Collaborative Innovation, Regulation: 2023 Fintech Imperatives

The notable shift from competition to collaboration throughout the Latin American financial services scene is the driver of innovation and positive disruption the sector has experienced over the past few years. Nowhere is this more evident than at a recent session where I led a panel discussion with two Galileo partners and outstanding members of the Mexican fintech ecosystem, Pamela Soto, Founder and Partner at Orbi, and Gerardo Horta, Chief Revenue Officer (CRO)/Head of Business Development, Fundación Dondé Banco.

The session, entitled “The Balance between Innovation and Regulation,” generated interaction from those on the stage and the audience around commonly accepted views on the value of collaboration in generating new ideas, new market players, and driving better solutions for consumers and businesses. 

The topic of regulation, however, proved to be the most interesting and spicy aspect of the discussion, given the underlying and significant need to address safety and security in fintech. It became clear to all participants that our three companies, Galileo F-T, Orbi and Banco Fundación Dondé, operate on the belief that regulation is key to creating trust and confidence in fintech in general.

Within this panel discussion and subsequent audience interaction several core concepts emerged, giving us a view of what to expect in 2023 and beyond. 

1. Embracing regulatory compliance and affiliation between fintech and traditional entities (such as banks) is likely to be the secret to fueling mass adoption of financial innovation. The market is looking for new ways to conduct financial operations, and diverse products and solutions are key to breaking out of the inertia still found in some service areas. While consumers and merchants have opened up to digital innovation, there is still an underlying need to build greater trust and confidence. 

2. The flexibility and speed to market demanded by Latin Americans can only be reliably achieved through collaboration. Keeping up with a more developed market or even leapfrogging ahead in many instances demands secure, fast, accessible, and scalable solutions.

Within the fintech ecosystem, technology suppliers plus digital and traditional banks add particular advantages for each player. This is the case with the three participants in our panel coming together in a powerful collaboration mode that provides greater financial control and flexibility for a broad range of consumers and SMBs. 

The payment solution  will be launched by Orbi, powered by Dondé, and is based on Galileo’s embedded technology. Its power is derived from reputation, experience, and infrastructure that each company contributes in its own way.

3. It will become increasingly essential to enable diverse types of use cases for holding a diversity of stored value options. Users across different geographies will increasingly be looking to store, monitor, manage, trade, and transmit a diversity of options. Galileo does not own, store, or interact with currencies, but, rather, offers a suite of robust APIs that enables a variety of stored value offerings. 

Certain markets in Latin America, will be more prone to seeking various options to hedge against currency fluctuations or restrictions. In this use case, the entity will also benefit from partnering with the sponsor bank that provides the assurance of being with a regulated institution. 

As 2023 gets under way, it pays to remember that despite market turbulence, duplicity and outright fraud sometimes threaten to stifle innovation and suppress adoption of financial innovation. Latin America is still a huge, young, and underserved financial services market. So, in this sense, far from derailing progress, the events of the past months have simply shown us that strong regulation and focus on compliance is fundamental to our industry and its future. 

About Tory Jackson

As Head of Business Development and Strategy for Latin America, Tory Jackson oversees Galileo’s expansion and strategy throughout the region. Jackson partners with local, regional and international financial service providers to use Galileo’s sophisticated API-based platform as an enabling layer of technology to create powerful banking solutions that increase financial access and inclusion for the region’s people and businesses.

With more than 10 years at Galileo, Jackson has served in a number of senior roles, including Country Manager for Mexico, where he partnered with leading fintechs like Klar and Ualá. Before that, he led development of new geographic markets and served as a UX and product designer.

Jackson currently lives in Mexico City with his wife and sons. A graduate of the University of Utah, Jackson speaks English and Spanish, and previously lived in Cuernavaca, Mexico. He is an active member of The Galileo Foundation, which works to empower those in economic need.

About Galileo Financial Technologies

Galileo is a leading financial technology company whose platform, open API technology and proven expertise enable fintechs, emerging and established brands to create differentiated financial solutions that expand the financial frontier. Galileo removes the complexity from payments and financial services innovation by providing flexible, open API building blocks and a secure, scalable, future-proof platform. Trusted by digital banking heavyweights, early stage innovators and enterprise clients alike, Galileo supports issuing physical and virtual payment cards, mobile push provisioning and more, across industries and geographies. Headquartered in Salt Lake City, Galileo has offices in Mexico City, New York City, San Francisco and Seattle.