Finnosummit: Discovering the future of Fintech in Latin America

Finnosummit: Discovering the future of Fintech in Latin America

Finnosummit 2023 was the vibrant fintech event that reunited pioneers and experts congregated to explore the financial future of Latin America, where Ferter had a active participation on both event days. Our team took full advantage of this golden opportunity to network with industry leaders, absorb the innovative pitches of startups, and engage in illuminating conferences and panels hosted by distinguished analysts.

If you're curious to find out more about the exciting developments and trends unveiled at the event, we invite you to delve deeper into our coverage to discover the insights that are shaping the future of finance.

Global and Local Fintech Trends

In the opening ceremony, Vanessa Colella, Head of Innovation and Digital Alliances at Visa, shared her vision on the global trends that are impacting Latin America in the Fintech world and data that was collected in the last year.The topic of the moment could not go unmentioned, in recent years Artificial Intelligence (AI) has grown in importance and is now considered a fundamental part of the financial industry. Its application in companies has been diverse, from productivity improvements, fraud prevention to enriching the customer experience.Large technology companies offering Integrated Finance and Digital Wallets have registered around 15,000 patents in the field of artificial intelligence, clearly there is a strong appetite for these companies to identify signals and opportunities in this area and they are expected to continue to expand in this area.Based on data compiled by Visa, Colella indicated that technology companies have a market value of $8.5 billion and spend 23% of their resources on research and development.  It was found that these same companies are directing their focus towards sectors such as health and financial services, due to this a significant improvement in customer experience is expected thanks to the innovation that these companies are introducing in consumer expectations.One of the objectives of companies focused on providing financial services is to make loans more accessible to the population. However, despite expectations, funding from fintech companies has decreased by 60%.Colella emphasized the importance of helping the most promising companies to grow, recalling that many of the most famous companies had their start in difficult times like the current ones and that change takes time. Despite macroeconomic conditions and uncertainty, there is a tenacious and optimistic attitude towards the entrepreneurial environment in Mexico.

VC and Innovation in the Current Landscape

Natalia Gonzalez Vela, CEO of La Neta del VC, addressed several topics related to Venture Capital (VC) and innovation in the regional and global context.Knowing how to make a good investment requires a lot of observation and analysis, especially for first-time investors. In this regard, Natalia began by defining an important concept: regional applicability. She emphasized the importance of considering regional particularities when entering the venture capital world. Each market has its own dynamics and regulations, so it is essential to adapt and understand the local environment.It is easy to be dazzled by technology products, but Natalia pointed out that having technology is only part of a company's success. The key is to find the Product-Market-Fit (PMF) and achieve market adoption. This involves not only building a product, but also integrating it effectively into the market and making changes in user behavior so that they adopt the product.The most successful companies often find a specific use case, develop it for a particular audience and in a particular space. This precise focus can be critical to product growth and adoption. Using technology in a way that its initial application has the potential to span other spaces or industries is what opens up new opportunities for growth. If a company is seen to have this potential and specific direction, it will almost certainly be a promising investment.Fintech technologies are not only exclusively applicable to financial services companies. Natalia mentioned the case of a project called Agrotoken in Argentina, which uses blockchain technology to allow farmers to monetize their crops. This example illustrates how technology can be innovatively applied in traditional sectors.Other points she addressed that she considers important to support the development of these technologies are strategic alliances and the support of important players. An example of this has been Visa, which has become a key player in promoting entrepreneurs in the fintech sector.But these supports must be provided with trust as a foundation, since trust is fundamental in the world of VCs and startups. Generating positive customer experiences is the most effective way to build that good relationship with the market. It has been seen that innovation can happen anywhere, even during a pandemic, and it is essential to be open to identify opportunities, taking into account these key points.

Read to Lead: Live Analysis Session

Fabrice Serfati, Manager Director at IGNIA Fund, led a panel discussion of the book "Good to Great: Why Some Companies Make the Leap and Others Don't".The discussion focused on key aspects of leadership, team building and organizational culture, as well as the pursuit of excellence and the importance of separating personal ego from company success, here are some key points:

