Last week was a great week for the world. Fintech in Argentina with the recent announcement of Ualá. The firm announced a new and seemingly innocent function: collecting salaries through its platform. This week Mercado Pago also increased the bet, allowing transactions with MEP dollar. More than simple innovations, these news They are a cultural triumph, which recognizes that behind technological change, there are new value chains and an ontology of processes, new and constantly changing, difficult to grasp and join from the traditional banking building..
In Brazil, Nubank has revolutionized the sector with innovative proposals. In Mexico, clips is transforming the way small business owners process payments; in India, Paytm is redefining e-commerce with its focus on mobile payments. In Chile, innovation began with Rut account, something like a universal wallet, and which has allowed us to expand the country’s economic base. Then he followed MACH aimed at the youngest segments, aiming to simplify the relationship with money, promoting financial education and with a 100% digital offer. A similar story, of harmony with cultural and technological change, is OnDeckwith its small business loans; Roostify, with its mortgage offer; SoFi, known for its refinancing, lending and wealth management services, uses an algorithm that considers factors beyond income and credit history, including education, career and estimated cash flow. Klarna With its application it revolutionized payments for online purchases, offering options such as interest-free installment payments and financing plans from six to 24 months. Upgrade which provides personal loans and online financial services, which also offers credit cards, checking and savings accounts, and credit monitoring. Valon, which helps homeowners with mortgage servicing, providing options such as finding suitable loans, refinancing, and tapping into home equity. Impossible to leave out GoodLeap, specializing in sustainable home improvements, including home solar conversion financing. It uses its subscription engine to speed up approval processes and offer flexible payment plans. Finally, Spiffwhich automates commission payments, streamlining workflows for sales teams and ensuring sales reps are paid correctly and on time.
These examples serve to describe that the opportunities are multiple, when there is already a significant captive customer base that provides the great element: data.
The next stop on this fintech route is the credit business. With an invaluable asset like data, who better than a fintech to evaluate the credit risk of its clients or understand their consumer preferences? This will allow them to have very accurate profiles of their users, a deep knowledge of their payment behavior. While they build these data repositories, they are preparing to enter with an advantage in the management of investment portfolios, both private and pension funds.
It also allows them to incorporate insurance offerings; return to the fray with its crypto offer, as soon as regulation allows it, which may even include an internal market for tokenized assets that allows goods and services to be monetized in a disintermediated manner, advancing a factoring and confirming business, open to small entrepreneurs.
Let’s not forget about high-value technological devices. Will there be a better marketing distribution channel for products like iPhones and other high-value products? With the sale of these luxury products will come offers of long-term credits, tourist packages and automotive credits. Data rules!
I can understand the reaction of traditional banks: they realize that they lost the race of innovation and cultural change, before listening to the next talk about digital transformation. Technological innovation is unstoppable, and seeking incremental and gradual solutions can result in writing in stone that they have lost, forever, the participation shares they once had. It only remains for those banks that are still alive to re-enchant that traditional public, to look for a niche, where they can still make some difference, or compete. Ouch!
* Miguel Papic is a businessman, president of the Human Freedom Foundation
by Miguel Papic
