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What: Ivan Barona Gonzalez, Head of Business Intelligence at Grupo Bursátil Mexicano, gave Portada Mexico a bird’s eye view of Mexico’s consumer finance and banking landscape.
Why it matters: Barona explains why GBM has chosen education and attraction over pure product promotion to attract new customers in the face of Mexico’s low rate of consumer use of banking and financial services.

Mexico’s unbanked population poses both challenges and opportunities to banks and financial services companies looking for new customers.

According to Ivan Barona Gonzalez, Head of Business Intelligence at Grupo Bursátil Mexicano, roughly 76 million Mexicans—about forty-percent of adults between the ages of 18 and 70—don’t have a bank account. Forty-six percent do not have access to formal credit and fifty-two percent don’t have formal retirement accounts.

The challenge for GBM is how to turn this landscape of the unbanked into a land of opportunity for financial services.

“We try to educate people,” Barona told participants at last month’s Portada México in Mexico City. “Given the needs of the Mexican market, we consider that financial education plays an important opportunity.”

“People should, first and foremost know that they have choices, and then make the best choices according to their needs.”

GBM is an investment bank with more than 35 years of experience and is currently the largest in Mexico as measured by traded volume on the Mexican stock exchange.

GBM’s parent owner, Corporativo GBM, operates subsidiaries in México, Brazil, Chile and the U.S. Three decades of experience in the Mexican market have made GBM an authoritative brand in Mexico’s investment industry.

The story is not about us, it is about what you can become with our services and products.

But the focus of GBM’s marketing isn’t on its reputation. Instead, the focus is on how customers can benefit from its products and services.

“The story is not about us, it is about what you can become with our services and products,” Barona told Portada Mexico.

Focus on the consumer

According to Barona, GBM marketing is focused on markets (what’s happening), knowledge (what should I know or learn?) and lifestyle (why is it important for me, what can I do with this?).

One example is GBM’s recent “Piggo” campaign.

The Piggo website offers consumers a downloadable app they can use to plan savings for a trip to Europe, a new car or any other important goal.

The app helps users to define their goals and the money they would like to save to reach them, and then creates a schedule of savings through automatic deposits so users can “save without realizing it.”

A Piggo challenge encouraged users to post pictures of their travel experiences on social media.

“We identified that money can be considered as primitive…but it gives you the freedom to connect with your hopes, wishes, and goals,” Barona explained.

We identified that money can be considered as primitive…but it gives you the freedom to connect with your hopes, wishes, and goals.

The campaign isn’t as much about selling a product as it is about how people can succeed in savings,” Barona told Portada Mexico.

“The campaign was addressed for a demographic that was eager to travel the world, and aimed for empathy and virality.”

For an opportunity to participate in thought-provoking panels and a chance to network with the leading brand marketers in Latin America, join Portada Mexico 2019 here.

 

Big potential

In a question and answer session following his presentation, Barona emphasized the potential GBM sees in the vast numbers of Mexicans who don’t have savings, investment or retirement accounts.

Two-thirds of Mexicans do save, but through informal means. While in the US, six out of every 10 Americans invest in the stock market, in Mexico the ratio is 1 to 500.

Meanwhile, advances in technology have lowered the cost of extending existing financial infrastructure to serve new customers.

“Technology is usually capital expensive on the early stages, however, once you reach a specific size, and surpass the breakeven, you can get new customers on a marginal or even negligible cost, thus, achieving exponential returns,” Barona told Portada.

“We are aware of the potential in the market,” he said.

What: Waleteros.com, a new mobile app that works like a pre-paid debit card with services such as mobile check deposits, direct deposits, peer-to-peer payments, bill payment, cash withdrawal and a platform for online purchases.
Why it Matters: This digital financial solution could be game-changing for Latinos in the United States, who make up a large percentage of the nearly 60 million Americans without a bank account. Waleteros.com is led by Sergio Carrera, former General Manager of Televisa in the United States.

Text written by Gretchen Gardner, member of Portada’s editorial team.

Underbanked: While you may not have heard word before, it’s an all-too-common phenomenon in America. According to the FDIC, an “underbanked” household “holds a bank account, but also relies on alternative financial services providers.” This often means no credit card, and a high reliance on inefficient and costly alternatives like
check-cashing stores. But luckily, digital payment platforms and online banking are transforming the way people access and use money, a trend that stands to benefit underbanked communities enormously. In the United States, Latinos make up a large percentage of the nearly 60 million people without a bank account. So could technology change all of this?

There’s An App for That

To learn more, wwaleterose sat down with Sergio Carrera, former general manager for US operations at Editorial Televisa, to get the scoop on his new mobile app, Waleteros.com, which functions like a pre-paid debit card and is set to provide basic financial services to a huge amount of Hispanic Americans.

Here’s how it works: “Waleteros is a mobile app linked to a prepaid MasterCard that aims to empower the millions of underbanked Latinos in the US by offering financial services such as mobile check deposits, direct deposits, peer-to-peer payments, bill payment, cash withdrawal and a platform for online purchases,” Carrera explained.

Users do have to get a physical card – either at one of their 60 distribution points in South Florida, or through a self-registration process available upon downloading the app that prompts the company to send a card in the mail.

Our conversation with Carrera left it clear that one of the biggest priorities for Waleteros is that it help Latinos live comfortably, save and conduct financial transactions, as he repeatedly made reference to the company as an “ultra-transparent financial solution.” He reminded us that according to the FDIC, 50% of Hispanic Americans are considered “underbanked,” which means that there is huge room for growth in the market.

And the Fees?

And Carrera and his team are adamant about keeping the fees to a minimum. “We don’t charge activation, monthly or inactivity fees like most other pre-paid cards do. Receiving a direct deposit from an employee or benefits provider is completely free of charge and we work with a network of 2400 surcharge-free ATMs.” Users can even use the app to find the nearest ATM.  And even cashing or depositing a check is free, as long as the user is okay with waiting a few days for the money to be deposited. In urgent cases, a small fee is in place to rush the transaction. The only other fee comes out to US $0.75 to send money to other Waleteros users.

Sergio Carrera, Co-CEO of Waleteros.com
Sergio Carrera, Co-CEO of Waleteros.com

Interestingly, Carrera and his team have also found a way to cater to the uniqueness of the Latino market through their B2B strategy of partnering with merchants and businesses that are in close touch with their target audience. “We reach out to different companies that are servicing the Hispanic community and that will benefit from offering our product to their existing client base,” Carrera said. The Waleteros team is even creating agreements with the significant Hispanic Christian community, “offering a personalized, digital product to Christian churches that are looking for a faster, more convenient and cost-effective way to receive donations.”

Positioned for Growth

Planning to close seed-funding in the second quarter of 2015, so far, Waleteros’s lead investor has been AGP, an angel investment network based in Miami. “For our next round, we will be looking for partners with experience investing in the Financial Technology space,” he says, and in a payment industry that “is undergoing tremendous changes,” they should be well-positioned for growth, as Carreras’ co-founders have worked in both the electronic payment and financial sectors, Carreras himself having worked at Merrill Lynch and served as the CFO at a publishing company. Waleteros expects to have 5,000 active users by the end of the year, a goal that doesn’t seem unfeasible considering the potential impact of its services.