MIAMI, FL -- Only 51 percent of adults in Latin America and the Caribbean have a bank account, according to the World Bank. The rest of the population, or the unbanked, pay cash each time they go to the supermarket or pharmacy. Paying their cell phone or utility bill often means standing on a long line, making the process tedious and time consuming.
But that has been changing with financial technology companies, also known as fintech companies, which offer new options. These are startups that are providing creative alternatives to traditional banking, like using mobile phones to pay bills or for sending and receiving money. It’s transforming the way businesses and consumers use financial services.
In the past, traditional banks have stayed away from these startups, but that has changed with more banks realizing that ignoring them means lagging behind competitors.
For this reason, Fintech Americas is holding their second Banking Disruption Conference on Oct. 22 and 23 at Miami Dade College. The conference is an opportunity for the banking sector, IT experts, and senior executives to gather and explore the challenges and opportunities banks face in today’s world of technology and how they can benefit from engaging with startups, especially those focused on Latin America.
“There’s a lot of developmental opportunity in Latin America,” said Ray Ruga, cofounder of Fintech Americas, in an interview with NBC Latino.
Miami is already becoming a hub for financial-technology services, especially from Latin America. Raising money south of the border is difficult because of the financial risk.
For some companies and investors, “Latin America is far away with a lot of real and perceived risks,” said Ruga. For example, he pointed out how Argentina has a vibrant tech industry, but some investors may feel more comfortable investing in an Argentinian startup in an American city like Miami, where they feel there is less governmental and political uncertainty.
An example of how technology can have a large impact on both U.S. Hispanics and their relatives in Latin America is in remesas, the remittances or funds that immigrants send to help their families back in their home countries. Latin America and the Caribbean received a record number of remittances in 2014, totaling over $65 million, according to the Inter-American Development Bank.
Allowing immigrants to send money from their smartphones can reduce time and fees. So, ahead of the conference, Fintech Americas held a virtual hackathon to come up with technology solutions on how to make remittances faster and cheaper for users. The top three finalists will be presenting at the conference. “It’s extremely impactful,” Ruga said.