Banks, the key to their growth could be the fintech

The myth that traditional fintechs and banks are not compatible has begun to fade.

After a lapse of time when both types of financial institutions were perceived as opposing, a common language was defined and " concludes that collaboration is not only possible, but urgent" ] ", Says the study" A path of double meaning. "The cooperation of financial institutions and fintechs in Latin America.

" Large financial institutions – dinosaurs – need fintechs – unicorns – to identify innovations that promise to have a significant impact in the industry ," reads in paper prepared by Startupbootcamp, IPADE and Ernst & Young (EY).

A large bank is attributed, according to the study, a lack of resilience to the technological asteroid "because of its slow pace to implement changes in its operation, the Inflexibility of its processes and its risk aversion of decision-makers ".

Banks could find in startups the opportunity to increase their customer satisfaction one of their weaknesses, says Iñaki Aldonza, the main partner of EY's financial sector. This through adoption of technologies used by fintech like personal finance management via algorithms, a more efficient payment system and security mechanisms, such as biometrics.

" Fintechs are, to a large extent, institutions that integrate with banks to provide better products, added value and generate a new value proposition for their clients . Hence the importance of an effective interaction between fintechs and the financial system, "says Álvaro Rodríguez Arregui, founder and managing partner of IGIN, in document [19659007] presented this Friday.

In the DNA of banks effectively manages the accounts and approves the credits. They have a strong technological structure but, as explained, they are slow to take advantage of emerging technologies that offer substantial operational efficiencies and with which they could improve the experience of their customers.

"The DNA of the bank is to be a bank, approve the credits and deliver them to customers. In general, they do not think about technology, what It's not their heart "says Sergio Furio, founder of the Brazilian startup Creditas.

The collaboration between startups and traditional financial entities can be achieved in different ways: Fintech can be technology providers, banks can inject capital into companies in exchange for technological services or even Acquire some of them.

In this last option, explained the partner of EY, it will be necessary that the startups are not completely part of the structure of the bank, because they risk to slow down their innovation.

The Fintech law stipulates that financial entities must obtain the authorization of the National Banking and Securities Commission to participate in the capital stock of financial companies . Banks, dictate regulation, must use channels of staff and promotion different from those of their main operations.