time in social medias. They were born with technology and they live for technology. For them, time is shorter because there is so much information available on the network. Artificial intelligence or virtual realities were concepts that belonged to movies some time ago and today are a reality. Millenials love technology but they also need to feel special. Nubank, one of the most successful fintechs in Brazil, is loved by the millennials. In addition to its great user experience, Nubank managed to provide a “cool” call center that provides customized attention to its clients. Google wallet is arriving this year in Brazil and millennials will certainly be the first adopters. The big challenge for the bank is how to hook this generation that breathes technology and innovation and tends to claim “I don’t need a bank”.

Another group of the population that cannot be neglected is the low income people. Despite their income situation, they do have a smartphone and most of them do not have or use a bank account. Innovation also means financial inclusion for a part of the population that most banks preferred to forget so far. Vivo (mobile company) launched Zuum, a pre-paid bank account that gives you a debit card and allows doing some financial transactions (transfers, payments…). All the transactions can be performed with a mobile.  Zuum has just started in the country but is growing fast and has a great potential for the coming years (40% of the population of Brazil is unbanked).

Once you know well your customer, you develop a friendly technology to deliver a product or service for a low fee. The kings of this know-how are the fintechs. Imagine a picture where several bees (call them fintechs) can hurt a gorilla (call it bank)… Several debates exist about the potential of fintechs to compete against banks. Let’s be realistic about one point, the fintech world is not easy either.

AiM_Guiabolso

 

GuiaBolso and BankFacil participated to the event presenting their business case and sharing the challenges that they have to face every day. Guiabolso was born with the purpose to help a Brazilian population that does not know how to manage its money and gets constantly indebted without any control or education. On the other hand, Bankfacil realized that interests in Brazil are incredible high compared to other countries and identified other alternatives to offer cheaper lending products (lending with warranty) that can alleviate the debt burden of the population.

Both fintechs claimed that the relationship with banks is not always easy because some banks do not see/share potential opportunities that could beneficiate both of them. From their side, they are always opened to have a conversation with banks because some interesting partnerships can be created. Compared to a bank that has so much capital, a fintech needs to hunt for investments at the same time that they develop their services, and certainly that is the most difficult part of any startup. Today, these two startups have gathered a group of mentors and investors that believe in their projects putting them as strong representatives of the Brazilian fintech world.

What have fintechs created within the financial services that make them so appealing?

Fabricio Dore, an innovation leader highlighted three structural changes that fintech set and is revolutionizing the banking world: the user is king (user experience empowerment), digital is the new identity of banking and the power of network (facility to connect with other startups/fintechs). The opened question for the audience was what are you doing to stop being a bank? My answer: follow fintechs.

During these days, I met people from technology, marketing or business representing a financial services institution. In fact, when dealing with innovation these three departments need to work together. Some organizations created the role “Chief Digital Officer” to be in charge of the digital initiatives. With the time, we expect that the Chief Digital Officer and the CEO will be the same person. Because digital won’t be an arm of banking, digital will be banking.

The main sponsor of the AIM conference is Technisys. I wanted to write a note about Technisys too because it is a Latinoamerican company that is spreading innovation in technology within the financial services community. Technisys powers Latin American banks to deliver digital services though all the channels. Founded in 1996, it has strongly grown with big clients including Citibank, Banco Itaú, Banco Estado de Chile and Banco Original among others.  Technisys was ahead of its time when it introduced the concept of omnichannels and digital and today these are the main services required by all the banks. Technisys is strongly involved in solutions and projects about innovation for banks. We consider him as a strong ally in the construction of a new environment of financial services in Latin America.

In Brazil, big banks have already started to position themselves developing digital products and looking for interact with fintechs. During the last World Economic Forum in Davos, international organizations debated about the future of the financial services system talking about fintechs and blockchain in front of an audience composed of worldwide bank CEOs. This was an awaken moment for the CEOs to really understand and follow the evolution of technology to define the future of banking.

