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  • Three ways banks can attract millennials

    Three ways banks can attract millennials

    71% of the millennials in the United States would rather go to the dentist than listen to what banks are saying, according to the Millennial Disruption Index, while 35% of the banks in Latin America feel they are not meeting the needs of this generation, and 71% admit they are unable to rapidly adapt to technological advances, according to a study done by the GMix program of Stanford University and Technisys. However, in upcoming years this age group will be the main source of consumers and labor. Millennials represent close to 30% of the population in Latin America and the Caribbean. For more than half of them, only innovative companies will be successful. In effect, four out of every ten believe that the private sector is the true driver of innovation, according to a survey conducted by Deloitte. For this reason, banks in the region are looking for new formulas to attract them: 1.     Chile: Collaborative spaces The millennials are the “BRICs” of the age groups: due to their size, they can disrupt the economy, particularly the banking industry, according to Scratch. In Chile, banks are betting on collaborative spaces to approach this generation. Thus, was born Work/Café, a space open to the general public for working, holding meetings, and using free Wi-Fi and that already has six locations in the country. The Santander Group’s wager includes a cafeteria with discounts for clients, executives specializing in financial advice, and ATMs for cashing checks, making deposits, and transferring funds. Another characteristic sought by millennials is flexibility. Thus, these branches add four hours to traditional banking hours in Chile, remaining open for 18 hours, Monday through Thursday. Work/Café also gives talks in order to keep capturing clients constantly. [clickToTweet tweet="35% of the banks in #Latam feel they are not meeting the needs of the millennials" quote="35% of the banks in Latin America feel they are not meeting the needs of the millennials" theme="style1"] 2.     Brazil: 100% virtual In Latin America and the Caribbean, 55% of the population buys products via the Internet and 90% of millennials are digital banking clients. For this reason, a Brazilian bank made the decision to be the first 100% digital bank. Banco Original developed a website, applications for mobile telephones, tablets, and even Smart TVs to reach its public on line and close its branches. To avoid in-person visits, this Brazilian bank developed a site with services for personal, commercial, and agribusiness banking. In addition, it developed Bot Original, a service enabling interactions via Messenger and even on Facebook, with a robotic system of instantaneous responses for clients. 3.     Mexico: On-line support for SMEs One of the region’s largest financing gaps is experienced by small and medium enterprises (SMEs); this gap is estimated at between $210 billion and $250 billion. However, for more than half of the region’s millennials, a venture is one of the most important achievements. Thus, the banking system is seeking ways to facilitate access to financing for SMEs given that applications for financing for companies of this type still require in-person visits in many countries. Bankaool, Mexico’s first 100% on-line bank, developed financing tools for SMEs. Clients can apply for and receive financing for their businesses in a more streamlined and expeditious way. This has also allowed the bank to carve out a niche within the financial industry based on its work generating inclusive businesses. Innovative wagers continue to flourish in the region and in the rest of the world, from applications for different financial operations and the use of biometric profiles, to the development of products for women’s banking. They all seek a positive effect on returns, efficiency, and the consumer’s experience. It is thus essential to continue looking for strategies that make attracting millennials possible since, as John D. Wright once said, “Business is like riding a bicycle. Either you keep moving or you fall down.” Now we need to see what the banking sector’s next move will be in the region. Subscribe to receive more content like this! [mc4wp_form]

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  • Blockchain: Democratizing finance

    Blockchain: Democratizing finance

    Fourteen million small agricultural producers in Latin America and the Caribbean are exposed to climate change with repercussions on land quality and yield. These producers have very limited ability to access financial services such as agricultural insurance. Less than 20% of local banks serve agribusiness, due to the high costs and the difficulty of assessing credit risk or damages in the case of insurance. The revolution in financial inclusion has the shape of blocks This situation is changing through the introduction of Blockchain in financial services. Blockchain is a technology to carry out financial transactions securely, transparently, and reliably between two separate users, whether banks or individuals, without using an intermediary, so that costs can be reduced. Blockchain technology uses a distributed database that saves blocks of information and links them to facilitate information retrieval and verify that the blocks have not been altered. In the case of agricultural insurance, Blockchain makes possible the use of smart contracts between the farmer and a financial institution, using reliable information based on weather data. One of the advantages is the automatic execution of the contract that relies on predefined conditions without requiring human interpretation. For example, a compensation is paid when a defined quantity of rain is exceeded, causing production losses. Another advantage is that with this model, insurance can be accessible in terms of costs ($2 to $3 per month) and in terms of geographic coverage, which is not feasible with the traditional insurance model. [clickToTweet tweet="Some banks stated that Blockchain-based commercial services will operate before the end of 2017" quote="Some banks stated that Blockchain-based commercial services will operate before the end of 2017." theme="style1"] There are already start-ups developing products that increase financial inclusion using Blockchain technology, such as the Etherisc company with crop insurance. Other applications cover remittances’ transfers, identity and background check systems, clearing and settlement in payment systems, credit history, property registration, and land tenure. The rules of the game are changing for financial institutions With the availability of Blockchain, banks can increase their client base, geographic coverage, and the financial products they offer while reducing operating costs. In an IBM survey, 17% of the banks interviewed stated that Blockchain-based commercial services will begin to operate at commercial scale before the end of 2017. Ignoring this wave of innovation not only means losing an opportunity to contribute to financial inclusion in our region, it also means running the risk of not being competitive and being left out of the market with little notice. Subscribe to receive more content like this! [mc4wp_form]

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    Innovation during COVID-19: If You Want Something New, Stop Doing Something Old

    In discussions about innovation, the focus should be on creating better processes and technologies that allow for increased productivity and value creation. There's no need to reinvent the wheel or the iPhone, but simply to make use of creativity in the region to fast-forward its exit from the crisis.

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  • Five Fintechs Disrupting MSME Finance

    Five Fintechs Disrupting MSME Finance

    Big data is changing everything from the way we shop to how we travel. Financial technology companies (fintechs) are now following in the footsteps of giants like Amazon, Airbnb and Uber to transform the banking industry in the digital age. Fintech solutions have shown particular promise across emerging markets where big data is used in advanced credit analytics to help determine a borrower’s creditworthiness based on non-traditional indicators like cell phone usage and social media activity.

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  • Don’t let base of the pyramid millennials catch your company off guard

    Don’t let base of the pyramid millennials catch your company off guard

    Hardly a day passes without a new article on how businesses are analyzing the needs, wants and spending trends of millennials. In the US alone, millennials (or Generation Y), those born between 1980 and 2000, represent 30 percent of the population. By 2025 they will be 75 percent of the workforce of this country. The impact that millennials are starting to have on the global economy, the environment, and politics is enormous. But “millennial mania” is dominated by studies, research and marketing efforts that focus on affluent individuals. Meanwhile, in Latin America and the Caribbean a market of 77 million low-income or base of the pyramid millennials goes almost unnoticed.

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  • WANTED: Innovative companies for a $760 billion market

    WANTED: Innovative companies for a $760 billion market

    It has been more than ten years since we first read about the base of the pyramid (BOP) and the large and virtually untapped market represented by this socio-economic segment. People at the BOP in Latin America and the Caribbean live on less than $10 a day, but they have benefited from the region’s economic growth between 2000 and 2010 and their incomes have been growing ever since. Latin America’s BOP now encompasses 406 million people and represents a market of $760 billion. A market segment that awaits for innovative companies.

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