Luis Gilberto Caraballo, CEO of Blockchain Hub Venezuela and One Click360recently spoke about the possibility of developing Neobanking in Venezuela and highlighted that currently, the focus of financial institutions is transforming, from where customers are no longer passive to the point where they are called “prosumers”that is, now the products adjust to their particularities and requirements.
In an article published by María Stojakovic in Banking and Business, the director of Blockchain Hub Venezuela, explained that banking has moved towards new business models that go hand in hand with technology. Likewise, he specified that neobanking is not an option, but rather what the market is imposing with the wave of financial transformation, which every day has new players.
In this sense, bank offices, the use of plastic in cards, fiat money, given the physical wear and tear and high costs involved, andThey are being replaced by other more modern solutions such as: mobile applications, QR codes, digital wallets and multi-currencies that allow trading with crypto assets.
In addition, Stojakovic noted, the trend is for all these advances to go hand in hand with artificial intelligence (AI), to capture customer behavior patterns and perform intelligent predictive analytics. In this way, it is even possible to determine the products and services that are going to be offered to the person.
“For example, through this type of intelligence it can be determined that a person each month makes a fixed disbursement of 250 dollars and that in a month they cannot cover this payment, so they are offered a loan to solve this lack of liquidity. Records of how the person has operated are recorded and that is why we speak of prosumers, because the orientation is more towards the client than the product”Caraballo explained.
The advantages of neobanking
In his presentation to Banking and Business, Caraballo highlighted that when a bank already has all its technological architectures, services, agency infrastructure and central office, this is gradually being replaced.
“It is easier to turn a yacht than an ocean liner”Caraballo mentioned to describe what this change consisted of.
“If we think that they want to lead a structure of this large nature to offer new services that require innovation, it is more difficult because they need a number of systems, integrating them is complicated because they are made at different times. Any change requires a huge effort and investment”said.
“These costs (of the physical ticket) are greatly reduced by digitization. In addition, in the case of Venezuela, as a result of the devaluation, it is sometimes complicated until we know what the current denomination is.”he added.
On the other hand, Caraballo highlighted that neobanks improve the quality of service, response times and immediacy, and also save the physical transfer of the client to the banking agency.
“You can be at home and enter as many times as you want, without going to the agency. If you are at work, the park, you get into your phone and do your banking, once identified with the relevant mechanisms that guarantee security. We are in a process of acceleration in the world, going to the bank for a signature, at this moment does not have much meaning. For this reason, all these digital platforms are aimed at specialized services”he commented.
challenges to overcome
That said, in Caraballo’s opinion, “Venezuelan banking has not stopped and has continued to capitalize on digitization”. However, He stated that he must face a series of challenges such as: access to technologies, Internet, speed.
All -he mentioned-, aspects to consider if you really want to go towards a banking modernization that, in addition to the complexity of hyperinflation, has been delayed for other reasons: the strong investment in technology that is required, the high legal reserve, and companies without large budgets to invest in new platforms.
“Notorious case, for example, mobile payment, which is born from the Conexus network and is mounted on existing networks to generate an interbank digital service with a very low commission fee and high performance”revealed.
“Two years ago finding cash was practically impossible. Today, 80 percent of payments are made in cash, in dollars. Also, mobile payment is used. Cash dispensing from ATMs practically disappeared”he added.
Regulation of the Fintech sector in Venezuela
Regarding the Venezuelan case, Caraballo narrated that until a couple of years ago with the publication of the Official Gazette No. 42,151, of June 17, 2021there was no longer a lack of regulations in the fintech sector, since with this resolution which also integrates aspects related to the use of blockchain, artificial intelligence, and biometrics “…the purpose is to regulate the financial services provided through new technologies, offered by financial technology institutions, in any of their modalities to the institutions of the banking sector, as well as their organization, operation and functioning”.
“This Gazette shows that shareholders, bank directors, cannot have any type of position in Fintech, in order to avoid conflicts of interest. The companies that emerge must be aligned with the bank, supervised by the National Superintendency of Banking Sector Institutions (Sudeban), and comply with the corresponding protocols and standards.said Caraballo after also opining that the use of Blockchain is the missing piece for offering validity and security to digital transactions.
Fintech news in Venezuela
Finally, the CEO of Blockchain Hub Venezuela and One Click360 Group commented that alliances in Fintech are being drawn up in the Venezuelan market that “they are going to explode” at any time, and that the banks also have their own companies, from which they are offering other digital services such as: Sitca in Bancamiga, DigoPago from Bangente, or the alliance between Ubipagos and Banco Venezolano de Crédito.
In addition, he pointed out that In Venezuela, the process is focusing on two edges: crypto assets and digitization, through banking providers. “Fintechs will offer their services, and, of course, they will innovate and provide other benefits to heavy banking structures, giving them greater flexibility… Going through a digitization process is necessary”he concluded.
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