The audience of the AIM Banking Brazil event was compound by big, medium and small banks…Each of them have to assess how to approach the innovation and the technology evolution because the path to the digital transformation will depend on the culture of the bank, the customer profile and the risk appetite of the organization.

The cards are on the table “digital is the future”, unfortunately there is no a unique way to arrive there but several combinations that need to be defined according to the strategy. Looking for a tip…Imagine what can convince a client to claim in all the social networks “I love my bank”.

Great event AIM and Hanson Wade!

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Colombia and its wildest imagination

Colombia is famous for its salsa dance, its coffee and is considered one of the happiest countries in the world. Some weeks ago, it was also recognized as one of the fintech entrepreneurship hubs in Latin America. Indeed, Colombia has recently worked to build a technological and innovative environment to boost the creation of startups and of course fintech.

The country has a solid economy with a growth above 3% for 2015 and a better estimation for 2016. By 2015, it became the 4th largest economy in Latin America. Some years ago, the government decided to invest in developing the technology and innovation sector, setting up the country as one of the region’s strongest. The ambition is high with challenging goals. By 2018, the government expects to have 63% of the country connected to broadband. And according to 2015 GSMA figures, out of a population of 48.6 million people, there are 26.1 million users of internet in the country and 51 million mobile connections. Tom Phillips, Chief Regulatory Officer from GSMA, states that Colombia is one of the fastest growing mobile markets in Latin America. The Colombian government has also launched the “Vive Digital” program to make internet accessible to the poorer households. As part of this program they developed the App.co program to build an entrepreneurial ecosystem in the country. App.co has already taught 50,000 people how to code. For 2018, it is planned to reach 90,000 people. In 2010, 10% of small companies had access to internet. In 2015, 60.6% of small companies do online transactions for their business (source datexco). Moreover, several private and governmental organizations emerged to educate and provide support to Colombian entrepreneurs, as for example Innpulsa, RutaN, la corporacion Colombia digital. The effort has paid and Colombia was considered by the world economic forum as one of the leaders on entrepreneurial ambition and innovation.

Big companies contribute to the entrepreneurial and innovative development of the country too. Talking about Fintech, BBVA Bank is one of the most active actors in the ecosystem. The Spanish bank has opened its first center of innovation in Bogota. This space presents the last innovations of the bank in technology and also organizes opened events related to entrepreneurship and digital technology. The bank is an unconditional worldwide supporter of fintechs. Every year, the BBVA organizes the BBVA open talent in three parts of the world: Latin and Central America, Europe and North America. This is a competition where the bank looks for innovative projects, products or beta-versions related to Financial Services (i.e. Big Data, security, e-commerce…). The winners participate in a 2 weeks program to meet high net worth people from technology and finance and executives of the bank. The goal is to start developing a project with the bank where both parts are winners. In the last edition, 180,000 euros were distributed among the 6 winners. In the South and Central America 2015 session, there were 196 participants and Colombia was the most represented country with 57 applications. For more information about the 2016 session, please click here.

On February 16th 2016, the Finnosummit event occurred in Bogota to discuss about Fintech in Latam. The main topics discussed during the event were Fintech opportunities and innovation, financial inclusion, blockchain and regulation. The Finnosummit event is organized by Finnovista, an international organization that accelerates the development of startups focused on digital financial services and empowers the fintech ecosystem worldwide. 260 people attended the event gathering entrepreneurs, investors, financial entities, consultants and organizations of development from all Latin America. During the conference, the Finnosummit challenge took place: a pitch competition among 9 fintechs previously selected by Finnovista. The winners were Aflore and Alegra. Let’s keep them in mind because they promise to be great actors in the Latin American ecosystem.

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Aflore: is a different type of financial services company. It makes loans accessible to the unbanked middle class through a network of informal financial advisors who people already know and trust. The contact between the lenders and the borrowers is performed through a technological platform. The company has already been awarded with several local and international prizes.

