Digital Coins to Fight CorruptionBy Sofía Hanna | Thu, 07/22/2021 - 17:20
This week, MBN Startup Contributors Cristian Huertas, Country Manager of Bnext, and Iñigo Rumayor, Co-Founder and Co-CEO Arcus Financial Intelligence, discussed the advances of digitalization in finance and what the future will look like. Also, INEGI announced that industrial activity significantly improved during 2Q2021 but services declined. Finally, digital contracts are gaining strength in the business world given all the facilities they represent, but the question is whether everyone will adopt this format.
Interested in more? Here are the week’s major headlines in Finance!
- Cristian Huertas, Country Manager of Bnext, discussed with MBN the role of digital coins in the fight against corruption and organized crime, which seems increasingly difficult. However, these challenges could be tackled by the implementation of several fintech technologies, which would give back tens of percentage points to the country’s GDP and allow for a real economic transformation. A digital peso would allow Mexicans to have accounts directly with the central bank, explains Huertas. The money to lend would also come from the central bank and not from retail customers, making banks accountable to the government. The money would also flow to those with the best risk models, allowing many fintech companies to fully compete with traditional banks as a license to intermediate would no longer be needed. Financial inclusion would be accelerated because fintech companies, thanks to their investments in alternative credit scoring, are more eager to lend to the “riskier” population. The most important element to make this happen, argued Huertas, is the will of the Mexican government to adopt technology and work hand in hand with the industry. “Mexico can take advantage of these and make the leap to a developed economy. Let’s push for a place for this in this government’s agenda,” wrote Huertas.
- INEGI’s Timely Indicator of Economic Activity (IGAE) shows a considerable improvement in the performance of industrial activities but a decline in services. Given these results, experts at Banorte forecast a further increase in economic activity but the panorama remains complex given the pandemic. “The estimates imply a 20.2 percent year-over-year advance for the IGAE during 2Q2021, slightly less than our current GDP estimate of 20.3 percent, suggesting greater challenges at the end of the period and early third quarter.” Following the “modest” advance seen in June, Banorte estimates a growth of 14.7 percent year-over-year (between 13.4 percent and 16.1 percent), which would result in a 0.3 percent growth month-over-month. “Specifically, we think that part of the moderation could be associated with a more complicated base effect. In addition, we believe that problems in the supply chains continued to affect the industry,” explained Banorte.
- Iñigo Rumayor, Co-Founder and Co-CEO Arcus Financial Intelligence and an MBN Startup Contributor, shared how the digital transformation is prompting the future of business. Rumayor mentions that 2020 was the perfect catalyst for many industries, including tech. “We are now living in an era where the prevalence of apps, payments, AI and bots will embed digitalization into everyone’s lives, improving it; in other words, technology is here to stay and companies will either adopt it, become irrelevant, or cease to exist,” wrote Rumayor.
- Digital contracts reduce costs of transportation, raw materials and physical storage. In a digitized world, storage is found in the cloud. The real estate industry has experienced one of the biggest changes since the pandemic began. With entire projects modifying their focus to include more recreational areas that aim to replace tight workspaces, it is expected that contracts will change from traditional means to digital ones. This process will continue and it will leave traditional contract processes behind as the world moves towards a more digitized format.