Introduction to Belvo and its Mexican Operations
Belvo, a fintech specializing in open finance, has maintained its commitment to Mexico despite the stagnation of open finance regulation in the country for several years. With six years of operation, Belvo has stated that Mexico accounts for 60% of its business, while the remaining 40% comes from Brazil, where open finance has a more established regulatory framework and operates more advanced.
Open Finance’s Decline in Prominence
In a context where the number of fintech companies identifying open finance as their primary business model has decreased from 2023 to 2024, Belvo’s focus on alternative data becomes even more significant. According to a Finnosummit study, active companies in this niche are now more specialized, with robust infrastructure and greater operational capacity, enabling long-term sustainability.
Conservative Revenue Outlook
Despite the promising developments, the revenue outlook for open finance remains conservative compared to other fintech segments. This is primarily due to the lack of a secondary regulatory framework that definitively promotes open finance, despite the 2018 Fintech Law marking an initial step and experiencing some progress in discussions.
Belvo’s Recent Funding and Strategic Focus
Undeterred by the uncertain landscape, Belvo recently secured $15 million in a new funding round to strengthen its presence in Mexico. The company has honed its expertise in integrating information from the Mexican Tax Administration Service (SAT) and the Mexican Social Security Institute (IMSS), two crucial sources of alternative data. This enables financial institutions, mainly credit providers, to enhance risk assessment processes and facilitate access to financing.
Collaborations and Client Base
Belvo partners with Sofipos, Sofomes, and banks, with approximately 80% of its current clients being credit-specialized entities. The Finnosummit study highlights that open finance technology has become a cornerstone of the Mexican financial ecosystem, with nearly 60% of fintech companies in the country integrating it into their business models by 2024.
Belvo’s Future Plans
“We see the impact of open finance on the Mexican economy through the use of alternative data. Having SAT and IMSS information helps improve credit granting processes,” stated Federica Gregorini, Belvo’s General Manager in Mexico.
Key Questions and Answers
- What is Belvo and its connection to open finance? Belvo is a fintech company specializing in open finance, which aims to improve access to credit by leveraging alternative data sources.
- Why is Mexico significant for Belvo? Mexico represents 60% of Belvo’s business, making it a crucial market for the company.
- How does Belvo utilize alternative data? Belvo integrates information from the SAT and IMSS to help financial institutions assess credit risk more accurately.
- What is the current state of open finance in Mexico? Although regulation has stagnated, Belvo continues to invest in the Mexican market by focusing on alternative data.
- What does the Finnosummit study reveal about open finance in Mexico? The study indicates that active open finance companies are more specialized and have better infrastructure, while open finance technology has become a key component of the Mexican financial ecosystem.
- What are Belvo’s future plans? Belvo aims to continue growing and integrate artificial intelligence into its daily operations to generate new insights from the data it collects.
