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Open Spaces: FinTech in Mexico City

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Rafael Ríos
ByPor Rafael Ríos

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Historical sites are meeting points of fresh and innovative ideas that open our minds to enthusiastically receive the transformations that come with passing generations.  A few years ago, when I worked in the National Palace– guiding tourists from all parts of the world– I heard for the first time about something called “open government.” The words came from the mouth a young Argentinian woman, with Diego Rivera’s murals in the background. The synchrony is fascinating if we remember the name of this Guanajuantan painter’s monumental mural: Epopeya del Pueblo Mexicano. It has profound meaning: in order for social change to occur, it’s necessary for the working class to fight, and to await the triumph of agrarian communism. Likewise, the idea of “open government” is a political doctrine that arose after the acceptance of the free software movement’s philosophy. It aligns with principles of democracy– the more that technology advances, the more that all channels should open. It’s as if the previous generation’s ideas, which anchored their hopes in communism, now find their sustenance and success in the digital era. More and more, they are on the path towards world citizenship (considering that the web supersedes all racial, linguistic, and geographical borders), which makes transcendental decisions that affect our immediate reality through the interface of a screen. Perhaps we need to ground this fantasy a bit, which has settled in both my memory and assumptions. Well, we are going to pave the way and have a look at the joining of Finance and Technology or FinTech.

Open World

Within video games, there exists a category known as “open world.” It consists of exploring a vast virtual scene, to the rhythm and taste of each player. It makes the experience nearly infinite, in addition to enriching it.  I suppose that the openings in our reality outside of the screen imply something similar; they’re about making opportunities visible, efficient, and available to everyone. With the passage of time, it’s more and more common to add the adjective, “open,” while referring to spaces, services, and products from diverse sectors.  

Open Talks

In recent years, open talks have been an alternative to generate dialogues and effectively open certain questions that involve a form of academic endorsement, conference contracts, renting a certain space, and a long and tortuous bureaucratic process. Nothing more. In the digital era, open talks in shared working spaces, hubs like WeWork. Their registration lists are facilitated by email or online pre-registry, without greater complications. 

These talks, to a certain point informal and casual, look to give relevant, concise, and current information to diverse populations. Topics focus on the permanent transformation that scientific and technological areas imply. Without resources other than the essentials, talented speakers capture public attention and give way to new ideas or approaches, which spark a direct and instantaneous dialogue through social networks in the days following the event. It’s enough to say that, thanks to streaming, these talks have innumerable viewers; if it’s impossible to attend in person, many spectators follow the discourse from their homes, offices, or practically anywhere with an internet connection. 

Digital Economy 

According to a report that the UN presented a few months back,  the digital economy continues to evolve at a dizzying speed. “It is pushed by the capacity to collect, use, and analyze a mass volume of information that machines can assimilate (digital data) about nearly anything. This data comes from the digital footprint that personal, social, and business activities leave behind in various digital platforms.”  And most notably, “the world traffic through Internet Protocol (IP), a data flow proxy, exceeded 100 gigabytes (GB) a day in 1992, and more than 45,000 GB per second in 2017.” As if it weren’t enough, and perhaps due to the rise in data transmission speed, Mexico’s private sector is betting on (among other campaigns) something called Acceleration Programs. These offer advantages for entrepreneurs and startups on a financial basis. The field looks to mix technology and finances, with one pushing the other and vice versa. However, before running, you have to crawl, as they say. One report includes and assures: “Governments should focus less on ‘hack-a-thons’ (collaborative technological creation sessions) and boot camps (intensive and practical short-term learning courses, or on high-profile projects (like tech parks), and more on creating business tactical knowledge through mentoring programs, professional training, and internship positions.” 

The 7 Wonders of the (Technological) World 

An article recently published in the newspaper, La Jornada, affirms that the digital economy is concentrated in 70 platforms worldwide. The majority are from the United States and China, which accumulate more than $7 billion.  However, just 7 “super platforms”– Microsoft, Apple, Amazon, Google, Facebook, Tencent, and Alibaba– monopolize two-thirds of the market. And it’s exactly the digital economy based on data extraction, control, analysis, systematization, and commercialization that generates enormous earnings concentrated in the above companies. In some way, we all help to make these businesses rich, when we open their websites or use their app services and products. Our information is gold, and perhaps we never realize it. 

