José María Zas
President And Director General
American Express In Latin America And The Caribbean
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Insight

In the Digitalization Driver’s Seat

Tue, 03/06/2018 - 18:19

The rise of the middle class in Mexico has inspired and challenged companies to provide better services while adapting to the digital era, says José María Zas, President and General Director of American Express in Latin America and the Caribbean, adding that one of the country’s biggest problems, the informal economy, is also an opportunity. “In Mexico, only 10 percent of all product and service consumption is paid by card. However, this weakness can become a financial opportunity; in other Latin American countries this figure is 30 percent,” says Zas.
To meet the financial demand of the Mexican market, American Express offers a diverse portfolio of products and services, such as personal credit cards, corporate cards, reward programs, travel services and a global network to complete the financial experience. “No one among our competition can replicate the services we provide on a financial level. Most competitors have a local reach, while our company has international connections,” says Zas. “The relationship with the client is based on world-class assistance. The company supports its clients wherever they go.”
The informal economy impacts the financial sector in different ways, according to Zas. First, fewer stores are willing to accept cards because there is not a great deal of demand for card-payment services. Second, a large percentage of the Mexican population does not have a bank account. Third, the percentage of purchases made with a card is low compared to other countries. “An increase in card users would go a long way to formalizing the national economy, improving equity in tax collection, improving security measures and boosting investment in sectors like health, education and transportation,” he suggests. This could also open opportunities for people to have a better financial education and to understand how contributions to the Tax Administration Service (SAT) can improve benefits and contribute to economic growth.
The fintech industry can play an integral role in this process, Zas says. According to a 2018 report on the Regulatory Sandbox in LATAM and Caribbean for the Fintech Ecosystem and the Financial System by the InterAmerican Development Bank, the fintech industry has been growing rapidly in Latin America and it has become the ideal mechanism to improve financial inclusivity in the region. The report also states that there are around 700 platforms in the region that offer digital financial services and Mexico owns 25.6 percent of these.
Zas believes the digital transformation in Mexico is boosting communication between government, banking institutions and fintech developers to help improve inefficiencies in the financial sector. “The relationship between technology and financial services is constantly evolving. The greatest outcome is the ability to reinvent services and products to address the changing needs of the customer,” he says.
The challenges of the technological era are not overtly clear but this uncertainty opens opportunities for new products and services. Meanwhile, fintech companies will continue to position themselves in the financial market as catalysts for digital change and drivers of innovation in traditional industries. In March 2018, the Fintech Act was approved with 145 articles to regulate crowdfunding companies, virtual currencies and electronic payments, according to the report in the Act to Regulate Institutions of Financial Technology published in the Official Journal of the Federation.
American Express is expanding at great speed thanks to innovative products with new payment structures, such as the American Express Platinum credit card and the American Express Gold cards, Zas says. “The Mexican market and consumers in the financial sector are spurring demand for digitalized services. American Express’s renewed vision is to provide the best consumer experience every day, showcasing how the company has changed.”