Ricardo Josua, Co-Founder and CEO at Pismo, took the stage at the Fintech Americas conference this Tuesday with Carlos Medeiros, an Investment Partner at Softbank Group International. The two keynote speakers discussed the future of banks in a panel called “Digital banking: Is Analog Really Over?”
Ricardo Josua started the debate by asking the question that names the panel: “We have seen a shift to digital banking for several years now. Before the pandemic, most banks already had at least a ‘brick and click’ approach, combining analogue and digital. And the pandemic accelerated this digitisation. Do you believe that analogue is dead and digital is a new reality?”
Carlos Medeiros mentions evidence that the digitisation of banks is happening at a fast pace: “About two thousand bank branches were closed in Latin America in the last 12 months.” He adds that the number of banks that already operate digitally is very significant. “Does this mean that banks are dead and fintechs will dominate everything? The answer to this question is way more complex,” he says.
According to Medeiros, banks have several advantages comparing to fintechs, including long-term relationships with their customers, the breadth of products to serve them and the ability to offer more extensive credit lines. Fintechs, on the other hand, have been innovating mainly in the user experience, but many of them struggle to become profitable.
Three kinds of digital banks
Ricardo classifies Pismo clients into three different groups regarding digitisation. The first one comprises native digital players, like the German-headquartered bank N26. These players usually focus first on the customer experience, but they are increasingly looking at the core banking system to acquire technological advantages. “For them, it’s natural to adopt an API-based solution. Their developers know this technology. So it’s easy to integrate with them,” he says.
In the second group, we find established financial institutions adopting new technologies to replace legacy systems, like Itaú, the largest bank in Latin America. These banks have many more products and integrations than the native digital ones. So every new system that they implement must interface with the existing ones.
According to Ricardo, “the third and perhaps the most interesting situation is when we have established players launching challenger initiatives with new infrastructure. One good example is BTG Pactual, the largest investment bank in Latin America.” BTG Pactual has built a complete and innovative digital bank based on the Pismo platform. “Since it started from scratch, it isn’t constrained by existing infrastructure,” says Ricardo.
Medeiros, however, has a different view on this third case: “BTG Pactual didn’t start from scratch. They started from Pismo,” he says. His comment highlights that BTG Pactual can focus on the user experience while Pismo does all the back-end processing for the retail bank.
A conference for leaders
Fintech Americas 2022 is taking place at the Fontainebleau Hotel in Miami Beach, Florida. The conference congregates Latin American financial services leaders to discuss business opportunities and the future of the financial industry.
Pismo is an exhibitor and sponsor at Fintech Americas Miami 2022. We are glad to show attendees how we help fintechs, banks, and non-financial institutions offer their customers best-in-class financial products across the globe.
If you are participating in Fintech Americas, come to meet us at our booth and learn about our innovative cloud-native platform for banking and payments. Also, hydrate yourself with coconut water at Pismo’s stall on the terrace.