Portfolio company Oyster's founder & CEO - Vilash Poovala - shares his thoughts on the conditions affecting the pace at which challenger banks will rise in Latin America.
In financial services, the concept of “know your customer” (KYC) is at the heart of establishing trusted relationships with clientele and strategic partners, while ensuring the integrity of the transaction itself. KYC also ensures that those companies they transact with are not involved with corruption, bribery or money laundering. Banks in Mexico must be particularly vigilant when it comes to verifying who qualifies as an “ultimate beneficial owner” (UBO) of a given business. A lack of uniformity across institutional processes makes it extremely tedious and slow to do a full KYC verification in Mexico for every UBO, unless the person requesting the business account owns 100 percent of the company. Neobanks are clearly here to stay, with some estimates that neobanks have now grown to 60 million customers in North America and Europe, and will surpass 145 million by 2024. Those that provide robust KYC-validation systems are essential to growing customer confidence in digital banking and conducting global business at the speed of trust. As leadership guru and author Stephen M.R. Covey wrote: “A person has integrity when there is no gap between intent and behavior … when he or she is whole, seamless, the same — inside and out. I call this “congruence.” And it is congruence — not compliance — that ultimately creates trust.”