LATAM’s Payments Innovation Renaissance

Providing onboarding services in the Latin American market is both an exciting opportunity and a challenging one.

The level of opportunity arising in the market across verticals — but particularly in financial services — means there are literally thousands of startups and more than a few legacy banking players rapidly pushing into the digital ecosystem.

For a firm like Jumio, which specializes in digital onboarding, that is undeniably good news, as there are all kinds of players looking to tap into its services.

“If a firm needs to digitally onboard someone and verify them, we can help that company do that fairly seamlessly,” Samer Atassi, regional director, Latin America and Caribbean for Jumio, told PYMNTS in a recent conversation.

And there is no shortage of interest in the region in that ability, with particular interest coming from the financial services sector, the cryptocurrency markets and in the healthcare vertical.

Opportunity, he noted, abounds.

But, Atassi said, Latin America is also a challenging region to take on as a whole because nation-by-nation and vertical-by-vertical, the situation on the ground can vary quite widely in terms of infrastructure, consumer interest and regulatory prerogatives.

On one side of the spectrum, he said, there are markets like Brazil, which are highly advanced and in need of specialized services around onboarding and verification. In those markets, Jumio can do things like its recently announced partnership with investment bank BTG Pactual in Brazil.

On the other side of the spectrum, he said, are nations with high unbanked and underbanked populations where the most pressing concern is how to vet customers who, in some cases, live over 100 miles from the nearest bank.

“Some customers we work with are looking for solutions because they really want to improve the process and their customer conversation,” Atassi said. “Others are just looking for a way to even be able to comply with KYC [know your customer] regulations as they are trying to remotely enroll unbanked consumers.”

To keep up with the exploding growth in the Latin American market, he said, Jumio has to be able to consistently and accurately provide verification services for both ends of the spectrum, and all of the points in between.

A Diversity Of Needs

Brazil is an advanced market — so advanced, according to Atassi, that one could argue it’s ahead of the United States in terms of the level of digital service consumers can routinely expect. The pressure in that kind of market, Atassi noted, is to really expand access to those cutting-edge services.

That, he said, is the root of the firm’s new partnership with BTG Pactual to build automated onboarding into its digital investment platform. Using Jumio’s verification tools, BTG Pactual clients can open a new account online and manage their investments through the digital platform with the support of a dedicated team of relationship managers.

The move comes as BTG Pactual is expanding its services roster beyond high network individuals, and expanding with customers who have funds measured in the tens of thousands ($30,000 is the recommended base amount to fund an investment account) as opposed to customers with investment funds measured in the millions and tens of millions.

To adapt to that influx of customers, BTG Pactual needed an onboarding process that was digital and automated — as well as compliant, secure and scalable to the needs of the investment platform as it expanded.

But in markets like Mexico, the challenges are quite different. Over 40 percent of the adult population is unbanked, and the government is avidly pushing digital onboarding and enrollment as a solution to that problem. The task in that environment is to find solutions for the “1,000 new FinTechs rising to meet that challenge,” according to Atassi, and to do that concurrently with an entirely new regulatory and compliance structure going into place.

“What we see across the board is that the Latin American [market] is maturing very quickly and catching up very fast. But that means it is a very dynamic regulatory market, and things are changing almost by the day,” he said.

Meeting A Dynamic Market

The Latin American market isn’t going to slow down — not from an innovation standpoint, and not from a regulatory standpoint. The world has already seen big changes in Mexico, Atassi noted, and the reality is that those types of changes are going to spread throughout the region. They are already seeing evidence of that in places like Brazil, Argentina and Colombia.

The challenge Jumio faces, he said, is future-proofing against an outlook that is broadly heading in a digital direction, but is still fairly cloudy when it comes to a lot of the particulars. Part of that, he added, is across-the-board high standards when it comes to compliance and verification. The firm is already GDPR compliant, and hitting that high bar tends to mean it is ready for whatever other markets throw out in terms of compliance regulation, with perhaps some tweaks for local particulars.

Moreover, he noted, Jumio has a basic understanding that getting to a digital future often means being able to interact with a present that is still analog and very non-standardized in many places in the developing world. Identifications aren’t standardized across Latin America, and they’re based on paper in many cases.

Working in that environment, he said, often means being able to take a few different possible forms of ID and use artificial intelligence (AI) to really take a closer digital look — even if the starting document is a piece of paper issued in a local province. In almost any region Jumio does business in, the firm takes three or four types of identification — and can accurately scan and separate the real article from attempts at fraud reliably.

And accurately, he noted, doesn’t just mean they lock out fraud.

“There tends to be too much of a focus on that when we are talking about screening and validation,” Atassi said. “But what you are really trying to do more than just lock out people trying to pass fake IDs is also make sure you are passing through the good customers. When we are talking about accuracy, we are talking about both sides of that equation — keeping out the bad, but also identifying the good.”

The market is complicated, he said, and there is a wide range of needs within it. But the opportunity it holds, he said, makes it worth pursuing. And given Jumio’s level of experience in the market, the firm believes it can confidently take on the challenge.