Former President of the Uruguayan Chamber of Fintech, Martin Naor, highlighted the role of Fintech for financial inclusion. He did so in an interview published by the newspaper La Mañana on January 15.
It should be noted that Naor has experience in the world of software and entrepreneurship. In the publication they highlighted that he is also the founder of Bankingly.
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When asked how the fintech sector differs from the incorporation of technology by traditional banks, he replied: “If you go for purity of terms, none. He then explained: “As a concept, fintech is the sum of finance and technology. The difference is in the focus that fintech companies have that does not come from banking history and the customer experience. Many fintech companies are born out of a super specific need and tend to be excellent solutions to that need, whereas a bank tries to solve 400 different needs, all in the best possible way, but it is not easy to be excellent at all of them”.
On the other hand, he spoke of the difference in the target that fintech and the traditional banking sector are aiming at. He indicated that many fintechs have started out thinking about people and SMEs, while traditional banking focused more on people with high incomes.
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Regulation in Uruguay
He was also asked about regulation in Uruguay, and on that he commented: “The Central Bank of Uruguay (BCU) has published a roadmap as to which areas it wants to ensure that it improves competition and opens up the systems to all players who want to enter and meet the requirements, so that they can do so. That is the crucial thing; no fintech is asking for advantages, but to be able to play, and there is a lot of very old regulation that is made for a pure bank status quo. Therefore, in Uruguay there were several bottlenecks where banks had the capacity to slow down almost any progress in payment and point of sale systems.
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In terms of regulation, with respect to the region, Naor said that Uruguay is behind. “Since the 2002 crisis, the main focus of regulation has been the soundness of the system and that the same thing should never happen to us again, which is a super important and shareable goal, but it has the risk that if you only focus on that, you can become irrelevant because you are old. So now we are behind our neighbours and almost all of Latin America, with a few exceptions, and we have to move forward.
“The advantage is that we saw several things happen in Mexico, in Colombia, in Argentina, and of course you can learn from others. In legislation and regulation it is very much used to be guided by the cases that worked so as not to have to reinvent strange things. That’s the job the BCU has to do now along with the whole industry, both banks and fintechs,” he added.