Fintech, cryptocurrency and even cooperative companies are part of the calls Alternative Finances, an industry with enormous growth in Argentina and the world in recent years, thanks to technology and “bring answers to the failures of the traditional system,” according to Ignacio Carballodirector of the Center for Alternative Finance of the UCA.
According to data from the Central Bank, close to the 99% of the Argentine adult population currently have a bank account and more than half of money transfers involve an account associated with a virtual wallet (CVU), while just five years ago half of the country’s adult population claimed not to even have a bank account.
In an interview with Télam, Carballo reviewed the news of an industry that, in a short time, changed the link with money of millions of people who had never accessed formal financing before; he redefined the articulation of the financial industry players; and he faces the challenge of training professionals as demand in the sector grows.
– What are alternative finances?
-They are all alternative proposals to traditional finance, commonly represented under bank finance. Fintech, crypto, cooperatives, ethical finance and Islamic finance, among many, enter the alternative finance umbrella. They are proposals that come to be used as an alternative to the traditional model, in order to solve the failures that financial systems have historically caused.
– What evolution have you had in the last five years in Argentina?
-Five years ago, if you did a survey, 51% of Argentines told you that they did not have a financial product. Today the Central Bank says that 98.5% of Argentines have a financial product. Growth is, in relative terms, one of the largest in the region.
We have specific data such as the number of CVU transfers (they are involved in 54% of money transfers), the number of client accounts (nearly 9 million open accounts against less than half a million in 2018) or the uninterrupted growth of work that generated by the Fintech sector (more than 27 thousand employees in the sector against less than 9 thousand in 2018).
These are just some of the variables that show that, indeed, the Fintech sector, the latest manifestation of traditional finance, has transformed for the better and opened the doors to many people in terms of financial services.
– To what extent have alternative finances helped unbanked people in Argentina?
Alternative proposals bring answers to the failures of traditional financial systems. In the case of Argentina, fintechs mobilize 50% of all monetary flows in the country, the number of client accounts (necessary for investment in the capital market) has multiplied almost four since the Fintech irruption and we can give more examples .
We recently did a study with Mercado Pago that found that 45% of its users had access to a payment instrument, a card and credit for the first time in their lives. There is enough evidence to think that, although we cannot quantify, they undoubtedly made a very relevant contribution.
– What role does traditional finance (mainly banks) play in this scheme?
They play a fundamental role. The true transformation of finance as a concept will occur when the alternative and the traditional, together, work in such a way that it becomes a motor for economic and inclusive development.
– At an educational level, what training is required to work in this industry? Is it just programmers’ land or is there more to contribute from?
-As in any industry, as the Fintech and alternative finance sector in general matures, the demand for labor becomes polysemic. So while you might think that all you’re suing for are programmers and such, that’s not true. Employees with a business vision are increasingly needed, who can read digital transformation trends, who can understand competitive environments and carry out a correct market and risk analysis, for good decision making.
Today there is a demand as a result of a growing sector that demands different profiles. In our Alternative Finance center we train with a business vision, with a theoretical framework, and with the voice of the private and public sector, with more than 50 allied institutions.
– What is the level of commitment of companies and the public sector to generate spaces like these?
-In our particular case, the level of commitment is absolute. Today we are supported by more than 50 local, regional institutions, some from Europe, private, chambers, associations, banks, fintechs and crypto institutions. We have had support from regulators, multilateral organizations and even entrepreneurs and financial institutions of all kinds. I think this comes hand in hand with an increasingly mature notion, of the need for these authors to train professionals as the difficulties demanded by the sector grow.
– How do you educate yourself about something that is constantly changing?
-It is a huge challenge. We do it by conversing with the protagonists of the private and public sectors, who curate our content, collaborate in classes and come as guests to talk about specific aspects or exemplify theoretical aspects. The only way to live up to and educate about something so dynamic is for the academy and the private and public sectors to have a virtuous, fluid dialogue and space for interaction in content and dissemination.
