Juan José Piano, deputy general manager of Banco Piano, started the exhibition minimizing the supposed tension between traditional and digital banking. “Many times there is talk of confrontation and a very large competition or rivalry is seen, but with the fund where we participate with other banks we execute the idea that we are a complete one to reach people”, he said during a meeting organized by the Chamber of Argentine-German Industry and Commerce (AHK Argentina).
Many opportunities…
According to the executive, currently responsible for operations of the historic bank, in Argentina there are many opportunities for the development of fintech, although there are limitations. “The market is quite immature, the situation does not help, but there are options to improve and have synergy of entrepreneurs who can innovate entities from outside”, he said.
“Sometimes it is difficult to understand the reality of banks, which are slow, have problems of customer service, but are cushions of the economy. It is very difficult to move quickly and meet all the rules and requirements. This systemic risk makes it difficult to be fast and agile and innovation from the outside is necessary”, he completed.
Traditional vs fintech
Friedlhelm Schmitt, CEO & co-funder of Fincite Ventures, proposed to look in detail at what traditional entities lack to offer concrete solutions. “It’s not that banks don’t want to innovate. It has a lot of smart people working. They read the same books and listen to the same podcast. But they have very old systems and occupy 80% of the IT investment in maintaining what they have and only 20% go to innovation or try to try new things. The key is to understand not only the problem of the end user, but of the bank, ”said the German, in a Spanish fluid.
For Schmitt, financial technology ventures are the key to the future. “Today, running a bank makes you 50% a criminal because there are so many rules, rules, laws, that if you make a mistake, you go to jail. That’s why fintech offers solutions that help avoid jail and take prisoners”, he compared wryly.
Cristian Elbert, founder of the Klimber insurtech and partner of the Elzen law firm, focused on regulatory frameworks. “It was wise not to intervene in the fintech market and let it grow, despite its difficulties, because if you carry it with regulations it is like killing the outbreak before it grows,” said Elbert, a member of the event sponsoring study. “Argentina is a very fertile place in terms of production, human capital, ideas, great teams, although they are quite alone”, he added.
To avoid this loneliness is that the AHK launched a contest between local startups to provide assistance and support in the landing of Argentines in the state of Hessen, whose capital is the city of Frankfort, one of the most important financial centers in the world. The competition was called “Demo Day Fintech AHK” and sought to boost Argentine exports fintech to Germany. In Hessen there are more than 200 German and foreign banks, while Frankfurt concentrates more than 90% of the German exchange market. The competitors were HNT Bank, LemonCash, Patagon, Ocean Waves Finances, Rebill and Lemex.
Attorney Elbert agreed that there should be synergy between fintech and banks. “There is not much contest, none will want to compete. There are solutions that work together”. he stressed.
The importance of good investments
Piano said Arfintech, the investment fund made up of eight Argentine banks and co-managed by NXTP, has already invested US $ 3 million in different long-term projects. “The results are not yet concrete, they are long processes, with particular agreements between the eight banks and startups. Some move faster and others slower. Fintech complements, we have a symbiotic effect to add value to the bank, ”he said. Some of the startups that Banco Piano and its partners trusted were Increase, 123Seguro, Rapifactura, Signature, Koibanx, VU and Zolvers.
In Germany the numbers are other. According to Schmitt, last year € 4.6 billion was invested, of which € 700 million went to fintech. “Investments in new models have fallen and are only 10%, while the remaining 90% finance existing companies, which try to digitize the operational models of the financial industry”.
Elbert said the German market is hyper-regulated, they are very rigorous with public finance management and there is more data awareness. “There are huge initiatives that could have the support of Germany and there are very good Argentine ideas that could have roots there”, he said.
The lawyer said that although both countries are not so different in terms of financial environments, it is not possible to “tropicalize” a startup from Argentina to the Old Continent. “It is not possible to develop it here, translate it and implement it there, that will not happen. Adaptation changes the product, there are different margins, different regulatory impacts, but the idea and philosophy can be applied there”, he said.
In that line, Schmitt highlighted the “raw material” of Latin America and recalled that Fincite Ventures, the fintech TOP 3 of Germany, has a development center in Peru. “The talent we see here is incredible, not only in Argentina, it is a heritage of the region,” he stressed, and deepened the comparisons between models. “Access to the financial system is a big problem in Argentina, but it is not in Europe. Opening an account, making payments, transfers are not a problem, but it is very expensive to access financial advice (you must own between € 500,000 and € 750,000) and labor is very expensive. Here there are many virtual wallets and payment platforms, but in Europe that is not necessary”, he added.
The challenges for the fintech industry under the Swiss look
Elbert added that in our country half of the population is not banked. “Problems are opportunities, fintech must convey innovative ways to bring solutions to people”, he said.
Piano lamented the complications arising from the economic crisis of recent years, but encouraged the audience not to lower their arms. “Many companies had plans and had to postpone them, but you don’t have to give up the search for opportunities between fintech and banks”, he said.
The AHK contest was won by LemonCash, a virtual wallet that allows you to make payments, operate with bitcoins, access financial services and build loyalty for businesses and users with discounts and benefit plans.
Also published on Medium.