Red Link: how Argentine banks seek to save time with QR, digital money and biometrics
Red Link is one of the Argentine companies that is working more strongly in the digital transformation. Although it is known as the ATM network of the main state banks (such as Nation, City and Province), it is currently a comprehensive technology solutions company for the financial system.
In this sense, the company also provides home banking and mobile banking platforms, in addition to offering ValePEI: an app that allows payments by QR and immediate transfers between users.
Jorge Larravide, Chief Operating Office of the firm, devoted all his professional life to the banking sector and at least a decade to digital banking. For 11 years he has been part of Red Link and from there he works to generate increasingly innovative alternatives for this market.
The executive spoke with iProUP about the sector in Argentina, its present and its future.
- How is digital banking today in Argentina?
- It is in a process of transformation and maturation. According to the Central Bank, there are 45 million debit cards. Of course, they do not correspond to 45 million people, since many operate in more than one bank. In our case, the average is approximately 1.3.
The challenge is more oriented to work on the habits of people and technology, which day by day advances and grows at an enormous speed. That is where you still have to go deep, work, explain, but above all, draw doubts, avoid insecurities.
However, digital banking is maturing. In fact, many of the electronic channels that people use are underexploited. In countless operations, people are restricted to using about five, six, seven things. At the cashier, the user takes money and checks balances; in a mobile app, see the movements, pay and transfer. But there are countless operations that could still be solved that way, without losing time. However, there is still a tendency to go to a physical branch.
- What are those operations that could be solved virtually?
Today, almost any transaction that an individual demands of a bank is available digitally: operate an account, a credit card, a personal loan, some type of investment, fixed terms, funds, actions, loyalty programs. Even, the opening and closing of products.
Perhaps, for much more specific loans that require another analysis, such as a mortgage, a mix between digital and physical interaction is still required.
On the other hand, we are witnessing something that is excellent news for Argentina, which is to have the first 100% digital bank: WiloBank. It is the first case where you can become a client without ever going to a branch or carrying a paper. I tried it, I am a customer and it is a fabulous experience, very different from what we are used to.
- Within digital banking, what are the services that are being developed the most?
What is currently being highlighted and growing at rates of more than 500% are digital wallets. They offer the possibility of not using physical money, that people send funds or pay a professional with QR. Basically, it is about making digital money prevail and using less physical. It is part of the challenge.
- What are the benefits of electronic money over the physical?
They are many. If we see it from the place of the end user, who uses the services, the benefit has to do with the comfort, the usability and the experience that implies doing everything from an application. Since registering as a customer in a bank, make a payment to any type of purchase or transaction absolutely immediately.
We must also highlight the security: operate by any type of device and channel of a bank is completely safe. If there is a violation, the same bank backs you up. On the other hand, if you are robbed of cash, nobody returns it to you.
As for the system in general, the main benefit has to do with efficiency and with lower costs. Today, the silver gives as a kind of return to the dog: it travels from one place to another in lorries and in many cities and towns throughout Argentina it takes thousands of kilometers.
All this costs a lot and is very inefficient. If all that currency is digital, that amount of money rotation will be less and, therefore, lower costs. In that sense, they all win: the user and the bank, because it is more efficient and safer.
- For the digital banking to be installed, it is also necessary the support of the authorities, is there support for this to happen?
Indeed yes, that is very noticeable. The Central Bank, especially during the management of Federico Sturzenegger and Lucas Llach, enabled a lot of alternatives that would allow building a digital and payments ecosystem where traditional banks and fintech are included, something that three years ago was unthinkable.
Little by little, fintech is beginning to be combined operating with banks in a collaborative way and offering better solutions for people to choose the option they like the most.
- What is the response of the users?
The behavior is a little varied. In general, what happens is that the adoption of a new technology is not so fast, but once it is used and verified that it works well, that it is useful and safe, and that all fears are dissipated, the intensity of use It is very high.
On the other hand, the behavior is not the same in smaller or remote places than in large cities, in many people have less time for paperwork because they work many hours, which yes or yes need to optimize time.
Another variable is the age range. Of course young people embrace technology faster, but lately it is happening that even those of more advanced ages begin to use it. For example, retirees and pensioners who can now do the faith of life using biometrics. Maybe they do not use a digital wallet, but they do start using the debit card to not be withdrawing money.
That's why I think it's about working hard on people's habits. There is still a great lack of knowledge. You have to spread, communicate and explain that things can be done, that they are not so difficult. The best use cases are given, in fact, by word of mouth.
- So, the main fear of people is security, how is that overcome?
Indeed, it is one of the main barriers that must be broken. Many of the queries we receive have to do with that. The reality is that from the user side there are a number of alternatives that you can use to get around it.
For example, you can set your available limits. In the case of wallets, you can even turn your debit card on and off if, for example, you have to go to an unsafe area.
From the side of the entities, today there is a huge equipment infrastructure working 24 hours, seven days a week, to stop any situation that could be minimally suspicious.
- Will traditional banking survive?
I think it can coexist perfectly with digital. In fact, today they are doing it. It is true that it will win more and more space to the traditional and physical. Undoubtedly, it will be like that, but it does not mean that physical banking will disappear, but that it will surely be transformed.
- What is the tool that has the greatest potential for development, at least in the short term?
Definitely, biometrics. It goes in line with innovation, safety and to make life easier for people. It is a very interesting technology, especially in a country where we boast of having invented fingerprints. We are already working on a system that allows biometrics at ATMs, where one can operate simply with the fingerprint and without a card.
And this is only the beginning, biometrics will be used in mobile applications and for all types of operations. This concept of physical plastic - whether debit or credit card - is something archaic, which is decades old and more vulnerable. At some point, it will tend to go down and eventually disappear.
In the future, the recognition of the iris, the voice, the pattern of veins will also be used and, even, they can be combined with each other, depending on the type of complexity of the operation. Biometrics, and later the rest of these technologies, will help facilitate all types of operations and to do so with the highest level of security.