What’s in it for me:

  • Learn how the financial institutions in Latin America are working with fintechs
  • Find out which financial institutions are the most innovative 
  • Learn which countries in Latin America financial institutions have been working longer with fintechs 

In my last post, I mentioned why fintechs in Latin America have the Perfect Storm on their side. However, financials institutions aren’t waiting to see what happens. The leading financials institutions in Latam have seem what is happening in more mature markets and are trying be proactive.

How financial institutions are defending themselves from fintechs in Latin America? Collaboration is the key word, here follows a highlight of how the main financial institutions in the region are working with fintechs. Just to be clear, here are structured programs that they developed to work with startups, I’m not counting hackathons or unstructured initiatives.

BRAZIL

Brazilian banks are the leading institutions in Latin America, therefore, they were the first ones to start structured relationship with startups. They started earlier than their counterparts, learned through trial and error, and now are expanding their initiatives.

Bradesco: A pioneer in Latin America, Bradesco started working with fintech in 2014 with its competition InovaBRA, where the selected startups have the opportunity to develop a project with the bank supported by senior executives. When I worked at Wayra in Brazil, we had 2 startups (QueroQuitar and Qranio) that participated in this program. In 2016, Bradesco launched the first Corporate Venture of a Latin American bank, which has R$ 100 millions (around US$ 30 millions) to invest in startups. Last year, Bradesco launched its own coworking space for startup, InovaBRA Habitat, to compete with Itaú’s Cubo.

Itaú: Since 2015, partnered with one of the main Venture Capital firms in Brazil, Redpoint e.Ventures, to create Cubo, a huge coworking space that enables Itaú executives to be close with fintechs and also to identify the ones that they could work with. In 2017, Itaú annouced that it would increase 4 times Cubo’s current size to accommodate 210 startups.

Santander Brasil: Although the bank always had a good relationship with entrepreneurs, it didn’t had any specific program with startups. That changed last year when Santander launched an acceleration program together with Endeavor, the Empreenda Santander 2K17.

Banco do Brasil: The bank decided, in 2016, to create an advance laboratory in the Silicon Valley to co create with startups, called Labbs and is based at Plug’n’Play facilities. A year later, it opened a Labbs in Brasília.

Porto Seguro: This Brazilian insurance company is the most innovative in the market and launched the first acceleration program by an Latin American insurance company in 2015. The program is called Oxigenio and is a partnership with Plug’n’Play and operated by Liga Ventures.

Visa Brazil: Visa launched in 2016 its Visa Innovation Center in São Paulo to co-create payment solutions with startups. In the same year, it launched its acceleration program Ahead with the support of Startup FarmStartup Farm. In 2017, kicked-off another acceleration program called Track in partnership with GSV Labs and Kyvo.

MEXICO

Mexico is the second most important market in Latin America, Mexican financials institutions started to move a little bit later than their Brazilian counterparts, however, they are investing well in that relationship.

BBVA: Probably the most innovative bank in Mexico, BBVA has been working for the past few years with its regional startup competition, OpenTalent. In 2016, the bank bought the Mexican startup Open Pay. Last year, it launched BBVA Open Sandbox, an open innovation initiative to select startups to have the opportunity in work together with the bank to develop projects.

SURA Mexico: Sura just hosted last week its Demoday for its first acceleration program, Aceleradora Sura, with Bluebox support. Although Sura calls it an acceleration program, it’s more like an open innovation program to work in projects with Sura.

Citibanamex: The Mexican branch of Citi Bank moved took a little longer to start and, in 2017, partnered with Village Capital to accelerate startups in the region, Village Capital Fintech: Latam 2017.

Santander Mexico: In 2017, Santander Mexico decided to work more closely with startups, launching a digital factory called Spotlight, which is a coworking space for up to 120 startups to work closely with the bank.

Banregio, Visa, HSBC and Gentera: The beginning of 2017, Banregio, Visa, HSBC Mexico, Fiinlab by Gentera, Ignia, EY Mexico and White & Case, came together with Finnovista and Startupbootcamp to launch Startupbootcamp Fintech Mexico City. An acceleration program focused on fintechs in Latin America.

COLOMBIA

A part from Grupo Sura, the Colombian financial institutions aren’t moving as fast as the Brazilian and Mexico.

Grupo Sura: The Colombia pension fund, Sura, partnered, in 2016, with Veronorte to create a Corporate Venture fund, Sura Ventures.

Bancolombia: A few days ago, Bancolombia just signed a partnership with Plug’n’Play to participate on Plug’n’Play Fintech accelerator.

CHILE

Chilean financial institutions are still starting to work with startups.

Banco BCI: The Chilean bank launched, in 2016, the BCI Labs as a acceleration program and a coworking space with the support of NXTP.

Banco Estado: The public bank kicked-off its open innovation program called Emprende + Empresas, which select startups to work closely with the bank in projects.

ARGENTINA

Argentina still doesn’t have many financial institutions programs to work with startups, but, in 2017, six Argentinian banks launched a fund called Arfintech to start investing in fintechs (link).

Also there are some regional initiatives that needs to be highlighted:

Scotiabank: The Canadian bank, that has some local operations in Latin America, partnered with the American Venture Capital fund QED, which is focused on Fintechs, to invest in fintechs in the region.

Visa: The payment giant is really concerned about its position in this new environment, therefore, it launched last year a fintech competition called Visa Everywhere Initiative, supported by Finnovista.

In summary, financial institutions in most countries in Latin America started to work with startups, however, most of them started in the past 2 years. Since Brazil is the biggest market in Latam, it was expected that Brazilian banks would lead and Mexican banks took a few years to realize that they needed to move. The most impressive is that Colombian and Argentinian banks are way behind on that regard.

It will be interesting to see how this relationship will evolve in 2018!

Key Takeaways:

  • Brazilian financial institutions are leading the relationship with fintechs with the main players having their on initiatives
  • Mexican financials institutions took more time to start working with fintechs them their Brazilian counterparts but are investing a lot now. Most of them through partnership with companies that have experience working with startups.
  • Colombian and Argentinian banks took longer to realize they need to cooperate with other banks.
  • Many banks, instead of starting their own initiative, decided to partner with accelerators or startup specialities to start working with startups
  • Still not many financial institutions are directly investing or buying startups

 

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