The battle between the banks and the fintech added another chapter. In principle, there was a first technological transformation that served the traditional banking to gain efficiency and strengthen a new bond with its customers.Now, financial institutions were directly launched to the market with the same products and services that were initially exclusive to digital players.
The most recent step was given by Banco Hipotecario, which launched the portal buhobank.com, a platform from which it offers products and services 100% digitally, with the possibility of opening an account and having a credit card with just one selfie from the cell phone.
In this way, it is added to the list of banks such as Galicia, ICBC, Itaú, Ciudad and BIND, which deal with from onboarding (registering new clients) to the granting of loans on the spot without the person step on a branch.But to what extent can the banks match the services of the fintechs? What role do regulations play in this process? Who is the winner?
"Today, there are new competitors, with 100% digital banks, we understand that there are customer needs that are appearing, we are facing a digital transformation in order to follow the evolution of the market," explains Guillermo Mansilla, retail banking manager of Banco Hipotecario.
The entity became the first to implement biometric identity validation with the online endorsement of Re.Na.Per.
In the same line, since ICBC also have facial biometrics systems, which among other things is used to generate the registration of fully digital clients, so that new users can request a credit card remotely.
"In a few minutes, the data is loaded, validated and the delivery of the products is coordinated", they detail in the entity and specify that 95% of new card registrations are already made through the app.In the City, most users practically operate without going to the branch. 90% of fixed installments are made through web channels, while half of the loans are requested online.
"In many cases, they are customers that we already had before, we already know them," says Maximiliano Coll, general deputy manager of commercial planning.
At this point, he recognizes that "the most difficult step is to register a new customer from scratch, from a person we do not know and to know him, as he marks all the washing regulations and risk systems of the bank, but without the need to see it in a branch or without visiting it. "
In that sense, in the middle of last year the City Bank launched the first 100% digital card so that a person can not only ask for it without going to a subsidiary, but also buy for the first time at the same time he requests it, without the need to have plastic."74% of our customers in the Personal Bank segment are active users of our electronic channels," he explains.
One of the first ones that got the most out of a specific business unit destined to offer products and services in a digital way was Galicia, which in 2014 created Move.
Although from the beginning it was the digital arm of the bank, at the beginning it aimed only at university students and in 2017, when the digital banks boom began in the world, they expanded that target to transform it into one.
"Our difference with fintech is that we are a digital bank that uses the best of traditional banking, summarized in three points: security and the confidence of having the support of an established institution, the distribution network and customer service; the discount network ", says Pablo Gutiérrez Oyhanarte, general manager of Move.
In addition, he adds, Move has the advantages of a fintech to differentiate itself from traditional banks: they are much more agile, closer, with a much more personalized communication tone for this type of users, which is more digital.
"The idea is to leverage on the best of each and give this differentiating offer," says the number one of the largest online bank in the country, with 125,000 accounts.On the other hand, Alejandro Cosentino, vice president of the Argentine Chamber of Fintech, assures that no matter how much the banks want, they will never have the speed of the fintech to give credits "on the fly", in less than 10 seconds.
"Fintech's first thing is empathy with customers, because they have to win market, a bank is profitable, a fintech is not when it is launched," says Cosentino
Sebastián Bottcher, general manager of Nubi, agrees on this differential. "It's not that the banks wanted to look like fintech, but that the fintechs got much faster on the user's side and focused on where the service was not as good as the customer expected," he reasons. .
In his understanding, in this technological advance, the great barrier that banks have is the 'legacy'.Loyal or unfair competition?
"The banking systems are made on software built in the 80s, hyper-robust as they should be to handle the level of financial transactions that exist, but almost impossible to adapt to the current technologies on which the fintechs are based", argues .From the City, Coll considers it logical that banks are regulated, since they manage funds from third parties. And it stands out as an advantage that they have demand deposits, something that cheapens bank funding.
At this point, he emphasizes that "all those regulations make them very robust from the safe but less attractive from the usability".
"I would love for the bank app to enter and show you the balance, but you can not because there is a regulation that states that you have to enter a username and password, which must have at least 8 characters, capital letters, numbers," he says. Coll.
And he adds: "the norm says, we do not do it for badness, as well as the fact that once a year we are obliged to ask to change the code".
Claudio Cesario, the owner of ABA, the association that groups the infringing entities, between traditional and digital entities, there are regulatory asymmetries and sees no reason why the latter are not regulated by the BCRA.
"With the fintech, we want to compete on equal terms," he complained, reflecting a claim that along with public banks and private nationals had led throughout 2017 to the directors of the Central.
In regulatory matters, in the middle way are the digital banks, which are under the orbit of the monetary agency, but as they do not have branches, their operating cost is much lower.So far, in this group there are only three:
- Wilobank, of the businessman Eduardo Eurnekian and helmed by the former Banco Provincia, Guillermo Francos.
- Brubank, from former Citi number one, Juan Bruchou.
- Rebanking, of the Transatlantic Group.
"In the process of onboarding we make risk decisions, not only do we open an account, but we also provide a loan, a credit card, and we turn it into a client completely," says Juan Ozcoidi, executive director of Wilobank, which counts with the seal of being the first 100% digital bank in Argentina.
"That initial step of supplying the entire basket of products is offered by almost no one and it is difficult for traditional banking to do so," he adds.Beyond the new players, Mansilla, of the Mortgage, today sees as competition more to the traditional banks, with the new digital products that can launch that to the fintech.
"We have more than 130 years in Argentina and a very important client base that serves us to satisfy the needs of the market", explains the manager, who adds: "The new 100% digital banks are also competitors, but I think they are in another stadium. "
Summers, from Itaú, points more to a natural evolution of the business than to a specific competition.
"The future of banking is in the online channel, we aim to be as digital as our customers, cell phones will become our natural habitat, we know that whoever does not embark on the path of financial transformation will have no future," he says.
On the other hand, Gutiérrez Oyhanarte, from Move, points out that "fintechs are finding it increasingly difficult to differentiate themselves from banks".
"One of the biggest differences was the registration process, and the government and the BCRA worked very hard to make the 100% digital validation system, for which there is no need to sign any paper," he summarizes.
Strictly speaking, both the Central Bank and the Executive made a breakthrough in the last three years to facilitate the use of technology for banks.
From the Rosada, one of the steps that contributed most in this direction is related to a decree that modified the Law of Credit Cards, eliminating the obligatory nature of the ortographer signature to authorize the plastic."If the user of financial services is changing, they also have to do the tools to get close to him," said Mateo Piccolo, one of the heads of the Financial Innovation Board Fintech of the BCRA, in one of the publications of the entity's blog. .
The line that differentiates fintech from banks is getting thinner and thinner. Either by technological advances or by the official position of achieving universal financial inclusion.
Thus, with similar products, the commercial battle to win market aims to be more aggressive. And in this, more than ever, the consumer will be the most benefited.
"In the long run, the one who wins in this type of process is the client, because he will have more alternatives, if he has options, people are free," Cosentino concludes.