This week we saw how digital banking is impacting two of the region’s largest financial institutions: Santander and BBVA. In addition, more neobanks arrived in Latam—Brubank in Colombia and OpenBank in Argentina—and Nubank introduced a new insurance product, hotting up competition in the unicorn club. This and much more in our weekly summary👇👇👇
Digital banking fuels Santander and BBVA profit
Santander and BBVA, two Spanish banks with a strong presence in Latin America, highlighted the importance of their digital operations to profitability, customer acquisition and retention this week as they presented 2021 financial results.
Use of Santander’s digital services saw a major increase, with 76% of all transactions at the group’s main banks going the electronic route. Its South
American operations saw a 17% jump in the number of digital users to 23.8 million, bolstering earnings growth.
“At the South American level, Santander had [ordinary profit] growth of 24%, thanks to its approach to profitable growth, boosting its digitalization, customer loyalty and cost control in a context of inflation,” said Ana Botín, CEO of the conglomerate, during a presentation. Brazil and Chile were the most profitable units among the bank’s competitors.
At the group level, Santander reported a profit of 8.12 billion euros last year, an increase of more than 25% over pre-pandemic levels and reversing most of the loss recorded the previous year.
Meanwhile, over at BBVA, digital sales accounted for 73% of total units sold last year, up from 67.5% in 2020. Colombia was the stand out operation, with 86.9% of sales going via digital channels.
The group reported a jump in mobile customers to 40 million from 33.4 million in 2020 and described the progress of its innovation strategy as “extraordinary.”
Openbank enters Latin America
In other Santander news, its digital subsidiary Openbank began operating in Latin America, specifically Argentina. The neobank is offering accounts with a debit card, instant transfers and a
service for storing passwords.
Brubank to compete with Ualá and Rappi in Colombia
Brubank, one of the most successful digital banks in Argentina, has applied for a license to offer deposit accounts in Colombia, in a bid to compete with neobanks already positioned in the country, such as Ualá, Nu, Rappi Bank and Lulo Bank.
Brubank expects to start operations in the second half of the year, and will
offer its customers a contactless debit card managed via its app.
Nubank expands its insurance offer
Nubank has added cell phone insurance to its product portfolio, with the backing of Chubb. It follows the introduction of life insurance last year.
The move heats up the competition among Brazilian unicorns for a greater share of the insurance market. Creditas also offers a variety of insurance products,
including electronics insurance that covers cell phones as well as other devices such as laptops and digital cameras.
A new Latin American unicorn is born: Betterfly
Betterfly, the Chilean insurtech, became the region’s latest unicorn after raising US$125 million in a Series C investment round that valued the firm at US$1 billion. The fintech, which offers insurance products combining financial services with health and wellness, plans to expand this year to Mexico, Argentina, Peru and Ecuador and subsequently to the U.S. and
Keo World raises US$500m financing for BNPL
Keo World, a fintech focused on buy now, pay later (BNPL) solutions for Pymes, has obtained a credit line of up to US$500 million from Hayfin Capital Management LLP. The proceeds will be used to strengthen its financing program in partnership with American Express.
Tribal plans Brazil foray after raising $60m
Tribal, a B2B payment and financing platform, began offering credit solutions for businesses in Brazil as part of its expansion in Latin America. The move comes after the firm raised $60 million in a series B funding round. Tribal will use the proceeds to strengthen its teams in Mexico, Colombia, Peru and Chile.
R2 closes US$5.9m seed round
R2, a fintech that provides technological infrastructure to enable loans to SMEs through third-party platforms, raised US$5.9 million in a seed round
led by General Catalyst, Y-Combinator and 166 Second. The funds will be used to accelerate its product.
Mento signs deal with Mambu
Chilean digital lender Mento signed up with Mambu, the cloud banking platform, to offer loans to unbanked and underbanked segments.
Edgardo Torres-Caballero leaves Mambu
After five years in office, Edgardo Torres-Caballero leaves the post of managing director at Mambu Latin America. The executive didn’t reveal his next step.
Kueski nabs Nubank’s data director
Kueski, a Mexican online consumer lender, has appointed Nubank’s former chief data officer, Krishna Venkatraman, to boost information management as it seeks to to improve retention and product personalization. Alex Schleifer, who previously served as design director at Airbnb, joined the advisory board with a view to help improve user experience.
Banco do Brasil: critical mass will unlock the full potential of open banking
Open banking and its impact will only be felt when more customers agree to share their data, which will allow banks to reformulate products and offer new services, Pedro Bramont, director of digital business at the state-owned bank, told iupana.
Banco do Brasil plans to use open banking data to:
- Offer lower interest rates
- Offer tailor-made banking products
Four questions with… Rebeca Álvarez
Rebeca is managing director at Mexican law firm Loxical
What new challenges does digital banking face?
We mustn’t only worry about technological advances or new forms of payment, we must think about the social context of users and somehow get involved in their lives.
Take into account the super apps that are complete services in which you can see finances, savings, credits, entrepreneurship, etc. In addition, be able to provide these services immediately.
What advice would you give to anyone who wants to succeed in the sector?
Preserve the teachings and foundations of the financial sector of the past and always innovate.
What tips would you give about getting organized?
Divide the day into work activities, interact with others and with yourself
Have good communication with your co-workers
What fintechs surprise you in Latin America?
Rebeca Álvarez talked about electronic signatures and their role in digital customer jouneys in a iupana online workshop this week. Watch the recording here.