The Future is Collaborative: The New Path Banks and Fintechs Are Taking in Latin America

Published by Fintech Americas on Jun 5, 2024

Discover the perspectives of leading Latin American banking executives on the current state of collaboration between traditional banks and fintechs.

From Fintech Americas’ perspective, we recognize the intrinsic and transformative relationship that exists between fintechs and traditional banking and financial services. As fintechs have matured, all participants in the ecosystem have come to value and appreciate collaboration, while still maintaining a competitive edge. This love/hate relationship — being collaborators and competitors at the same time — has brought significant benefits to the sector.

Deloitte observes that financial institutions are more inclined to collaborate with fintechs than compete against them, although they often struggle to interact effectively with the fintech world, which is faster-paced and less structured. This highlights the need for traditional banks to adapt to the agile, innovation-driven culture of fintech companies.

Meanwhile, Gartner’s findings reveal that 62% of banks consider developing new products and services in collaboration with fintech operators a high priority. Additionally, 42% place high priority on collaborating with non-banking startups to introduce new services. This trend indicates a shift toward more open and collaborative models within the financial sector.

It is also important to note that McKinsey projects fintech industry revenues will grow nearly three times faster than those of the traditional banking sector between 2023 and 2028. This rapid growth underscores the increasing influence of fintechs and the vital role they play in shaping the future of finance.

It is clear that the synergy between fintechs and traditional banking is not just about competition; it is about forging new paths for innovation and collaboration that benefit the entire financial ecosystem. As these sectors continue to intertwine, the potential for growth and transformation in banking and finance will be limitless.

To gain deeper insight into the current and future outlook on this decisive topic from within the financial industry, Fintech Americas consulted leaders from some of the most important institutions in the region. Below, we share their perspectives and insights.

Martín Bravo, Director, Deloitte (Mexico)

From Martín’s point of view, “without a doubt, the main opportunity for banks in 2024 is continuing to find ways to reinvent themselves; they must focus on developing more and better products. There are new competitors entering the market, and more continue to emerge. At the same time, new generations and their values demand highly digitalized products and services — products that can be personalized to individual needs.

Speaking about coopetition, banks must seek new partnerships with companies within the sector and across other industries in order to serve new markets through truly disruptive products. A traditional bank’s main competition is no longer another traditional bank.

However, current challenges remain in terms of information security and regulation. Banks must work jointly with regulatory bodies to accelerate new policies that increase competition and innovation, while maintaining a strong focus on security and compliance with local regulations.”

Learn more about Martín’s perspective on Coopetition, Industry X, and Industry Convergence here.

Fernando Velázquez, CTO Digital Transformation & Innovation Director, Walmart (Mexico)

Fernando believes that “today, fintechs have experienced significant growth worldwide, and their evolution within the Latin American market has been remarkable.

One of the key phenomena that has emerged is ‘coopetition’ between fintechs and traditional financial institutions. Instead of competing directly, both sides collaborate in certain areas to leverage their respective strengths. This dynamic has led to greater efficiency in delivering financial services and has encouraged innovation across the region.

Over the next three years, fintechs will focus on agility, technological innovation, and service personalization, leveraging Artificial Intelligence and data analytics. Traditional banks will strive to modernize their platforms, improve customer experience, and establish strategic partnerships with fintechs in order to remain competitive in a constantly evolving financial environment, where collaboration and advanced technology will be critical to success.”

Learn more about Fernando’s perspective on Coopetition, Industry X, and Industry Convergence here.

Denisse Cuellar, Open Innovation Leader, Banco de Crédito del Perú (Peru)

Denisse believes that “there has been growth in industry convergence, as we are seeing more companies from different sectors offering financial products. This has been made possible through partnerships with fintechs.

At the same time, this year has also been marked by the growth of Embedded Finance and new business models built around open APIs. Banks have developed open APIs to offer their products within the customer journeys of other industries — such as e-commerce, healthcare, gas stations, among others — leveraging them as new distribution channels. Banks have identified new revenue streams by offering financial services to other sectors.

In terms of coopetition, some countries are already experiencing significant collaboration between banks in support of cybersecurity, where financial institutions come together to share information about attacks and develop joint defense strategies. Likewise, the push for regulatory Open Banking, driven by regulators, has encouraged coopetition, as seen in cases such as Brazil, where technology teams from different banks have collaborated to ensure the secure transfer of information between institutions.”

Learn more about Denisse’s perspective on Coopetition, Industry X, and Industry Convergence here.

Dive Deeper into Coopetition, Industry X, Industry Convergence, and Other Key Banking Topics

In an ecosystem that is constantly changing — with customers and employees who have new needs and expectations, and emerging technologies that until recently seemed impossible — the financial industry in Latin America faces a decisive year in which the ability to adapt strategically will be crucial to the growth of every institution.

To help you better understand what is happening and how to prepare your adaptive journey, Fintech Americas has developed a document that brings together insights from more than 40 banking leaders from different countries across the region.

Download it now and gain exclusive access to:

• Predictions, challenges, and opportunities for 2024 in crucial categories such as AI, Leadership, Adaptation, Digital Payments, Financial Inclusion, Organizational Culture, Cybersecurity, and more.
• Real-world experiences and perspectives from recognized leaders at Citi (LatAm), Bancolombia (Colombia), Santander (Mexico), Grupo Promerica (LatAm), Banistmo (Panama), Pichincha (Ecuador), Scotiabank (Costa Rica), BCI (Chile), Bantrab (Guatemala), and many more.

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