Open Banking

Open Banking is an operative model that allows financial institutions to exchange information, with the goal to create user-friendly products higher competition. In order for this to happen, these entities must establish app programming interfaces (APIs), the tools which exchange this information. This openness works replacing the traditional bank’s more selective function (which is also even jealous over client information).  We’ll see if it works and, above all, if it generates greater confidence in financial institutions, as they look to draw new clients through their alliance with the tech sector. And in this alliance, users will be able to do practically everything from the screens of their appliances and gadgets.  

FinTech is Law

It’s more and more common to use the term FinTech, which refers to a union between finances and technology– that is, the new way to manage money through digital resources. With Ley FinTech, Mexico turned into one of the few countries– after the UK, Australia, New Zealand, and Singapore– to have a normative brand for the open banking model. However, by including more companies than other countries, the challenge is greater. What this law basically aims to do is to regulate the operations of Tech Finance institutions and generate a climate of confidence, in order to make payments more and more effective, more and more based on digital cards. 

Open Space Mexico

Located on the Paseo de la Reforma 501, the Bilbao Vizcaya Argentaria Bank Cooperative’s tower is considered an iconic example of an intelligent building by architects and urbanists.  Many Mexicans consider it an obligatory point of reference in the west of the city, where, among other things, massive tributes have been made. One such example took place just a few weeks back, in honor of The Dark Knight.  On the 33rd floor of this emblematic building is an innovation center, a tech hub dedicated to inspiring and pushing proposals directed towards opening new FinTech paths. This open space is a constantly-improving site that offers new alternatives for any of the country’s entrepreneurial innovation ecosystem. It’s now looking to consolidate as a meeting point for distinctive initiatives, to develop technological solutions that together explore new relationships with the banking business, and find the social environment that exchanges experiences and knowledge. 

Hackathon BBVA Mexico 2019

In the BBVA Open Space, an event called Hackathon has taken place since 2016. Here, startups and entrepreneurs from around the financial tech world gather in search of a push for their projects, as well as a juicy prize for the best initiative.  This year, the event took place from September 6th through 8th. Programmers, financial designers, market analysts, data scientists, university students, and more all gathered. 1,548 total applications were received, and 617 young people participated. Of those, 124 were women, and 493 were men.  In the same way, 125 teams in total were formed to work on 7 challenges: 4 for BBVA and 3 for its alliances in the event (Accenture, Global Hitss, and GBAC-IFC). A prize went to the team that best used CISCO technology. More, 230 mentors collaborated, of which 122 were from BBVA Mexico and 108 of the FinTech community.  

And the winner is…

This year’s Hackathon winner was one of the teams that participated in the BBVA-Categorizador Enterprise challenge, a formation of 3 young men who found a solution for this challenge. The goal was to construct a mechanism using machine learning to automatically categorize a business’s banking movements, and to analyze cash flow. “We are the ‘taquito software’ team and we’re very pleased. This prize means that our job during these three days has been worth it, and we are happy,” commented Antonio Herrera, one of the winning team’s members.

Who really wins?

There is still a long way towards the acceptance of digital finances in our country.  For now, the panorama seems encouraging and tends towards modifying itself towards the end of the year. It also looks to prove the efficiency of the new systems that, apparently, facilitate large worldwide companies’ financial maneuvers– even including the purchase of a kilo of tortillas in the outskirts of popular neighborhoods.  The true winner, in my judgment, is the technological path. Its continuous advancements grant it total autonomy with respect to our changing and turbulent human emotions. Right now, while I write these lines, a march in commemoration of the violent student repression of Mexico in 1968 nears the political heard of Mexico City: El Zócalo. Some businesses and establishments have closed to avoid damages and vandalism. In many nearby offices, the employees have left early to arrive at their houses in good time. However, FinTech offices, foreign to this human tendency, are moving in their own commemorative march: they celebrate their victory over the previous century’s economy with victories of algorithms and programming.