Alegra: is a software for small and medium companies to manage their accounting and invoicing through the cloud. The purpose of the startup is to beneficiate the small companies to take control of their finances. The startup is already present in Chile, Peru and Ecuador and they plan to reach other Latin American countries and the US soon.

Colombia had some exit stories too and the one in Fintech is Pagosonline.com. This startup is the Paypal of Colombia, leading the electronic payment service in the region. In 2011, the company was acquired by the multinational group Naspers, one of the major global players in electronic commerce and owner of a worldwide network of online payments platform called Payu Group. PagosOnline became Payu Latam and is planned to be the largest payment platform in Latin America (already present in Mexico, Peru, Brazil, Chile, Argentina, Panama and Colombia).

There are several activities of Fintech happening soon in Bogota, stay tuned:

  • On March 2nd 2016, there will be a conference about blockchain and digital transformation led by Digital Bank at Hotel Cosmos Bogota. For more information, please click here.
  • On March 3rd 2016, the Innovation Center of BBVA is organizing a tour with the Ministry of Innovation and technology, where the bank will share with the attendants its digital strategy and his work with the fintechs. For more information, please click here.
  • On May 25th 2016, Digital Bank Latam will organize the annual fintech meeting, where more than 300 attendants will discuss about the latest innovation in Latam on technology, payments and financial services. For more information, please click here.

The government, banks and private organizations have a clear goal: to boost innovation and fintech for everybody in the country. Today, 35% of the adult population in Colombia is unbanked and all the actors are working to reach them, not just investing in knowledge and knowhow but also in infrastructure.

New projects are now focused on identifying local and international investors and convincing VCs and seeds investors to settle in the country. Colombian startups have a lot of potential because they do act local but they become Latino American actors very quickly. Why not become global too?

Gabriel Garcia Marquez, famous Colombian writer said “It always amuses me that the biggest praise for my work comes for the imagination, while the truth is that there’s not a single line in all my work that does not have a basis in reality. The problem is that Caribbean reality resembles to wildest imagination”.

From the wildest imagination, we can certainly expect disruptive ideas. With so many initiatives going on, the Colombian fintech cannot disappoint us. Colombia seems ready to defend a leadership position in the Latin American Fintech arena.

 

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Fintech can also be social…

 

Press likes writing about how banks will lose their power on account of the thread of Fintech startups. Long articles are dedicated to forecast the future of the financial services industry that in addition to a strong regulation, new comers can steal a big part of the pie. Bets can start… some will back small David (fintechs) and others would prefer Goliath (banks). Who can be the winner?

 The winner is the consumer!

The mantra of any successful startup is “the consumer is the king”. Startups solve problems that the consumer suffers or create solutions that make him better off. Let’s be realistic, today none of us feels entirely satisfied with the products offered by our banks. By ignorance or risk averse, some clients remain stuck with banks that prioritize reaching financial goals at the end of the month instead of the goodwill of the client. For the year 2015, two of the biggest banks in Brazil presented records in profits. This is ironic in a country with a deteriorated economic situation where growth is negative and unemployment increases. In fact, banks earn more money when the client doesn’t know what is contracting or simply do not understand.  

To counterattack this situation, Fintech startups can play a key role empowering the consumer.

I do believe in social entrepreneurship model and its impact in our society. If you think carefully, a Fintech startup can also be considered as a social enterprise. According to the Brazilian central bank, 40% of the financial active population is unbanked in Brazil. Fintech startups, with their technology and mobility, can definitively target this market and boost the financial inclusion within the country. In all Latin America the problem is very similar opening the path to startups to attend this forgotten market. Fintech startups build social commitment when increasing access to financial services. On the other hand, Fintechs also create social impact with the “banked” people playing the “transparency” card. Usually, they offer a service that is easily understood and controlled by the client. Products or services are very similar to the ones offered by a bank except that clients pay less fees in most cases. According to Let’s Talk Payment publication, it already exists startups enabled to substitute any service of the banking value chain. In other words, Fintech startups represent choice, new alternatives that release the consumer from the monopoly of banks. With the agility of Fintech startups clients become trained and empowered vis a vis of financial products. Indeed, the Fintech ecosystem has the power to evolve society. Thus, Fintech innovations should be advertised as something that anyone and everyone can benefit from.

