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Banco Azteca: Crypto Innovation With the Customer at the Center

Published by Fintech Americas on Jul 25, 2023

Discover how Banco Azteca is leading innovation in financial services across Latin America with its retail foreign exchange project.

Exclusive interview with Humberto San Juan Sosa, Director of Foreign Exchange and Crypto Projects at Banco Azteca (Mexico), winner of the 2023 Platinum Disrupt Award.

Innovation in Latin America’s financial services sector is advancing more powerfully than ever.

We live in a region rich in creativity, where both banks and fintechs demonstrate remarkable adaptability to changing markets, regulations, customer demands and expectations, as well as the constant emergence of new technologies.

The pursuit of positive impact is a defining characteristic of the region, and the results range from improved customer experiences to increasing levels of financial inclusion year after year.

At Fintech Americas, we understand the critical role innovation plays in the development of the financial industry and its ability to strengthen society. That is why, for the past eight years, we have honored innovation through the Financial Innovators of the Americas Awards — an initiative that recognizes the most disruptive leaders, teams, and institutions that are breaking barriers, challenging established norms, and delivering revolutionary financial solutions.

Among all the 2023 Country Award winners, the project with the highest overall score received the highest innovation distinction a bank can earn in Latin America: the Platinum Disrupt Award.

This year’s winner was Humberto San Juan Sosa (Director of Foreign Exchange and Crypto Projects) and his team at Banco Azteca, Mexico, for the project “Retail Foreign Exchange,” which also won the Platinum Country Award for Mexico.

Humberto is a financial industry professional with extensive experience who has spent the last eighteen years at Banco Azteca, always working within the payments ecosystem and, more recently, blockchain technologies.

In this exclusive interview, he shares the most important aspects of the project, explains the disruptive role blockchain played in the initiative, offers advice for fostering innovation across the region, and much more.

How and why was the “Retail Foreign Exchange” project created, and what problem was it designed to solve?

Honestly, it’s a complex project that needs some context to fully understand.

In Mexico, we have a large volume of U.S. dollars circulating, mainly coming from three sources.

The first is tourism. Visitors come to our tourist destinations and pay for products or services in dollars, or they leave tips in dollars.

The second is cross-border commerce. Imagine someone living in Tijuana but working in San Diego. That person earns income in dollars but spends their household budget in pesos in Mexico.

And the third is remittances. Mexico is a major international remittance corridor, especially between the United States and Mexico. Many Mexicans working in the U.S. send remittances home or travel carrying cash. For example, someone might arrive in their hometown and give a relative one hundred dollars as a birthday gift.

In all these cases, those dollars need to be exchanged into Mexican pesos through our branch network so they can be spent.

The excess dollars collected at our branches — because we receive more dollars than we sell — must then be exported and repatriated back to the United States.

At Banco Azteca, we ship those dollars abroad, and those shipments must be fully justified due to anti-money laundering and anti-terrorism financing regulations.

To optimize this process, we identified an excellent opportunity to apply blockchain technology because the challenge centered around integrity, immutability, and certainty of information across all our transactions.

As a result, within a single record, we can store all available customer information while meeting international customer due diligence requirements.

Could you explain the decisive role blockchain played in this project?

What we did was apply blockchain principles by assigning a hash to every transaction.

In other words, every transaction is born with a unique hash — its genesis.

From there, groups of transactions are tokenized, and that token is associated with a correspondent bank along with the complete transaction traceability information:

• where the transaction occurred;
• which teller processed it;
• all internal compliance and quality-control procedures related to national and international regulations.

That token — which represents a bundle of transactions — is then shipped to a correspondent bank abroad, and once the token is validated, it is delivered.

In that sense, it behaves much like an NFT: it is consumed, unique, and cannot be reused.

This ensures that a transaction can only be shipped once to a correspondent bank.

As I mentioned, the process provides a very high level of immutability, integrity, and certainty.

What benefits did this initiative provide customers compared to traditional foreign exchange processes?

For customers, the transaction becomes more transparent and secure.

It is also important to note that we did not change the way service is delivered in branches because the entire innovation operates within the back-office infrastructure.

How has the relationship between Banco Azteca and customers evolved in terms of trust and satisfaction since implementing these innovations?

Thanks to this initiative, we streamlined and unified the transaction process.

Previously, we had isolated or satellite control validations operating separately from the bank’s core systems. Now, everything is integrated, making the system much simpler to manage.

As a result, tellers can process transactions more quickly, which creates a lighter and more seamless customer experience.

