The appearance of more fintech entities in Latin America as in the rest of the world will mean that they will be absorbed in a period of five years by the banks, resulting in: the bantech, estimates Sebastián Ponceliz, CEO of Odyssey Group.
“What is going to happen is that the fintech will merge with the bank, so the bantech will be created,” says Ponceliz.
With the merger between banks and Fintech, the Bantech will be specialized concepts in home banking, ATMs, or financial services in industries such as the automotive industry or real estate mortgages, according to the CEO of Odyssey Group. However, consider that banks already have their own fintech, since home baking is a tool of this type.
One element to take into account is that regulatory standards are behind technological advances. “In general, regulation does not respond to technological growth,” he adds.
Regarding the idea that cash will disappear, Ponceliz points out that this will hardly happen in the short term, because there are data in the market that show that people will continue to use cash.
The Federal Reserve Bank of the United States between 2006-2016 doubled the printing of money, while in Germany 85% of transactions were effective. 45% of transactions under $ 25 are in cash on US soil. “What happens is that there is a process of economic convergence there is much more cash and digital tools,” he says.
Fintech, keys in Latin America
The Fintech world begins to grow based on the structure of digital currencies and regulated financial services, and the need for more agile financial services markets, the executive points out.
“Fintech are those organizations that do not have enough backing to become banks. They do not have the regulatory capacity to be a bank, “he explains.
In Latin America there are around 1,166 Fintech ventures, which reflected a 66% growth since the first measurement last year, according to the Inter-American Development Bank (IDB).
In its fintech report in Latin America 2018: growth and consolidation, the IDB explains that two out of every three ventures are in advanced stages of development, and that fintech activity has increased to 18 countries in the last year.
“Although five countries account for 86% of fintech companies in the region, ventures have been identified in each of the Latin American countries and a growing trend towards internationalization,” he points out.
Brazil has 380 Fintech projects, consolidating its position as the number one country in the region, followed by Mexico with 273, Colombia with third place with 148, Argentina with 116 and Chile with 84, according to the IDB report.