In a new International Banker op-ed titled “Why Responsible Finance Institutions Should Embrace ‘Uberization‘”, FINCA Impact Finance (FIF) President & CEO Andree Simon discusses one of the 2019’s biggest fintech trends–partnerships between banks and fintechs, including peer-to-peer (P2P) platforms.
Simon recognizes that competition from P2P platforms is making life more difficult for many traditional financial institutions. The market is being profoundly disrupted, and banks need to adapt to survive.
That’s only one side of the coin, however. The other side? There are opportunities for banks and P2P platforms to collaborate, finding better ways to provide financial services that improve people’s lives. Writes Simon:
“As the financial services industry continues to be transformed by technological innovation, financial institutions are facing new pressures. One way to respond is to compete against the sharing economy, providing more flexible, lower-cost financial products able to meet the needs of a more sophisticated marketplace. The financial institutions that remain competitive in the coming years will succeed in doing exactly that.
Another way to respond is to harness the power of the sharing economy wherever possible, to establish new partnerships […] that benefit all parties while providing people with financial products and services that can make a positive difference in their lives. These two approaches to responding to the sharing economy are complementary, not binary, choices.”
Partnering with P2P Platforms in Guatemala
Discussing 2019’s biggest fintech trends within FIF, Simon highlights FIF’s recent initiative in Guatemala, where FINCA Guatemala–one of 20 banks and microfinance institutions that make up the FIF network–is partnering with Uber Guatemala to offer a cutting-edge loan product to local Uber drivers.
FINCA Guatemala’s loan application form is directly integrated into the Uber online dashboard. This allows drivers to apply for a loan using only their driving history, and allows FINCA Guatemala to process loan applications in just hours. While not a fintech itself, Uber is able to apply its mobile-centric business model to helping FIF expand financial inclusion in Guatemala.