In Latin America, I had the opportunity to attend a conference where Thiago Alvarez, one of the founders of GuiaBolso (Brazil), presented the history of how GuiaBolso was created. During his speech, he insisted in the purpose of the company to improve the financial health of the Brazilian population. GuiaBolso is a Personal Financial Management (PFM) platform that automates budgeting and guides financial decision-making through an application. Knowing that Brazilian population struggles understanding and managing its monthly budget, GuiaBolso launches a tool that provides advice to control and save some money. GuiaBolso has become one of the most famous applications downloaded in Android and Apple in Brazil. Making Brazilians savvier with their expenses is one of the main messages of GuiaBolso and one key of their success too because the goodwill of the clients is showed above all.  

More Fintechs should follow the example of GuiaBolso and communicate more about the purpose/values of the company and the benefits that they are creating for the users. Banks should not be the worries of the Fintech, but the users.  

As a Fintech founder, as an influencer or as an user, our mission is to raise awareness about Fintech startups to reach a bigger audience. Target market should not be limited to millennials or financial/tech specialists. Fintech startups represent a real option to improve money management and that is the problem of any human being.  

 

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Fintech needs you!

I decided to start this blog because I believe that the Fintech knowledge has to be shared. I am currently living in Brazil and I want to show what is happening in the Latam market. Sometimes, I will also write about other continents because they can be great references and models for Latam countries.

Why did I start this experience with the sentence Fintech needs you?

Because Fintech needs all of of us.

Fintech needs Banks and Insurance companies. Some people say that financial startups are enemies of  banks, others say that they are allies. Remember the annual letter that the CEO of JP Morgan, Jamie Dimon addressed to the shareholders warning that “the Silicon Valley is coming”. Banks are certainly worried about the thread of this newcomers however they are also aware that they can learn from them. Today, several international banks are leading accelerators program for Fintech startups. The Fintech industry is thus learning about the stakes of big banks and how they can work together. Interesting outcomes will appear from these relationships and that is what makes the current financial services industry so exciting.

Fintech needs investors. Fintech needs venture capitalists, seed capital, angels, crowd funding from all around the world to create new solutions and reach more people. I feel that Latam Fintech is not yet internationally well known. The Fintech industry is growing within the Latam countries but we need that international investors inquire about what is happening in Latin America and decide to invest. This blog can  help to advertise the high potential Fintech actors that we have in Latin America.

Fintech needs users. We assume that the millennials are the first users to the new technologies and the disruptives services of the Fintech. We are not wrong however we also need to involve the other generations that are curious about innovations. In technology, there are new solutions popping up all the time. Hence, people requires some guidance to use the best app or website that will really solve their problems. The blog expects to bring some light to the increasing offer of technological innovation in the financial sector.

Fintech needs partners and employees. During a Fintech conference in Sao Paulo, one of the founders of Guiabolso, stated that especially in Fintech the team is key to make a difference. The experience and complementarity of the team members ensure success. Most of the Fintech founders have already worked in banks or insurance companies before starting their startups. Team background brings credibility to convince investors. For example, this blog can gather a financial community and with that some interesting job opportunities can emerge.

Several challenges and opportunities are surging within the Fintech ecosystem that is why it is so interesting. So, Fintech is in vogue…true. It is even becoming fancy. Nevertheless, Fintech also represents inclusion. This industry will allow more people to have access to financial services and also will teach how to deal with money in order to reduce indebtedness. Fintech can also be a social business.

A new financial landscape is being built and everyone wants to be part of. With the rise of Latam countries in the startup ecosystem, we expect Fintech Latam to reach a new level and be disruptive. I am confident that we will see this progress soon.