Innovation Blog

MC Golden Winner alumni JosAndr Chez from…

By JosAndr Chez –  OO Bayonet
MC Mexico
GOLDEN Winner 2016

Before closing the year, we would like to share some perspectives regarding (i) the FinTech industry events in Mexico (ii) how the global context has impacted the industry, (iii) the role FinTech plays worldwide and in Mexico, and (iv) an outlook on what is coming up for Bayonet.

Lets start by setting into context the economic, political, and technological perspectives given that these are elements that impact the industry directly:

1. Political / Economic: After the announcement of Donald Trumps victory as elected US President, the price of Bitcoin went up considerably, and basically overnight. It was feasible to appreciate how this currency gains trust among projections of possible unstable international outlooks.

In addition, the recent demonetization in India and Venezuela affected the trust in government controlled currency and has enabled different alternatives to gain speed; for example, the case of Paytm in India. Given that other countries are considering to adopt similar policies of demonetization, it seems like the terrain will remain fertile for FinTech companies.

It is evident that what is going on in this scene will continue to affect, for better or worse, the FinTech ecosystem.

2. Blockchain: Experts have projected how this technology will impact the world in equal or higher proportions than the Internet has; my recommendation for all of us interested in FinTech is to read daily about whats going on with this technology.

Quoting Don and Alexander Tapscotts book Blockchain Revolution, the Internet is entering a second era that promises change and improvement to this failed state that is currently the Internet (quoting John Naughton in this article Has the internet become a failed state?)

3. Quantic Computers: After the adoption of these machines, many of the current methods of security and encrypting at the Web or Banking will become obsolete. Therefore, we listen to the term QuantumResistant Cryptography much more frequently.

These subjects are, without a doubt, modifying the current scenery and therefore, will continue doing so.

Just like the previously mentioned, there are undoubtedly a great number of other phenomena that will impact. From our point of view, there is an equal amount of challenges and opportunities for this industry. In Mexico, we are living a very interesting moment: companies are becoming more mature, new companies are getting born, and there is a growing synergy between Banks and startups. This is the case of BBVA Bancomer, the bank that recently announced the acquisition of the payment processor OpenPay.

This is undoubtedly generating a promising momentum.

We are thrilled to be witnessing how Mexican companies are solving complex problems and at the same time, multinational mayor league players are partnering with local suppliers to understand the market better. For example: Conekta, Clip, Sr. Pago, Pago Fil, or the recently mentioned, OpenPay. These companies work daily to extend payment processing services to small, medium, and big size companies; the company Bitso has evangelized Mexicans, throughout their talented team, with the graciousness of Bitcoin and Ethereum.

Companies like PayU, PayPal, or MercadoPago have adapted to the market by collaborating with local players. Gentera, one of the biggest financial institutions in Mexico, is always looking to include more people to the financial system daily through their innovation laboratory, Fiinlab. Startups like Paybook are focused on making accounting and finance easier to the members of this ecosystem. Bancomer and other banks have taken the lead by addressing trending topics and adopting new technologies. Microsoft and IBM offer avant-garde technology to push FinTechs efforts throughout Azure and Bluemix, respectively. Mifiel gets leverage out of Blockchain and the Electronic Signature FIEL (for its acronym in Spanish) to sign legal documents in a digital and simple way. Kueski, Konfio, Prestadero, and Doopla (among others) offer financial services to underserved sectors of the population. Im sure there are many others that I have not mentioned, but I believe the point is now clear.

Interesting things are happening in Mexico and it is exciting to be a part of this ecosystem that, despite the huge obstacles, is moving forward with a firm step.

And talking about obstacles, one of the biggest for this companies and its fair to say that it is the one that keeps us out of bed every morning is the identity theft and what derives from it.

The fraud losses index with credit/debit cards (transactions made with cards that were unlawfully obtained) is twice, or even thrice as big than in North America. There is a loss of approximately 4 billion dollars a year on e-commerce because of this issue.

Just like companies get born and mature, we have seen an alarming number of startups that disappear because of this issue.

Juan Llanos, expert in the financial regulation and money laundry prevention subjects, and Bitcoin/Blockchain evangelizer says:

The problem with Financial Inclusion will be solved when the identity problem gets solved.

We believe that the following trends may help to solve this problem:

1. Collaboration: There are many cases of how different entities facing the same problem have solved it by collaborating and sharing information with one another. To mention a few, theres the case of Waze, where drivers help solve traffic in a collaborative way. Another would be Greece, where after the riots and economic collapse, people started to generate a stronger community among neighbors: sharing provisions, medical knowledge, ideas, and solving problems together.

Before a fraud crisis and identity theft in Mexico and Latin-American, it is imperative to generate a more united FinTech community.

2. Mounted solutions on Blockchains immutable and decentralized registry: The benefits of a technology that allows to stablish trust between different players that dont know each other yet and that transmits value (e.g.: Bitcoin), relevant information (e.g.:, or code and concrete instructions (e.g.: Ethereum) without the need of a central entity regulating the operational part, are just being conceived.

3. Sophisticated Data Analysis: Per our better understanding of the data patterns we can take better decisions: Machine Learning algorithms, Deep Learning, Big Data, and other sophisticated data analysis have begun to be used to solve fraud issues with good results.

At Bayonet, we foresee an interesting future. There will surely be great challenges ahead, but they come with a series of phenomena and technologies that support us to achieve success as a country, but most importantly, and as humanity. We are aware of the before mentioned context and trends; and it is because of this that our efforts are aligned with them.

Our short-term goal is to drastically reduce the use of stolen cards through a collaborative platform that allows companies from different verticals to share information and protect each other.

We are pleased to announce that our data repository has exceeded the target set for 2016 and is closing in to the millions of historic data numbers. Likewise, we are excited to see how the technology we have developed can be applied to solve other type of similar problems in banking, credit grants, or the real-estate industry.

Our long-term goal is to provide the citizens with control over their personal information: that everyone can decide who to share it with, for how long, and most importantly, to what end.

We are focused in accomplishing what is known as Self-Sovereign Identity. To accomplish this goals, we will get leverage from the Bitcoin and Ethereum technologies by adopting a much more neutral position and include a bigger number of people and companies to the Trust and Protection Ecosystem. Our team has followed the development of these technologies closely the last few years and we are currently in a pilot phase to migrate identities to these immutable and safe infrastructures.

In conclusion, we would like to congratulate all the members of the local, regional, and global FinTech ecosystem for their accomplishments so far. For us at Bayonet it has been an intense year, without a doubt; weve had the opportunity to interact with some of the members of this ecosystem and participated in programs like Angel Ventures, Archetype, NXTPLabs, and MassChallenge (Gold Winners).

It is time to keep focused on strengthening our presence to raise the standard for Mexico and Latin-America.

I would like to wish a great year to everyone. May the year 2017 bring a lot more success!

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