Editor's Choice Fintech South America

Em Conversa: Banking as a Service with NovoPayment

Em Conversa looks to uncover the secrets in Latin America (LatAm) that have caused the fintech market to boom, from being worth less than $50million in 2016, to $2.1billion in 2022. This week we spoke to Anabel Perez, president and CEO of Miami-based, NovoPayment, to understand the importance of banking as a service (BaaS) in a growing region. 

Anabel Perez, president and CEO, NovoPayment
Anabel Perez, president and CEO, NovoPayment

NovoPayment, an organisation in the area of BaaS platforms across the Americas, enables digital financial and transactional services in support of varied use cases. The company’s bank-grade solutions use APIs and other flexible delivery models to help banks, financial institutions, merchants, networks, marketplaces, neo banks and other financial service providers to leverage their existing systems to generate new deposits, transaction streams and customer experiences. Anabel Perez, the company CEO and president, is a member of the Forbes Finance Council, an endeavor entrepreneur, and the first Hispanic-American woman recipient of the Paybefore Industry Achievement Award for her contributions to the payments space and financial inclusion, Perez is relentless in her pursuit of finding ways to take financial services to new places and moments in people’s lives.

She has expanded the NovoPayment’s reach to six countries and more than 72 deployments, touching +10,000 corporate platform users and 2.5 million end users across the Americas.

To further understand how the platform could benefit LatAm as well as the impact BaaS has had on the region more generally, Perez sat down with The Fintech Times:

Can you tell me about the company and your role within it?

I’m Anabel Perez, co-founder and CEO of NovoPayment. We are a banking as a service provider, enabling both incumbents and disruptors alike to build and deploy new financial and payment use cases. Typically, our clients are large financial institutions, small banks, and neobanks. We serve acquirers as well as enterprises that are very interested in the concept of embedded finance. We have a variety of services that make us unique: we have data banking, payment, and infrastructure solutions, so you can build an entire neobank with us or we can help anyone in the space complement their tech stack, allowing them to compete and/or enter into a new segment or expand into a new geography. The company serves the US and LatAm – with our platform being fully integrated in 14 markets.

Any payments or neobank looking to expand into the US or Latin, we’ll make sure we find them the right partner to complete payments faster and more efficiently while complying with regulations.

How has banking as a service evolved in LatAm?

Banking as a service, as a sector is playing a critical role in creating neobanks and in turn fintech unicorns across the region. We embed financial API’s within critical business processes – not only within banks, but also within the clients the bank serves. So banking as a service has become the invisible engine, and the big enabler for new innovation models.

Of course, markets have adopted it differently. Certain markets are more familiar with the concept of externalisation of IT components, especially in regard to the cloud. Other markets are following the movement in a very progressive way, adopting the formula to complement traditional tech stack with cloud based financial and payment tech stacks.

What are some trends you’ve seen in the LatAm market?

There have been various trends. The most important one has been, many fintechs have built innovative solutions to fill empty gaps that the traditional incumbents have left, across various verticals: in data lending, including Buy now pay later; acquiring new customers, many new banks have focused on capturing underbanked and unbanked population; financial super apps, offered by lifestyle apps or merchant apps in which you can find not only financial products but also other types of services including entertainment.

There has also been a lot of adoption of remote, secure commerce, thanks to the hard work of many payment facilitators. The LatAm market loves to buy online, so we have seen a lot of expansion and adoption in data transactions and in the payments space as well. Many markets have adopted NFC – proximity payments were generally more for typical transit-type use cases, but today it’s been amplified to almost any type of transaction.

What have been some of the biggest challenges NovoPayment has faced when expanding?

Since our inception, the company’s goal was to go global, and rapidly digitise the Americas. We were born during a great moment, the conversion to cloud technology, API technology and mobile tech gave us the opportunity to expand.

I created a playbook for expansion, with our clients being the driving force of that expansion. We have a policy that we don’t enter into new market unless we have a client there or we work collaboratively with a partner. So from Miami, we expanded to Peru, to Colombia, to Mexico, Venezuela and more. We’re active in the Caribbean and Central America as well.

Part of the hard work in what we have been doing, is that it is very difficult to implement, not only the platform in 14 markets, but we also have to do a lot of localised integrations. So for example, if you are an EU, UK, fintech or bank that wants to expand into LatAm or the US, once you connect to NovoPayment, you are connected to the entire region. And this is not a marketing marketing phrase. It’s a fact: we have been able to integrate with a local financial payment ecosystem in each of the markets in which we are currently delivering services.

So in terms of challenges, as I mentioned, the LatAm market is very fragmented with different regulations. Regardless of this, financial services follow the best practices in terms of data security, data integrity, and availability and reliability of services. We have been following the highest standard since our inception. That’s why we have been able to gain regulatory approval in the majority of the market. The challenge has always been in a how to maintain growth while following the best practices and standards.

What do NovoPayment’s roadmap and growth plan look like?

Nonstop work in our existing markets! There’s still space for us to improve. In the markets we have already conducted all the integrations, our customers love us, so they want to work and expand their operations with us. We are now dedicating additional resources to support a key strategic account, helping our clients to navigate their journeys and of course, expanding here in the US, where there is also a huge opportunity, especially within the segment of community banks and credit unions.

Part of the reason that I visited the UK and London recently was that we want to start expanding into that market as well. I wanted to introduce NovoPayment as a trusted partner, for those fintechs that are ambitious to go global. You don’t need to replicate what you have done in your country abroad because you can use our platform as an extension of your native platform in order to be able to reach new markets and segments.

What will need to happen to ensure the LatAm boom is not a trend but continues to see ongoing success?

I believe it will be a continuous trend because as I mentioned, we are a population that is fully connected to the internet, which is a demographic that also represents a huge opportunity. Many remote workers are based in LatAm providing services to global companies, exposing them to our players as well.

We have more cities in LatAm with more than one million inhabitants when compared to the United States, so as you can imagine, the opportunity for many models to flourish, in particular in the gig economy, or the delivery, urban mobility space. These are facts that will enable the region to continue to grow and innovate.

Convenience and timesaving are extremely strong driving forces to adopt convergent technologies, in particular in financial services and the payments space, so you will continue to see more than before. More technology inclusion, more financial inclusion, and more examples of innovation from LatAm to the rest of the world.

Author

  • Francis is a journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

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