Porfirio Sanchez Galindo on the rise of Fintech
Financial technology (or fintech) is a flourishing industry, and with its growth the opportunity is presented for underserved populations in Latin America and the Caribbean to improve their financial landscapes.
Mexican mathematician and economist Porfirio Sánchez Galindo analyzes how this is possible.
A united front
Change is a collaborative effort, and the incorporation of emerging Fintech requires collective awareness in all governmental entities in Latin America and the Caribbean.
Make no mistake, this is happening. In fact, Galindo points to Mexico as an example. The country passed a bill in 2018 to help regulate financial technology companies, a project that many have seen as a step in the right direction towards better access to financial technology.
The same goes for Brazil, where its Central Bank is configured to facilitate the use of existing ATMs for clients of Fintech startups and digital banks. The change should help these companies to combat distribution challenges.
Both examples are positive footprints on a path that forms slowly. Although Fintech products and services have been used in Asia and Africa over the past decade, they are still lacking in Latin America. Better incorporation means minimizing low credit / GDP ratios, non-traditional financial sources, high service rates and helping all citizens use a banking service to manage their finances.
Porfirio Sánchez Galindo stands firm on the growth of fintech, and this is due in large part to the benefits it has received from the advances made in artificial intelligence software. Now, financial companies can incorporate artificial intelligence to do things like serve as automated investment assistants, manage client portfolios online or help users join digital broker platforms and / or microinvestment sites. The latter is of particular interest, since it is based on the fact that users do not need to invest large sums of money to participate.
Understand emerging trends
Above all, Porfirio Sánchez Galindo urges countries trying to incorporate fintech products and services to follow current trends, especially given the constant growth of the industry. Some of these trends include:
1. Bank / Fintech Associations
As financial technology grows, so do the wishes of banks to partner with financial technology companies and use their many products and other offers. For example, online lenders like Kabbage and Upstart so that they can offer better digital loan options to customers.
2. Customer Information
The tools that banks offer to their clients are growing both in supply and in importance. Call it opportunistic; But Galindo also underlines the importance of financial companies supplying their clients with what they want.
Much of this comes in the form of financial assistance. Customers want to know when to pay bills, if a transaction they did not authorize, how much they spend per month, etc. Expect more information as Fintech grows.
3. A change in the workforce
With the emergence of AI comes automation, and with automation comes improved efficiency. What does this mean for employees? Many banks want to keep their jobs while increasing day-to-day efficiency. So, while it may seem literally as if robots take over, it will often be reduced to employees preparing to train in digital banking management roles. Changing times, changing duties. And for Latin American and Caribbean countries, what jobs could be created to implement AI and improve financial management opportunities for citizens?
4. Expect technology companies to get more involved in banking
It seems that each company has its own credit card now. In addition, many companies are experimenting with payment processes. Whether Apple Pay, Venmo or Facebook, we are in the midst of a growth in “forms of payment.”
Entering the future
Regardless of the progress in fintech, it is up to the governments of Latin America and the Caribbean to use the resources available to build better financial services. Collaboration is key, AI is ready for study and trends must be monitored.
Doing so will help generate promising paths for countries as financial offers for their citizens improve and subscribe to a world that only seems to be growing in financial knowledge.
Porfirio Sánchez Galindo completed his studies at Stanford University before serving as Chief of Staff of the Secretary of the Treasury from 2000 to 2006. Later, he worked as Chief Economist and Marketing Director for Televisa, the largest Spanish media conglomerate. It specializes in marketing and management strategies and often provides innovative support to the financial technology industry.