What Jumps Out: A Brave New World

The last few days have featured the 2021 version of the Colombian Investment Summit and there has been plenty to reflect on.

As opposed to the 2020 story, which was completely overshadowed by COVID with both government and companies explaining how they had survived the pandemic and what were the next steps, this time there was a more optimistic tale to tell. Colombia has bounced back economically at an unexpected rate with analysts constantly upgrading their GDP targets for both 2021 and 2022 – on a global basis the country looks set to be a top 10 performer this year.

This is now being manifested with a change in the interest cycle as inflation slowly rises; however, within reason, this is a good problem to have. On top of this the 2022 budget has now been approved and the problematic tax reform is now in place – in fact a lot of positive messages to share.

Within the event the BVC traditionally hosts a panel however this time we chose to go non-traditional. As opposed to the blue-chip names who have had so much digital exposure during the pandemic, we opted to take a look at the Brave New Digital World that is rapidly arriving on Colombia’s doorstep.

Rupert’s opinions & analysis as an independent expert contributor are his own and not necessarily those of Finance Colombia or the BVC.

The panel featured Rappi, Lulo Bank, TRII and our own a2censo discussing disruptive behavior in their respective sectors, whether it be Digital Banking, Trading Platforms or Crowd-Funding. The important message from all four entities was that the priority is the end user, be it retail or institutional – it was good to hear that the Superfinanciera are on message. There was a call for more government support in the field of open banking but in general there has been good support.

But of course, these four entities are simply the tip of an iceberg that is emerging quickly from the Colombian waters. Even before the World Economic Forum named Colombia (Medellin) as the LATAM center for the 4th Industrial Revolution, this country was a hub for technology development. A few years ago I had occasion to meet with one of the world’s leading satellite suppliers on a visit to Medellin, I asked if there was any interest in Colombia in making a purchase – the answer was revealing:

“They have no budget to buy one but in reality, this is one of the few countries I have visited that are capable of building their own satellite”

Over the past two years we have seen a host of new names appear in the Colombian digital ecosystem – perhaps best known is Nubank but others are constantly appearing such as Iris Bank or Avista. I even had occasion to sit down recently with a ‘Second-Life’ company dedicating themselves to education.

“…in reality, this is one of the few countries I have visited that are capable of building their own satellite”

As mentioned above, the challenge still for many is ‘Open Banking’ – the willingness for institutions to share data for the good of the end client but this is something that is not confined to the banking sector.

At a time when Brazil has thousands of independent advisers creating a cross pollination of product for the man on the street, in Colombia there is still resistance to such moves, open architecture is a watchword in many markets, but for the time being it remains only an aspiration in Colombia.

Nonetheless these are exciting times for the Colombian digital universe, be it banking, trading, libranzas or crowdfunding, the world is changing, and the end beneficiary will be the clients, either directly via the new entities or indirectly as the legacy actors are forced to adapt.

That is about it for today – remember these are just themes that jump out at me – please refer to your local analyst, economist, salesperson or soothsayer for more details.

My regards to all,

Roops

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