Dominican Republic’s conventional financial institution Widespread made waves within the Caribbean when it introduced the launch of Qik, the primary neobank on the island.
With over $10 billion in belongings, the monetary group -one of the most important within the country- envisaged a must serve youthful clients with a selected digital-only establishment. This pattern is more and more frequent amongst a lot of Latin America’s largest banking establishments because the rise of digital shoppers grows. Comparable instances embody Banorte’s Bineo in Mexico or Bradesco’s Subsequent in Brazil.
Qik obtained a banking license in October, paving the way in which for the digital financial institution to increase its vary of economic providers. Grupo Widespread’s financials again the endeavor. It would make investments almost 4 billion Dominican Pesos in Qik within the subsequent 5 years, or over $70 million.
“We have now a worthwhile enterprise, and Grupo Widespread, our mum or dad firm, offers us with sturdy help,” Arturo Grullón, CEO at Qik, informed Fintech Nexus.
The Dominican Republic was set for a digital financial institution
The digital financial institution launched a Mastercard bank card first. To spice up adoption, it provides limitless 1% cashback on all purchases. Then it rolled out a digital account with a 4% annual charge return on deposits.
“The Dominican Republic was all set for its first digital financial institution,” Grullón mentioned. A excessive cell phone penetration, he mentioned, carves an untapped alternative to advertise banking digitization within the nation.
Official knowledge states that 83% of Dominicans have a smartphone and 80% have web entry, which contrasts with the truth that solely 46% of Dominicans are correctly banked, in accordance with Central Financial institution knowledge. “As we flip each smartphone right into a banking department, we’re in a super place to bridge this hole.”
Enlargement in sight
Most Caribbean fintech companies have been up to now domestically centered, though some consider there is a chance to increase to different islands. Whereas initially providing its providers to Dominicans solely, Qik is waiting for regional alternatives.
“To a higher or lesser extent, this (monetary hole) context is replicated in most international locations within the Caribbean,” says Grullón. “The expertise gained regionally shall be very important to creating an clever growth technique.”
The Caribbean area is residence to over two dozen international locations with a inhabitants of almost 45 million. Whereas the Dominican Republic is the area’s largest financial system, with a inhabitants of over 10 million and a $100 billion GDP, finally, digital-born enterprises may increase past borders.
The Caribbean fintech ecosystem
The Dominican Republic boasts the most important ecosystem within the area. In line with a examine by the Inter-American Improvement Financial institution, the island seeks to consolidate itself as a number one fintech hub within the space, with 55 reported fintech corporations as of 2021. Common development per yr has been round 130%, and it is among the fastest-growing ecosystems in Latin America. Simply 5 years in the past, the island nation reported solely two fintech corporations.
Its development is the most recent illustration of how the sector is shifting by leaps and bounds in nearly each nation within the area.
“It’s no secret that the Caribbean area has skilled vital growth in digital entrepreneurship, particularly inside the fintech framework,” mentioned Qik’s Grullón. The pandemic, he mentioned, has been a essential driver as nicely in accelerating digital banking adoption.
Increasing the portfolio
The audience of Qik is primarily digital-savvy clients. “At Qik, we attraction to a broad vary of shoppers, however all of them have in frequent being fashionable banking shoppers who’ve adopted digitalization,” mentioned Grullón.
The digital financial institution will proceed to increase its product suite, together with a debit card within the works. Quickly, Grullón mentioned, loans can even be made out there for Qik’s clients. “Credit score is the product our shoppers search probably the most,” he mentioned. “The concept is to finish the portfolio with insurance coverage and funding merchandise later.”