Juvo’s Financial Identity as a Service (FiDaaS) platform allows customers to create a credit history by analyzing alternative financial transactions. The financial profile can then be used to determine a customer’s ability to engage in services such as buying insurance or taking out loans.
Mastercard plans to take Juvo’s platform to financial institutions (FIs) across Latin America and the Caribbean. The companies said the service could potentially help open up banking services to millions of customers.
“Financial institutions across LAC face a dilemma: Consumers can’t demonstrate their creditworthiness to gain access to credit. Without access to credit, however, consumers can’t establish creditworthiness,” said Juvo Founder and CEO Steve Polsky in a statement.
“Using FiDaaS, financial institutions can rapidly and dramatically expand the addressable market for their services while minimizing risk. Banks face new competitive pressures and commodification of transactional services, and they need to unlock new addressable markets and deliver new services. We believe that establishing reliable, secure financial identities for underbanked consumers is the key to solving this problem,” Polsky added.
Juvo was a participant in Mastercard’s FinTech startup program, Start Path. Prior to participating in Start Path, the company used its platform to help customers in developing countries secure microloans through their mobile phones. The company said it has built over 270 million financial profiles and helped facilitate over one billion transactions.
Latin American regulators have also been working to create ways to bring banking services to more customers in the region. Many of the region’s consumers remain unbanked or lack access to traditional banking products, but smartphone penetration is increasing, giving many individuals the ability to make online transactions via their mobile phones.
In July, PYMNTS spoke with Paula Arregui, chief operating officer of Mercado Pago (the payments unit for Argentinian eCommerce marketplace MercadoLibre), and Joao Andre Pereira, head of the financial system regulation department for Brazilian regulator Banco Central do Brasil, to discuss how open banking is developing in Brazil and in Latin America as a whole.
The pandemic-triggered closure of brick-and-mortar banks has also fueled demand for open banking in the region. This could set the stage for wide-ranging changes to how payments occur throughout the region, especially in countries such as Brazil, where digital and mobile channel adoption has continued to expand, yet where more than 45 million consumers remain unbanked.