The bomb exploded on Tuesday and dispersed its splinters throughout the local financial ecosystem.Fintech and traditional banks staged a cross that put on the table the tension that exists around the regulations perceived by the digital sector.
Strictly speaking, the banking entities asked the Central Bank (BCRA) for greater regulation of fintech, as a result of a report issued by the Association of Argentine Banks (ADEBA) and developed by FIEL, which mainly pointed to the company of Marcos Galperín.
In this sense, they warned about the "regulatory and tax asymmetries between regulated and unregulated financial service providers that undermine the development of financial inclusion".
The work prepared by FIEL also indicated that it is necessary "to achieve a symmetrical and adequate regulatory framework and tax treatment among financial services providers, so that the greatest possible competition is achieved and that the result reflects the efforts and capacities to offer better services to final customers. "The Argentine Chamber of Fintech, which brings together all companies in the sector, responded quickly.
"ADEBA is going out to embarrass the field, beyond the study of FIEL, which contains subjective affirmations, some of the measures proposed there are shared, but it is dissociated from the communication of the banks, which confuses concepts, in Fintech there are many verticals" , indicated to iProUP, Juan Pablo Bruzzo, president of the Chamber.
The executive also said that "only through collaboration with the traditional financial system can we face the challenges of financial inclusion with which the current Argentine reality challenges us".
Osvaldo Giménez, executive VP of Mercado Pago, also picked up the glove. Through a series of tweets accompanied by the suggestive hashtag #Nolohizounbanco, he highlighted the advances that fintech segment companies have achieved in recent years in terms of innovation and financial inclusion.
According to the manager, the fintech reached the following milestones:
- "We innovated creating an interoperable QR, we offered it free to the merchants and in 12 months there were more than 8 million payments from cell phones"
- "We democratize credit card payments, doubling the number of businesses that accept them, we have already sold 900,000 Point mPOS devices sold"
- "We gave loans with our capital to more than 40,000 SMEs that did not have access to bank credit, the average loan is $ 73,000 for a term of 12 months"
- "We managed to get almost 400,000 people to invest their savings from $ 2. We did it in 9 months together with Bind, who is encouraged to compete and collaborate""For decades, financial inclusion in Argentina has been very low, it is easier to make excuses for the lack of regulation, than to innovate and compete," said Giménez.
The banks-fintech conflict is not new. Hand in hand with more lax regulations, the platforms that bet on financial inclusion through digital channels managed to position themselves in a market historically dominated by traditional entities.
It is not a passing phenomenon: the sector shows a constant growth that forces us to rethink not only the way to attract new customers, but also to conserve them.
The figures of the BCRA prove it: the fintech are stronger than ever. Does a new era begin for the banking segment or will the "tailwind" end when the regulations increase?X-ray of a segment on the rise
The phenomenon of fintech has accumulated several years, although in Argentina its explosion began just three years ago, when the Central Bank opted to give a strong boost to the sector with the aim of expanding the Argentine financial system, the smallest in the region. .The results of this policy are visible, according to the entity:
- The number of POS devices doubled (so that businesses charge through cell phones),
- The number of credit cards has grown without a traditional bank behind
- Committing accounts were duplicated, which are those that allow trading on the stock market
- The total of electronic transactions, which had entered a period of stagnation, expanded strongly.
Since the BCRA permanently analyze these numbers, but also admit that it is a complex process because, although 80% of adults have a debit card, that does not mean that they participate in the financial movement.
The growth of fintech shows that the phenomenon is expansive and that people seek to solve simple and everyday operations, ranging from transferring a small amount to another person to allow a neighborhood store to charge with a cell phone equipped with a dongle (device that it is connected to the mobile and through which the credit or debit card is passed), among many other uses."We had 450,000 POS (Point of Sale) in operation in 2015. Today, we already have 800,000 POS with a dongle and another 800,000 POS, Ualá, for example, has already distributed 800,000 cards," says Horacio Tomás Liendo (n).
The figures show rising figures and perhaps the most representative are those related to the comitentes accounts (to operate in the stock market): until a year ago, there were 350,000 open, but since Mercado Pago launched its investment fund together with the Bank Industrian (BIND) joined another 350,000.
