Friday briefing: Traditional license + digital bank = ?

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October 7, 2022

#TopStory 🔝

Banorte arrives at its next party

Grupo Financiero Banorte is one step closer to launching a new digital bank, after receiving authorization to open a new multiple banking institution.

It is part of a strategy outlined 18 months ago, when the CEO announced that the bank wanted to be “at
all the parties.” Since then, Banorte has partnered with Rappi – and has issued some 600,000 cards to date through that joint venture – but still has ambitions to also launch a 100% digital bank.

And while the new institution could be described as a fintech, the bank opted for another regulatory path.

“We have already confirmed that it will be a 100% digital bank with a digital bank license and it will not be covered by the Fintech Law, but rather as a different entity,” says Héctor Ortega, CEO of Hypertech, a technology company focused on digital channels for the financial sector.

According to Ortega, several attempts had already been made in Mexico to achieve this type of approval (of an additional
multiple banking institution license) but none managed to be as successful as Banorte. The bank has 11 million clients, of which a little more than half used digital channels in the second quarter.

Finally, this bet by Banorte could push other traditional banks accelerate their digital strategies.

“Fortunately there are still many needs for financial inclusion. We are not completely banked, so I think there is a lot of material and a lot of market still,” says Ortega.

#Strategic Plays 📊

Creditas: more loans, but more losses

Brazilian fintech Creditas had a net loss of R$284.7 million (US$54 million) during the second quarter of 2022, more than double the same period in 2021. The company’s loan portfolio also grew 2.5X compared to H1 2021, to reach just over R$ 5,000 million (US$ 960.5 million). The lending growth is led by car loans and the acquisition of Andbank.

Bancolombia and Monet will launch digital wallet

Colombian fintech Monet, which offers income advances through an app, is planing a deal with Bancolombia to launch Monet Pay, a digital wallet, in the coming months.

Also…

• The Brazilian bank Bradesco began operations as an initiator of payments within the framework of Open Finance. Now, its customers will be able to make payments via Pix using funds from any bank within the Bradesco app.
• Apple Pay will operate in Chile at the end of this month. The launch involves the main banks in the country.

#Regulation ⚖️

In Mexico, changes to consumer protection regulation are causing headaches for financial institutions.

In Argentina, money held in digital wallet accounts will be subject to the same rules of seizure as that deposited with banks.

In Peru, rules on how financial institutions can issue subordinated debt to comply with capital requirements are being tightened up.

• Keep ahead of regulatory changes in LatAm digital finance with iupanaPRO.

#Investments 📈

Ualá will invest US$ 150 million in LatAm

The Argentine unicorn Ualá will invest US$150 million in the next 18 months in order to develop its products and encourage financial inclusion. In addition, they expect to add more than 25 million users in 5 years.

Also…

• The Telefónica Group will invest US$2 million in 14 startups in the region through its Wayra fund.

#People 👥

Clara appoints CFO

Mexican unicorn Clara named Rodrigo Aparicio as the new chief financial officer (CFO). Aparicio previously worked in the same position at the technology company 3M.

#iupanaExclusive 🔥

Mexican companies Flink, Cacao and Oyster show that there are opportunities for startups even if they don’t succeed in getting a fintech licence. This week we spoke with Sergio Jiménez, CEO and co-founder of Flink, who discussed why the law needs to change

Learn about what lies beyond the Mexican Fintech Law in this week’s iupana exclusive.