Fintech may be disrupting the formal financial sector, but often, it’s a collaborative process. Traditional institutions are increasingly working together with fintechs to disrupt old operations that weren’t working and build a more efficient and inclusive system. Accion partner Destacame, based in Chile and Mexico, is one of the fintechs that’s forming partnerships to drive financial inclusion. As a full-service digital platform for users to build their financial health, Destacame collaborates with more than 25 financial institutions to offer appropriate financial products to its users.
Many of these users previously lacked access to financial tools. For too long, financial service providers have disregarded large markets because they were too costly to serve and traditional methods didn’t work to assess their creditworthiness. “Because of their structure and bureaucracy, sometimes they can’t offer what people need, but this is changing. Banks are realizing the competition they have with other financial entities, and clients have more information and want to have options on financial products according to their needs,” says Nicolas Jaramillo, who co-founded Banco BCI’s MACH program focused on innovation in payments. He adds that “Destacame has the potential to become a key player or mediator in between banks and clients.”
“Destacame was one the first companies that started about four years ago and implemented this new way of doing things — approaching a segment of people that I wasn’t familiar with, the segment of individuals with no banking or credit history, poor access to credit, and poor relationships with banks,” says Nicolas. MACH partnered with Destacame to generate leads among the unbanked, and it’s been a successful partnership. “The clients that we received from them are good quality clients,” says Nicolas. In addition to sending good customers to MACH, Nicolas appreciates that Destacame helps customers manage their payments better. “Destacame can also be a mediator with clients to make sure they promptly pay their debts to the banks,” he says.
Fernando Rocchi who supervises credit risk and collections for Fashion’s Park, also emphasizes Destacame’s effectiveness at helping manage debt. Instead of traditional debt collection strategies, Fashion’s Park worked with Destacame to give borrowers a special offer to incentivize repayment. “Customers have taken this new approach really well as we are not disturbing them with calls and putting pressure on them to generate the payments, but it’s completely the opposite — we are offering them an opportunity — that I would say is an excellent opportunity — to get your record clear of debt at a discount.” It’s an approach that’s been good for Fashion’s Park and its customers. “The results have been very positive on our side. We have recovered a significant amount of capital that was essentially lost.”
Destacame’s model of working with other players in the financial system is catalyzing needed change. As Virginia Chacón, Destacame’s head of operations, puts it, “we are pushing [traditional institutions] to be more innovative and better than before. We are pushing the banks to be more humane with people and improve their service.” Destacame’s partners echo this sentiment. “This last year, I have seen how useful Destacame is as a client in the way that they are changing the financial industry in Chile,” says Nicolas from MACH. Fernando at Fashion’s Park agrees that working with Destacame will lead to a bright future. “We at Fashions Park are focusing in a market with very low banking rates and the alliance with Destacame is going to be very beneficial as it will teach customers how to maintain a healthy credit history and the benefits that will come to them from getting a positive credit record.”