Fintech Trends in Emerging Markets

April 2022

We sat down with Oyster Financial’s Vilash Poovala to discuss trends in fintech, his area of expertise.

What about Mexico makes it unique for fintech operators?

Mexico has one of the most idiosyncratic markets because of the way the banks have created this nice fence around banking and payments. In that way, it’s made it more difficult for newer competitors, and they need to have deep knowledge about the space. Mexico is North America first, before you consider it to be LatAm.

Mexico is probably the biggest consumer of US football outside of the US. So when I look at what a Mexican individual aspires to be, they look more to their neighbor to the north. The other thing is, Mexico’s always been the real “creator economy” — way before that term became cool. That’s the only way they’ve kept families together, via side hustles.

What are the next big frontiers in LatAm?

Insurtech is a big area. Look at something like Coya in Germany that recently got acquired; I’m looking at “who’s the Coya?” in LatAm, where the insurance market is even bigger. An example is Cardiff and unemployment insurance or Aflac, which is available in the US to sole proprietors. No one is building that ability to bring that to the mass market — it’s simply unheard of. Recently, what I’ve noticed is there’s been a lot of advances around working with employers to offer better benefits, and certain companies are starting to make inroads. But I think that’s the early wave and there’s a bigger insurtech wave that is bound to happen.

Fintech trends that you’re excited about LatAm and globally?

I know this is everyone’s buzzword right now to talk about crypto, and … to say we’re in the payments business and don’t care about crypto is kind of crazy. I think the way we look at it is: How do we use crypto to better enable the movement of money and ease some of the pain points around the classic infrastructure of payments? A stable coin represents the ability to go around classic infrastructure that blocks transfers of money, while still making sure recipients of the money get that ownership, while also monetizing on those recipients when they want to exchange the stable coin into currency. Real money, fiat [money], needs to move through a bank and clearinghouse, which means we ultimately have to be reliant on how good those clearinghouses are. Is it available? Can it robustly handle our transactions? But when you look at something like crypto, it’s inherently easy for us to transfer possession while still making it very safe for traceability — to ultimately know that the actions converting crypto to fiat are still being monetized.

I think crypto is most likely an intracountry play [i.e., within a country]. A lot of people think crypto for intercountry is great, which I don’t necessarily disagree with. Fundamentally, there’s a lot of improvement that can be done within, in terms of moving money and decentralized finance, which I think is huge when you look at the next wave of lending that can happen with DeFi. I think it’s a really big opportunity.