Boston-based nonprofit Accion is looking to invest in more Latin American fintech startups to support the financial inclusion process in the region.
“Venture Lab [Accion] is continuing to explore opportunities throughout Latin America to invest in the fintech startups with the strongest potential to reach the underserved,” Amee Parbhoo, director of investments at Accion Venture Lab, told BNamericas.
Accion’s Venture Lab was launched in 2012 to provide seed capital and management support for financial inclusion startups as part of a stronger focus on fintechs.
Accion has for decades been supporting financial inclusion in Latin America and globally through investments in a large number of microfinance providers.
Speaking about the regional strategy, Parbhoo said post-investment advisory services on strategic and operating issues will continue to be an important way for Accion to support its Latin American fintech partners.
The human touch
Accion released a report in October in which it argues that fintechs that are focused on improving financial inclusion should apply a human touch at some stage of the customer experience.
The report recognizes that financial technology can play a huge role in accelerating financial inclusion, but warns that an approach with 100% technology and no human interaction runs a high risk of failure.
“Too often, fintechs build technology for technology’s sake, without considering the needs and preferences of their customers,” said Parbhoo. “By determining how best to incorporate human touch at key points in the customer journey, startups can better acquire and retain customers, reduce expenses, increase profitability, and increase financial inclusion.”
The main reasons why a human touch is often necessary include poor people’s lack of familiarity with digital technologies, low financial education, lack of trust in financial services providers, and limited awareness of startup brands, according to the report.
The report includes eight fintech “tech and touch” case studies from around the world of which two are Latin American: working capital-focused Tienda Pago in Mexico and Peru, and savings-for-education firm Escala in Colombia.