One of the sectors that has recently become known for its growth is financial technology companies. Cointelegraph in Spanish spoke with Erick Rincón Cardenas, President of the Colombia Fintech Association and associate professor at the Universidad del Rosario, to learn more about his perspective on this ecosystem that has brought about changes in the financial world.
Fernando Quirós (FQ): How did you get into the world of financial technologies?
Erick Rincón Cárdenas (ERC): My first professional experience when I was still studying at university was in a bank. I liked the financial subject very much, and when I finished my undergraduate studies, I enrolled for a specialization in finance law. In other words, my first approach was academic. Later, over the years, I advised on the legal design of various financial products electronically for various credit institutions and more recently for fintech companies.
I have worked a lot on the immaterialization of linking processes, the creation of products and services and the issuing of guarantees. I firmly believe that the virtualization of processes and documents in the industry offers the opportunity to ensure adequate financial inclusion.
FQ: Do you think fintech companies are changing the financial ecosystem worldwide? Why?
ERC: Of course, fintech is definitely revolutionizing the world. The industry is proposing a disruptive model that offers innovation, technology and efficient service delivery as added value while always thinking about the user experience – simple, agile.
Coverage of the fintech industry promotes financial inclusion, and various segments have been developed, including digital payments, digital loans, electronic invoice and title negotiation, blockchain and crypto assets.
Of course, fintech is revolutionizing the world. It is an industry that proposes a disruptive model that offers the added value of generating financial solutions that entrepreneurs, small businesses, and individuals like:
The management of credit resources through fully electronic means with flexible requirements.
Digital payment solutions to make purchases from the comfort of your home.
Creation of virtual wallets for handling money from there, which can also be accessed by people without bank details in order to generate financial inclusion.
Crowdfunding solutions that have now positioned themselves to raise money for social purposes, and in fact there are already several examples that support certain economic sectors.
Finally, one message needs to be emphasized: Fintech solutions manage to serve the under-banked population, and for this we have proven solutions with more than four million digital loans granted and the distribution of resources through wallets, digital and electronic wallets.
FQ: Which areas of society are most interested in working with fintech?
ERC: Before all of this happened, we were present in very distinct sectors. With the arrival of Covid 19, however, many companies in the country found an important ally in Fintech for the conduct of their business. I think this will remain so for a long time, the reception from individuals and companies has been very positive, the post pandemic will continue to bring many benefits to the sector.
Undoubtedly, the population that can best use fintech is the under or under bank that has no access to traditional financial services.
FQ: Do you think fintech is a fad or solves problems?
ERC: They are not a fashion. Fintech companies have revolutionized the world with alternative financing, and it will remain the same as it is with digital loans, crowdfunding, and of course electronic billing and securities negotiation. Fintech companies complement traditional services and in this sense are not a simple trend, but a real phenomenon of inclusion. On the other hand, fintech was always the solution to problems, which was shown during the pandemic.
We have a clear example of how digital payment companies have become strong allies with the national government to help Colombians. The same thing happens in the area of digital loans. Many entrepreneurs will be able to get relief for their companies through the alternative financing of fintech, also through donation crowdfunding. Initiatives were supported to help the most vulnerable populations.
The fintech industry was born in response to the following:
There is a population that needs credit resources that do not meet certain traditional requirements and the filters do not pass the validation process.
The era of digital transformation has definitely created the possibility of several new business models, and this is clearly the case with fintech companies that provide financial services through technology.
CF: What is the fintech ecosystem like in Colombia today? Have you been affected by the Covid 19 crisis?
ERC: There is no doubt that the arrival of the covid 19 is a major challenge for fintech companies. However, it is important to emphasize that we acted quickly to reinvent ourselves, relieve existing customers and open the door to new users who need our support. We are teamwork, so we started discussions with the national government to find a solution, get support and provide our services in the shortest possible time to deal with this situation as best as possible.
Before the pandemic, it was found that 76% of Colombia’s digitally active population used fintech services. In a limited state, the appropriation of these solutions tends to increase, as they enable strategic channels to be used by technology and avoid displacement and physical money for the population with and without bank accounts.
Fintech is part of the solution, and we are coordinating efforts with the government, the bank, and other actors to provide liquidity to those who need it so badly.
Q: How would you describe what Colombia fintech is?
ERIC: We are the association of fintech companies in Colombia founded in December 2016 with the common goal of creating a dynamic ecosystem of talent, capital and acceptance for the development of fintech companies in this country. Today we have more than 240 affiliated members and support from key financial and national government agencies. In just two years, we have established ourselves as a representative union for the technology and financial innovation industry in Colombia and as one of the most active fintech communities in Latin America. It should also be noted that Colombia is the third fintech economy in Latin America after Brazil and Mexico, according to an IDB study from 2019.
CF What activities do they do?
ERC: The union’s primary role is to speak to the government and international organizations about the sector and highlight their challenges. Contribute to various bills and public policy. We always strive for entrepreneurs to have a voice through us, and that is why we have different channels of interaction with members.
We also coordinate and generate actions that promote a fintech public policy and improve the legal framework that enables our industry.
In addition, we bring our members knowledge through various workshops and weekly webinars on hard and soft topics that promote innovation processes.
We generate overarching dialogues across six (6) work tables assigned to fintech sub-sectors and three (3) transverse work tables on topics such as open banking, digital identity and legal tech.
We have digital resources for our membership community through which we communicate our union activities. We also give our entrepreneurs a voice to communicate their messages.
We have our own brand event called LATAM FINTECH MARKET, which consists of a trade fair, an academic agenda and a business conference. We had the first edition in 2019. We are strategically planning the second version in light of the development of the pandemic.
CF: Are changes with new technologies very quick?
ERC: The fintech ecosystem is responsive to meet the challenges posed by the pandemic crisis. With fintech, we can develop the transformation and digitization that our society needs, with innovative solutions and high added value. It should also be noted that we are a digital financial inclusion.
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