Pablo Ces, CEO of Flexibility, Argentine developer of solutions for digital banking and embedded finance, analyzes what the year will be like for fintech companies
We know the fintech ecosystem was one of the most dynamic of the Argentine economy in 2021, and which is still taking off.
Already entering 2022 it is possible to analyze how what already works will continue, what problems can grow and strengthen and that may decrease in intensity.
The pandemic effect Era significant in this industry. To cite an example, in 2021 the use from virtual wallets have grown in a 340% compared to 2020according to the last Report on the use of electronic money of the Network connection.
Growth came from exogenous elementnot disruptive: there is no product that has taken advantage of the increase.
When it comes to embedded finance, Latin America will be the region with the most opportunities in the world for this type of market.
This is why we have a low penetration of the service banked, low access to banking products per se, but high technology adoption and consumption of other services.
If this population is reached through financial services and through the usual channels of consumption, it will add a lot to the financial market.
let’s see the clear trend of companies of traditional objects that already are digitized and in recent years they have entered a process of disruption, trying to connect with financial services.
The penetration of the usability of cryptocurrencies into daily life is another important topic. Payment issues will grow through crypto channels, likely with the experiences of other players, as is the case with incorporated financeespecially in Argentina.
While it costs a lot more for the traditional bank to adopt a cryptocurrency investment product, if a retail company builds their own wallet, they won’t have so much trouble remunerating users for using their wallet with a crypto model. If we lose our fear, there is a lot to learn.
Insurtech will continue to grow constantly and to bet on the path of digitalization. H.There is an evolution from traditional insurance a technical insurance.
Unlike what happened with the banka, this industry is not disruptive in the launch of different products, however, it is on the road to transforming traditional insurance.
Until Paymentsusually there is room to grow. We have yet to see how everything will eventually fit in 3.0 and PSP transfers. The traction in this segment was given by the pandemic, which broke the inertia.
After, growth will happen adoption and increased penetration. It is a subject on which there is no turning back. The classic example related to this topic is that of the SUBE card, which was difficult to implement but then no one wanted to see a coin to travel with.
In open bank there will also be progress this year. The social demand that will fall on traditional banks will be a market demand.
Those who adapt to provide better service and partner with companies that want to leverage the penetration they already have to go with their customers in these ecosystems will eventually win.
They will go towards a model of open bankperhaps not as regulated, egalitarian or super distributed but they will be the ones who will have access to products. And also to conquer the field of embedded finance, where financial services will be in the next few years.
Finally, the question of regulation is worth thinking about. It is always helpful for the rules to be clear.
But it must be taken into account that these are not short-term regulations that disrupt business in the long term.
In this case, the rondine activities will appear, in which little is invested because it is not known how long they will last, and then they will go away. If it is necessary to touch a part linked to systemic risk, it must be evaluated but not held back overnight and a 180 degree turn in the way the business model is structured.
* By Pablo Ces, CEO of Flexibility