In Latam, financial companies that are seeking to become Fintech and collaboration platforms face challenges that depend, among other factors, on the maturity of their country regulation, technological strategies and business models of the different players in the value chain.
For the financial industry and the fintechs, the path inevitably leads to consider open infrastructures. Data availability is the most relevant asset in the supply of financial services, and it implies profound changes in the production, distribution and delivery of products in the short term.
During the 2021 Open Bank Latam conference, Javier Dario Martin, Head of Operation & IT department, Banco Falabella Colombia and Juan Daniel Ramirez, Open Banking Director, Banorte, commented on this issue and answered some specific questions from the audience, which we share below:
Ana Maria Yumiseva, Director, Frecuencia Money (AMY): What process are you using to collect customers data analysis in order to offer them new services? Are you incorporating third-party solutions, in which areas?
Report: Evolution of digital payments with smart infrastructure
Javier Dario Martín (JM): We are investing heavily in everything related to machine learning and advanced data analytics in order to generate value from the data, from a product that allows the user to understand that the product is not only a financial one but that reaches beyond. Products or solutions such as Open Data or seller´s financing, increasingly require data analytics to bring it closer to the end user, and not so much to intermediaries. We are working in this line, obviously big data analytics models of all kinds is obviously strong; whether from either lineal regression to proximity of points or addressing communities.
Juan Daniel (JD): We are trying to somehow use technologies already available in the market; and we are approaching different companies and suppliers that can help us capitalize on data consumption and generate the proposals and service offerings defined as part of our strategy.
AMY: What recommendations would you give to a smaller bank or cooperative that is interested in lending its platform to the ecosystem and implementing services based on APIs or in Open Bank?
JM: I think that it is important at this time of transformation to think about new initiatives within the collaboration economy. It seems to me that it was demonstrated in the industry that the more we collaborate, the better the product and the value proposition we put in the user´s hands. To those who are just starting out, I tell them to dare to be a part of a larger value chain, to be a link, to add their wagon to a much larger train; because I think that this will allow us to take this revolution of financial inclusion to a place of greater value.
J.D.: I agree. I would add first to be crystal clear about the objective, and about the use of an Open Banking model. That being the case, the design of the strategy, as Javier stated, and the aspect of the collaboration is vital. Fortunately, many fintech companies and banks have already started on that path. We are also taking the principle of Open Banking externally, as a collaborative networking tool where we share positive and negative experiences. I think this could be a starting point where these smaller banks and companies can take advantage of the opportunity to be supported by companies that, through their use cases already implemented and with proven results, can accompany and support this implementation process.
As Javier points out, being open to the collaboration and to the use of technologies and models already tested at present time, especially those coming from Europe, can be advantageous and conducive to saving time and money.
AMY: What is the most in-demand API-based application or functionality in your countries?
JM: I do not know if there is one specific functionality. I am strongly biased to interoperability of platforms. I think it is essential to make the ecosystem interact energetically because that will provide greater potential for financial inclusion. And obviously immediacy, meaning what the new generations have been passing along to the not so new ones, to the whole user segment that requires immediacy. It is no longer normal to wait two, three, four days for something to happen. And I think that this combination of immediacy and operability is already taking place, but will have more and more strength, more push, to provide a differential value in the market. I would bet that the immediate evolution is heading this way.
J.D.: I agree, and be aware that there is not only one way. I believe that the use of APIs must be seen as a way that an ecosystem integrates different services and solutions, thus providing the user with immediate experiences in all areas. In this case, the aspect of integrating the different financial models and the approach to user´s finances through APIs will be, in many ways, a key element in the immediate future.
