Here are the top 10 quotes, among the many keynotes, panels, and conversations at LendIt fintech LatAm Miami Last week.
Check out the linked LendIt TV recordings of the live speaker content for each section.
1. Boring is good
Andressen Horowitz General Partner Angela Strange spoke about the most significant untapped opportunities in Lat Am today. What makes her most excited in the space?
“Infrastructure, the more boring your business, the more excited I am,” Strange said.
“What it takes to start a new bank in Brazil is very different than what it looks like, say in the US today, right? Like, oh, I just want to grab my Know Your Customer off the shelf; well you can’t really do that. You’re building ID verification yourself; you’re building fraud yourself; you’re building all the payments. You’re building the ledger, like who’s issuing your cards while you’re probably using an old provider. Maybe you need to build that yourself.”
2. Public knows best when the weather is warm
Paulo Passoni spoke on day two, the Managing Partner of Softbank’s Independent LatAm fund. He has been working in financial markets for well over two decades and commented on the public pricing of fintechs like Nubank.
“Public markets are a better predictor of the future than private markets; I’ve done both so I can tell,” Passoni said. “People that bought in private markets live in a bubble until the bubble burst, and then they readapt. People who call the public markets are constantly bringing information to the prices. So when the markets do correct, it means something.”
Passoni went on to say that the overall market has not been in an actual recession in over 10 years. He said despite the frequent worries that stocks are down one or two percent this year, the “winters” are truly painful, as in -20% in a year painful.
3. Automation is not scale
Sergio Furio, Founder and CEO of Creditas started the show by speaking about building a scaleable fintech and partner network. He said it took years to convince investors of home equity, a complex paper process that was scaleable in a digital format. Investors thought scalability meant automation, pressing a button and going to sleep, and everything works hands-free.
“And I struggled to convince them that in reality, that’s not scalability. Scalability is how you can continuously grow without deteriorating unit economics,” Furio said. “You can create a machine that is automatic, but if it just puts through garbage all the time, that doesn’t mean that it’s scalable. It means that you have automated something that’s s**t.”
4. LatAm hybrids are easier than banks
Credijusto, the first Latin American fintech in Mexico to buy a bank, faced many viewer-submitted questions. CEO David Poritz said that after the headache of the bank approval process, he was in no rush to buy a bank in other countries.
“As we expand our business regionally, whether it be to the US or other Latin American countries, I think there’s a hybrid model that we’re gonna start to see,” Poritz said.
5. Mexican mortgages have to change
CEO and founder of Yave Bernardo Silva won the Pitchit competition with his business model for a Mexican Mortgage fintech taking on the old-fashioned market.
“In Mexico, If you want to integrate the mortgage process into your sales, it’s basically impossible. That happens because five banks and the government have 98% of the mortgage market in Mexico. There’s no tech. There’s no separation.”
6. Cash is still king
David Lask, GM of Tala, spoke about how data and tech encourage inclusion in the emerging markets of lat am.
“Over 60 million people in Mexico do not even have a bank account. Mexico is a cash-based economy, it has been changing significantly given the mobile penetration in the country, and this adoption, of digital tech, ” Lask said. “It’s something that’s changing, and we want to be a part of that, a part of a product tailored to the particular needs of the customer.”
7. Better data: Better homes
“In the neighborhoods we operate in Columbia, among sellers, we have about a 55% brand awareness.” Bryn Rojas said, the Co-Founder and President of home renovating and marketplace fintech Habi from Columbia.
After moving to Bogata, Rojas founded Habi, finding the home buying process a nightmare, with hardly any historical data behind house listings. Rojas said her firm was unlocking data to transform the market by offering data. After success in Columbia, like many fintechs in Lat Am, the firm aims at a new market. “And it was so far the best decision. Mexico’srowth has outpaced every other city that we open and has vastly outpaced our projections.”
8. ‘Credit Cards Suck’
During the Using Advanced Analytics in Underwriting panel late Wednesday, Wes Smith talked about developing small-dollar lending alternatives to credit dependence. Smith is the Leader for Information Systems at Lexis Nexis, an international credit risk solutions firm.
“I don’t think that we truly understand what it’s like to remember college days, not being able to make a purchase or not be able to pay for portions of the week,” Smith said. “When we use credit cards, we use them for cash flow. We don’t use credit cards for income assistance, and credit cards suck for income. You should not be using it because you’re paying a percent interest rate when you need it.”
9. Infastructure changes
Talking about the changes in Open banking in Lat Am, CEO of Prometeo Ximena Aleman spoke about the immense progress of Open Banking in Lat Am.
“Not five years ago, the infrastructure we were talking about was ATMs,” Aleman said. “In the complexity of financial services, user behaviors change so much that sometimes it’s kind of difficult to picture what financial services will look like in another five years’ time.
10. Fintech can change Lives
During the Different paths to Innovation in Neobanking talk, Norman Muller, CEO and Co-Founder of Fondeadora, spoke about the necessity of fintech innovation in Lat Am and how NeoBanking can help lift people out of poverty through financial access.
“I try to be as clear as I can: we need water to survive, and we need access to money and to an economy to thrive,” he said.