According to Liendo to date, there are already 900,000 operating accounts, largely thanks to the fintech impulse.
The same data was shared by Osvaldo Giménez, vice president of Mercado Pago, who points out that this phenomenon is a clear reflection of the interest of thousands of small savers to learn to invest in financial instruments.
In turn, it coincides with what was expressed by Gastón Irigoyen, CEO of the Fintech division of Naranja, who indicates that the company's strategy is to target traditional financial means plus a pool of technological products and services, where some are financial and others do not."We seek to solve the needs of people and find the right mix by looking for what happens outside and adapting it to real needs," he says.
When it comes to defining what people seek to solve, their response is clear and forceful: "How to save, how to get to the end of the month, how to make a fixed term or buy dollars."
"The needs of a large number of people are as simple as, for example, how to send the money to a friend who paid the pizza last night, that is, custiones from day to day that require simple and efficient solutions," says the manager of Fintech Orange.Impacts and expectationsThe data is more representative when looking at traditional numbers, such as savings accounts and card availability, and what happens with those alternatives.
In order to comply with the payment of social benefits, in general from ANSES, the State opened more than 25 million accounts. In this way, he was able to respond to a large number of people quickly and transparently. This resulted, in turn, for 80% of adults to have at least one debit card.
However, this tool does not show its counterpart of use in the financial system, traditional or modern. Because a large part of those users, once they receive what they have contributed, take all the money out of their savings accounts and start using them in cash.
Education is the great driver of the greater use of the financial system, which now has fintech as the main protagonists of greater inclusion.
The numbers support this statement: "Electronic transactions grew 16% in 2018. Until then, they remained stagnant for years," says Liendo, who reiterates the central role fintech is playing in financial inclusion and its contribution to the greater expansion of the Argentine system.Of course there is a long way to go. Access to credit in the country is only 13% of GDP. It is the lowest in the region and the World Bank figures corroborate it:
- In Chile, it's 112%
- In Bolivia, 65%
- In Brazil, 60%
- In Colombia, 50%
- In Peru, 42%
- In Paraguay, 40%
- In Mexico, 35%
Argentina still has a lot of work to do. And much of the improvement will come from the agreements between fintech and traditional banks.Expansive ecosystem
The historical questioning of traditional banking is the lack of regulation of the BCRA on fintech. The entity always responded that it does not regulate them because they do not take deposits from savers to lend.
He also recalls that for three years the highest monetary authority has been deleting unnecessary regulations for traditional banking, such as removing the obligation to have guns in bank branches or enable processing in the cloud."We need to lower the costs to the banks and this is what we have been doing, in the payment and financial system there is still a lot to grow," says Liendo.
The figures of the fintech account for it. In the last year the amount increased by 63%, reaching 217 companies of this type, according to data from the Argentine Chamber that groups them.
In a work he did together with Accenture, he determined that:
- 58 of them are dedicated to granting credits
- 39, to digital payments
- 29 are technology providers for finance
- 25 focus on blockchain and cryptocurrencies
- 21, to B2B fintech services.
There are also those dedicated to investments (18), collective financing (16), insurance (7) and cybersecurity (4). In 80% of cases, these are small and medium-sized companies that provide innovative services that are distributed in different areas of the country.
"What needs to be done is more for the financial system in an integral way than for fintech in particular," says Juan Pablo Bruzzo, president of the Argentine Chamber of Fintech. A statement that makes more sense when, inevitably, many banks are turning to them to innovate and respond to new demands.
Otherwise, fintech will continue to capitalize on the lack provided by the system. Ualá, which works through a mobile app and issues a Mastercard credit card, began offering credits this month that are credited in just 24 hours.
Customers can request up to $ 100,000 and return them in six, 12, 18 and up to 24 installments. This chance to lend is due to the funding that has been received since it began to operate. In the beginning it was Goldman Sachs and George Soros who made their bet. Recently the support of Tencent, the largest Chinese investment fund, was added.
Easily, at the tips of your fingers, with external money and the ability to solve emergencies or everyday things. This is how the fintech stops in the Argentine market. And from the regulator endorse the "follow follow".