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Aaron Rodriguez explores what FinTechs offer Mexican companies

It is undeniable that the FinTech market has grown significantly in the last decade. There are more and more options for different types of users and for each of their financial needs. In the case of Mexico, Aaron Rodriguez, an expert in the growth of this market, analyzes and explains what companies can obtain through FinTech.

On the one hand, for consumers, there are services that can include personal loans, insurance, credit cards, or personal finance advice, among others. On the other hand, for companies that require financing (the main area of opportunity for a company to grow or survive seasons of economic uncertainty), there are a plethora of financial solutions for the management of their business, digital tools for sales collection, and so on.

The difficulty no longer lies in the lack of supply. The evolution of the FinTech sector has made it possible to have access to intelligent and transparent tools for almost any of the needs we have as individuals and as companies.

“The issue now is to know what kind of solution can be adapted to these specific needs that often arise in companies. Whether at the time of starting up, in their day-to-day operations, when they want to expand or modernize equipment or facilities, or when faced with contingencies or unforeseen events that limit their liquidity and, consequently, put them at risk,” Rodriguez points out.

Regarding the range of options for FinTech companies in Mexico, the National Commission for the Protection and Defense of Financial Services Users (Condusef) highlighted that there are three categories of Financial Technology Institutions. Given the characteristics of their services, two of these categories are already regulated by the FinTech Law of the National Banking and Securities Commission (NBSC).

Firstly, and within the companies regulated by the NBSC are electronic payment funds, which are also known as “wallets” or electronic purses that serve to send and receive electronic payments. They also offer accounts and debit cards.

These can be very useful for companies that sell over the counter and require card payment or even those that operate with international transactions. Several of these include exchanges in international currencies and even cryptocurrencies.

Crowdfunding is another group of companies regulated by the FinTech Law. They are crowdfunding companies to offer financing through debt, equity, and co-ownership or royalties, for different projects. The most common financings are for real estate developments, companies in different sectors, and even for film productions and social causes.

But in addition to those already mentioned, there are also innovative models, which are financial services institutions with different modalities to those established by the FinTech Law and therefore do not require regulation or already have a previous framework and are only being optimized by technology.

This includes factoring, with platforms that allow the contracting of financing schemes based on the purchase of invoices to obtain working capital in the short term. They can work for exports or domestic sales.

“These FinTechs should not request collateral or goods in guarantee, as they do not involve debt acquisition, but a commercial transaction,” Rodriguez explains. “They usually include commercial insurance that evaluates clients and risk profiles that prevent fraud and risk of non-payment.”

Financial solutions for businesses are another important factor here. These are software applied to business management and accounting and invoicing systems, including personal finance and financial consulting.

Above all, these are platforms applied to advising individuals on financial service providers. And finally, InsurTech, platforms through which it is possible to quote and compare insurance options for different types of coverage, such as auto, major medical expenses, and commercial, among others.

“In general, one of the main advantages offered by FinTechs is that they allow for greater control of income and expenses, convenience in making payments/collections, and direct debits,” Rodriguez explains. “In addition, having more accessible insurance coverage after having compared and chosen the best option and, just like that, the possibility of comparing a wide range of possibilities.

Whichever option you choose, it is important that it shows you in a clear and transparent way the scope and limitations of its services, to perfectly know its net commissions and the conditions to acquire the financing to know if, indeed, they represent a safer, more competitive and efficient alternative.

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