Conference Presentation, Panel
Fulfilling FinTech’s Promise | Global Investors' Symposium Mexico City 2024
Milken InstituteMichael Piwowar, Adolfo Babatz, Marlene Garayzar, Heath Tarbert, Mike Pivovar, Rodrigo Bettini
- The Milken Institute plans to utilize dedicated sessions to inform responsible innovation policies that empower individuals and businesses.
- Electronic payment methods are predicted to increasingly displace cash globally, moving nations away from cash-based societies.
- The transition away from cash is expected to reduce risks related to money laundering, improve rule of law enforcement, and eliminate high costs associated with cash handling, such as robbery and ATM deployment.
- In Mexico, introducing competition in the payment sector is anticipated to force companies to develop better products and achieve massive distribution, breaking current oligopolistic restrictions.
- Enforcement of antitrust and competition laws in Mexico is expected to benefit the entire economy, extending gains to telecom, medications, distribution, and energy sectors.
- Financial institutions plan to achieve a 99% acceptance rate among underserved customers by providing first access to credit followed by financial education and responsible guidance to mitigate delinquency risk.
- A financial education bot utilizing AI and World Bank models is scheduled for launch during the upcoming "financial education week" to scale inclusion efforts.
- Financial education is intended to be embedded into product design through timely reminders for bill due dates and cut-off days to promote savings and responsible credit use.
- An ecosystem is planned to eventually help customers manage day-to-day needs such as paying bills and topping up phones, positioning the provider as a comprehensive service for the Mexican population.
- Banking and financial systems are predicted to merge with the Internet to become "on-chain," a transition estimated to take approximately a decade.
- Stablecoins are expected to revolutionize cross-border remittances and emergency fund distribution by enabling money movement over the internet as efficiently as sending an email.
- The lack of regulation in digital assets currently causes investor fear, creating a need for a unified global framework to recognize stablecoins across borders like Mexico and the US.
- The US and Mexico are expected to adopt regulatory frameworks similar to those in Singapore, Japan, and Brazil to catch up with technological advancements and foster responsible innovation.
- As regulations evolve, companies like Circle may need to proactively impose stricter standards, such as transparent reserve listings, to align with future legal expectations.
- Mexico is advised to look to successful emerging market models in Brazil and India to determine the best path for its financial ecosystem, avoiding a combination of the "worst of both worlds."
- While Mexico's regulatory framework is considered "well-regulated" on paper, the primary barriers to digital payment growth are identified as the application of laws and a lack of enforcement regarding competition.
- The pace of new regulations is described as "so slow" compared to digital advancement, which has hindered innovation, though regulators are viewed as open to working with serious founders.
- Regulators globally are expected to be at least five to ten years behind technology, requiring constant effort to close that gap.
- The vast majority of merchants currently using only cash are expected to move to digital payments once competition drives down costs and improves product accessibility.
- Customer base growth is planned by guiding clients from credit access to savings and leveraging data to provide specific solutions for different customer types.
- The integration of banking and financial systems with the Internet is expected to create a new financial layer where value can be transferred instantly across borders without traditional banking intermediaries.