• Level Five Leadership: discussed the importance of leadership that is not focused on personal ego, but on the cause being built. The focus should be on "What am I building and why am I doing it?" and on the vision of the company.
• The Founder as Talent Attractor: It was emphasized that the founder plays a key role in attracting people to his team and in building leadership in the organization.
• Open and Direct Communication: The importance of strong and direct communication and the creation of spaces where the team can express their concerns and suggestions was emphasized.
• The Obstacle to Being "Great" is Being "Good": It was discussed that the great obstacle for companies to grow is to be satisfied with being "good". A leader focused on perfection and the long term, rather than the short term, is essential.
• Early Focus on the Team: In the early stages of a company, it is critical to ensure that each person who joins the team contributes in a positive way.
• Aptitude vs. Attitude in Hiring: When adding people to the team, it is important to assess attitude and align it with the company's values, sometimes even more so than aptitude or experience. Hiring the right person is crucial to avoid wasting time motivating someone who does not fit the organization.
• Key Needs for Success: Three key elements were mentioned: being the best at what you do compared to the competition, identifying where the margins are, and focusing on passion.
• Technology as an Accelerator: The question was raised as to whether technology should be viewed as an accelerator, and how it can be used to drive business growth.

Financial Inclusion in Mexico: Challenges and Opportunities

In a roundtable that brought together leaders from three unicorn companies that have played a key role in the development of the financial industry in Mexico, critical issues related to financial inclusion in the country were addressed. The participants in this discussion were Ivan Canales, CEO of Nu Mexico; Myriam Cosío, Director of External Affairs at Clip; and Pedro Rivas, CEO of Mercado Pago.Below are the highlights of this conversation that sheds light on the challenges and opportunities Mexico faces in terms of financial inclusion.The National Financial Inclusion Survey (ENIF) reveals shocking figures that illustrate the current state of financial inclusion in Mexico. Only 56% of the population has a bank account, in contrast to 80% in Brazil. Furthermore, only 11% of Mexicans have access to a formal bank credit card, compared to 25% in Colombia. Barely half of the Mexican population has formal savings products, and a minority receive an adequate return on their savings.Pedro Rivas stressed that Mexico is lagging behind in terms of financial inclusion compared to other countries in the region, such as Brazil, Colombia and Argentina. In the case of small and medium-sized enterprises (SMEs), Mexico has only a third of the payment terminals available in Brazil. Despite the challenges, there has been significant progress in electronic payments in Mexico. In 2014, only 10% of transactions were electronic. Today, there are 2 million merchants accepting electronic payments in the country, which has moved Mexico to ninth place globally in electronic payment penetration.One of the most pressing challenges is the lack of offer and the need to foster competition in financial products. The big players dominate 80% of the market, indicating that there is ample room for improvement in supply, and company leaders shared their approaches to achieving greater financial inclusion:

• Pedro Rivas seeks to democratize financial services, make them accessible and simple for anyone on the street, and highlights the importance of security, investment in engineering, and building an easy-to-understand experience in minutes.
• Myriam Cosío puts the focus on the customer, simplifying product procurement and focusing on trust and financial education.
• Ivan Canales advocates developing specific products for the sector in which they operate and providing tools and financial education.

Balanced regulation between security and innovation was presented as a crucial issue. The importance of competition and the need for flexible regulations to foster financial innovation was highlighted.Despite progress, there are challenges in terms of access, especially in the informal market, which represents 85% of merchants that previously only accepted cash. Education and reasons to adopt electronic payments are seen as solutions. Financial inclusion is seen as a key driver for improving quality of life and economic growth in Mexico, and electronic payments are a key starting point.

Winners of the Finnosummit Challenge 2023

Mexican startup Nauphilus won first place in the 'FINNOSUMMIT Challenge, Artificial Intelligence in Fintech,' organized in collaboration with Google Cloud. Its innovative solution is based on the use of artificial intelligence, including deep neural networks, to analyze data and generate credit scores, which represents an important advance in the promotion of financial inclusion and the standardization of credit evaluation processes.In second place, we find the Mexican startup Zumma, which also makes use of artificial intelligence to provide guidance to users in making smart financial decisions.Finally, in third place was the U.S.-based QUASH.ai, whose platform is designed to help financial institutions assess the profitability of their credit predictions and increase credit granting without increasing risk. These awards underscore the growing importance of artificial intelligence in the fintech sector and its ability to transform and improve financial services.

Finnosummit 2023 was an eye-opening event that shed light on the exciting future of fintech in Latin America. Attendance at these events emerges as a strategic investment for both seasoned professionals and financial technology enthusiasts. These gatherings allow us to keep up to date with the latest trends, make connections and discover opportunities for collaboration.

The event provided us with a comprehensive industry perspective and facilitated access to experts and thought leaders. Ultimately, these gatherings not only keep participants on the path to success in the world of digital finance, but also inspire them to become an active part of the fintech revolution, contributing to the creation of a more innovative and accessible financial future for all.

Thanks for reading this far, expect more updates from Ferter at upcoming events!