BUSINESS INSIDER | Mexico

The pandemic was a major disruption point for banks – tech projects are accelerated in months, when it used to take years, assures Infocorp.

-Banks are speeding up the adoption of technology projects to compete and accelerate their transformation in just a few months.

-Infocorp, a leading financial systems software company, says that speed will be crucial in this era of digital transformation.

-This is because even retail companies are getting into the financial services game to leverage data on the consumption pulse of their customers.

The pandemic marked a point of disruption for the banking industry. Now this sector has to transform itself with high-tech projects to bring new products to its customers in months when it used to take years. This can be achieved as long as they are developed with the right strategy, noted Gerardo Pizarro, head of regional business development at Infocorp.

He states in an interview for Business Insider Mexico that «We have been working for some time on the issue of digital payments through CoDi. It is something that will be extremely difficult to implement in this population, currently not included in the financial system».

«However, we see that, little by little, if we have the right tools with software architecture, digital experience; with something that really makes sense and is worthwhile, people start to see what it means [CoDi] and most importantly [they start] to try it out», he added.

CoDi is a system that relies on payments via QR that the Bank of Mexico (Banxico) launched in September of 2019. The company Sistema de Transferencias y Pagos (STP) recently announced that in addition to banks and fintechs, large retail chains are preparing to implement it. As such, it is expected to become a large-scale payment method that will require software development.

Pizarro indicated that after the pandemic, technological advances are progressing «not at the pace we would like, but they are happening». He explained that companies seeking to develop new software-based technology are dependent on their partners. Another essential factor is the type of user experience they can offer, but above all the «quickness to switch products and adapt to services that you don’t have today».

According to Infocorp, the pandemic changed the paradigm of the rate at which this evolution has to take place in the financial system. In Mexico, the Fintech Law passed in 2018, so there is now a notable surge in the number of technology companies offering financial services in the country.

For example, Infocorp, of Uruguayan origin, will allocate more than US$1 million to research and development in 2021, with the aim of accelerating the digital transformation in Mexico.

«We see great potential in developing personalized forms of communication in the financial system», said Héctor Deambrosi, sales manager for Latam at Infocorp, in an interview. «We think that banks are used to their own banking jargon, and people do not speak this banking language».

For this reason, he indicated that one of the priorities of banks and financial institutions is to develop a more customer-friendly and informative approach to their products.

Mexico’s fintech «boom» is also due to the data revolution

Deambrosi explained that many of the new financial products currently on the market are from companies that want to enter the sector, due to the high potential of their customers’ data. This is the case of delivery companies -such as Rappi- that have an excellent know-how of consumer habits.

«We shouldn’t just take Walmart as an example. There are many companies in Mexico that come from retail, like Coppel or Elektra. Even a delivery company suddenly discovers that it has a large volume of people paying on its platform», said Deambrosi.

These are entities that were not banks and that take advantage of offering credit products to maintain cash flow within their own system. Suddenly, the use of all this data presents them with the opportunity to enter the financial sector and offer fintech products in competition with traditional banks.

Full article: businessinsider.mx/pandemia-punto-disrupcion-banca