Ultimately, these innovations allowed us to integrate everything needed to make transactions faster, more controlled, and more reliable — which positively impacts the customer experience.

What were the main challenges you faced while introducing these innovations in Mexico?

There were several important challenges.

First, there was the learning challenge.

Because this was such a new concept, nobody really knew how to do it, so we had to study and understand what blockchain use cases made sense and how to leverage the technology to improve our processes.

The second challenge — like any innovation project — involved obtaining internal approval:

• securing budget;
• finding executive sponsorship;
• getting support to turn the idea into reality.

Fortunately, we had that support and the necessary resources to develop the initiative.

The third challenge, which was equally important, was resilience.

Not everything works perfectly the first time.

We needed a team capable of handling chaos — a team that understood innovation but also maintained a very clear vision of the destination they wanted to reach, even if the route kept changing along the way.

How do you foster a culture of innovation within Banco Azteca and motivate employees to propose disruptive ideas?

Innovation is part of our DNA and our values.

The group promotes innovation through several initiatives, including an internal innovation competition.

Employees are encouraged to submit ideas by explaining both the use case and the business case. A panel evaluates the proposals through multiple rounds, and if a project is ultimately approved, it is presented to senior leadership and receives funding for implementation.

This aligns closely with one of our most important values: we are a group of ideas, but also a group of execution.

That is why we are committed to turning good ideas into reality.

What impact has winning the Platinum Disrupt Award had on Banco Azteca’s reputation and visibility across Latin America?

The award is very recent, but without a doubt it reinforces our positioning as a technology-driven bank focused on the customer.

That focus has helped us achieve several milestones.

Today, we have one of the highest-rated mobile banking apps in Mexico, with a massive customer base performing millions of transactions through mobile devices, including foreign exchange transactions.

This award reflects our commitment to innovation both as a group and as a team.

And consider this: the bank is only twenty years old.

We are still a very young bank, but we are an institution that continues to grow, remains focused on serving customers, and strives every day to provide the best possible service.

What are your future plans for continuing to lead financial innovation in the region?

The group is extremely open to innovation, and we currently have many initiatives underway involving emerging technologies.

We are exploring:

• Artificial Intelligence;
• Machine Learning;
• augmented reality;
• virtual reality;
• blockchain;
• cryptocurrencies;
• and many others.

Some projects focus on using digitalization to bring products directly to mobile devices, while others aim to strengthen payment systems through technologies such as QR codes.

Another area of innovation is biometrics.

We were the first bank in Mexico to identify customers using fingerprints.

Today, Banco Azteca customers authenticate transactions using biometric data.

Continuing along that path, we recently developed facial recognition technology, which we are currently deploying.

How do you view the current level of innovation within Latin America’s financial services industry?

I believe we are at a pivotal moment in the region’s technological development.

We are seeing Brazilian companies grow rapidly, Colombian technology ecosystems evolve, and highly interesting use cases emerging in countries like Venezuela and Argentina, where inflation is driving innovation in payments, value preservation, and business models.

From our perspective as a bank, Brazil, Mexico, Colombia, and Argentina will strongly lead innovation trends.

But we also cannot overlook what is happening in other markets:

• El Salvador making Bitcoin legal tender;
• Panama evolving into a financial hub connecting South America, Central America, and North America.

I see enormous technological growth across the region.

Strong unicorn companies are emerging from our countries, and it makes me very proud to see Latin America becoming a leading force behind initiatives that, until recently, only came from North America or Europe.

What advice would you give other leaders seeking to promote innovation in Latin America’s financial sector?

The best advice I can give is this: you must learn how to manage chaos, because innovation is chaos.

And alongside that, never give up.

If there are projects we truly believe customers and the market will value, we must continue pushing forward.

You need to persevere. You need to secure the budget. You need to execute flawlessly in order to test ideas, launch a minimum viable product, learn from it, and then either scale it or, if necessary, shut it down.

Because yes, some initiatives fail.

But what matters is being like a baseball hitter: you will not hit every ball, but when you do connect, you turn it into a home run.

Discover All the Winners of the Financial Innovators of the Americas Awards

Over the past eight years, the Financial Innovators of the Americas Awards by Fintech Americas have recognized and honored the most innovative banks and financial organizations across the Americas — institutions leading the transformation of both their organizations and the lives of the customers they serve.

More than 150 awards have been presented, and nominations continue to grow by 50% year over year.

The winning initiatives are a source of inspiration for the entire financial services community across the region.

DISCOVER THE MOST INNOVATIVE BANKS IN THE REGION